NFTX Ushers in Next Evolution of NFT Ecosystem
Did you think the non-fungible tokens (NFT) boom had peaked? Think again. Each day we seem to find another industry adopting and creating new products, platforms, and protocols in this vast medium. The newest protocol is that of NFTX which is focused on creating liquid secondary markets for illiquid NFTs by fractionalizing them.
Launched in January 2021, NFTX was created to back (or peg) NFT collectibles to a token, the ERC20. The tokens (also referred to as ‘funds’) are fungible and compostable, making it possible for users to create and trade funds based on their favorite collectibles. This was introduced in order to solve two major issues with NFTs: they are not easily transferable, and their exact value is difficult to determine.
NFTX markets boast even more transparency than traditional NFT markets as they improve the process of price discovery, thus working to increase an NFT’s status as a store of value. Another major perk to NFTXs is that they allow you to instantly sell any NFT by minting it as an ERC20 and then swapping it via Sushiswap, ultimately creating more liquidity for NFT investors.
Content creators spanning digital artists, musicians, and sports stars will be able to earn protocol fees and create instant liquidity for the content they generate.
Judging by the fact that NFT markets have managed to generate over $2.5 billion during the first half of 2021, NFTXs market will open up opportunities for broad investment in NFTs without requiring a “one at a time” purchasing associated with traditional collectible markets.