Sales of non-fungible tokens, while slightly below record levels last year, are still astronomical. At the same time, since the hype appeared in the spring of 2021, according to Google Trends, many people around the world are still interested in NFT (the following graphic is only related to the German-speaking market):
However, since it is currently very difficult to estimate the value of a single NFT, many investors are looking for ways to invest in the NFT sector with as little risk as possible. But what are the options for investors to invest on a large scale in the burgeoning NFT industry?
NFTX is a platform where users can generate ERC-20 tokens backed by NFTs. This makes it possible to create pointers consisting of non-replaceable tokens. For example, one can create indices made up of holdings from CryptoKitties, CryptoPunks, Bored Apes, or other popular NFT holdings.
But this is not the only way to diversify investing in the NFT market. Similar to the DeFi Pulse Index (DPI) of the “ETF Token”, there is also a “NFT Token ETF” that summarizes and plots different projects from the NFT sector into a single token. This allows investors to invest in multiple NFT projects by purchasing just one token.
Below, therefore, are two index funds from NFTX and a “NFT ETF Token” from Index Cooperative.
1. NFTX: CryptoPunks (PUNK) Index Fund
CryptoPunks are 10,000 uniquely generated characters created by Larva Labs, each of which only exists once on the blockchain. None of the CryptoPunks are the same and all of them can only be officially owned by a single wallet on the Ethereum blockchain. Auction prices over $700,000 for each of the individual NFTs in the series are not uncommon.
The most diversified option for investing in CryptoPunks holdings is the Punk Basic Index Token (PUNK-BASIC). The index token consists of different types of CryptoPunks and the price of PUNK-BASIC is based on the average of all CryptoPunk NFTs stored in the index. At the moment, you can either generate PUNK-BASIC yourself by depositing the corresponding NFTs, or buy the token on SushiSwap.
2. NFTX: Hashmasks Index Fund (MASK)
Hashmasks artwork consists of 16,384 unique digital images created by more than 70 artists from all over the world. Each mask has distinctive characteristics, the most important of which are skin tone, character, mask and eye color.
Additionally, each NFT hashmask owner has the option to name their own hash mask. This name becomes visible to everyone on the Ethereum blockchain. In March of last year, one of these NFT artworks was sold for 420 Ethereum, which is approximately $1.28 million at press time.
The NFTX Hashmasks (MASK) indicator is based on the same principle as the PUNK BASIC token. By depositing hash masks on NFTX, you receive the MASK ticker box token in return. This reflects the average price of all the retail masks stored and can either be created by yourself or purchased on SushiSwap.
In general, there are many different NFT index funds on the NFTX platform, which can be viewed in more detail on the NFTX official website.
3. Indexcoop: Index Fund for NFT Crypto Ventures (MVI)
Index Cooperative is a community-led coding project focused on creating different cryptographic indexes. The most popular index of the project is the DeFi token DPI, which summarizes and maps the 10 largest DeFi tokens in a single index. Each DPI token is backed by different DeFi tokens for the index.
Last year, the Index Cooperative Community proposed a new “ETF token” that was launched in April 2021. The “Metaverse Index” (MVI) token refers to the emerging metaverse sector. Many Metaverse fans We believe that much of the future of entertainment, sports and business will turn into a virtual environment.
The Index Cooperative’s Metaverse Index (MVI) offers investors an opportunity to invest in a virtual, decentralized future. MVI consists of the following tokens:
Within the MVI token are many of the most popular tokens in the NFT sector, such as Decentraland (MANA), Enjin (ENJ), Rarible (RARI), and Sandbox (SAND).
Not giving an opinion
This post was previously published in March 2021. Revised and modified accordingly for republishing.
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