The Fungify NFT Index: The Cheapest Way to Get NFT Exposure—Ever

We’ve just launched the Fungify NFT Index, and it’s unlike anything that’s been done before. This is the S&P 500 for NFTs, consolidating the six biggest collections into one simple token. With over $300,000 in concentrated liquidity, you can now get exposure to the top NFT collections without the hassle of managing individual assets.

Our approach is simple but powerful: liquidity is pooled into a single vault, maximizing capital efficiency and avoiding the fragmentation of multi-vault systems. By restricting deposits and redemptions to a whitelist of designated market makers, we ensure the index remains balanced and steers clear of accumulating any blacklisted NFTs.

Here’s how it works:

1. Buying Fungify NFT Index Tokens

Getting your hands on Fungify NFT Index Tokens is fast and simple:

• Head to the Buy & Sell page and use the CowSwap widget to swap ETH for Fungify NFT Index Tokens.

  

  That’s it—you’re instantly invested in the top NFT collections.

2. Trade NFTs for Fungify Tokens (Creation Mechanism)

Just like ETFs allow for the creation of new shares, whitelisted users can “create” new Fungify NFT Index Tokens by depositing NFTs. This creation process, analogous to traditional ETFs, enables the exchange of individual NFTs for index tokens, allowing for immediate portfolio diversification.

• Go to the Deposit page and enter the amount of NFTs you want to deposit. You can also manually select which NFTs you want or let the protocol randomly choose for you.

If you’re balancing the index, you might even earn a bonus, similar to how ETF creators can benefit from maintaining liquidity and balance.

3. Redeem NFTs from the Index (Redemption Mechanism)

Whitelisted users who need to redeem NFTs from the index can exchange Fungify NFT Index Tokens for NFTs held within the index. This process mirrors ETF redemptions, where shares are exchanged for underlying assets.

• Go to the Redeem page, enter the number of NFTs you want, and the protocol will return random NFTs and any change due.

You’ll see which NFT you received once the transaction is complete.

4. Earn by Staking Your Tokens

For those seeking passive income, staking Fungify NFT Index Tokens provides a share of protocol fees from deposits and redemptions.

• Head to the Earn page, enter how many tokens you want to stake, and you’ll start earning a share of fees from deposits and redemptions in the protocol.

You can unstake at any point as needed.

Looking Forward

The Index is live! You can access it now: https://app.fungify.it/

The next step for the index is to bring this capability to users beyond the Ethereum ecosystem, by bridging over to other chains and establishing liquidity pools to facilitate the long tail of NFT buyers.

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