Daily Briefings, Exclusive Interviews, and Weekly Recaps.

Delivered straight to your inbox.

NFTX Launches NFT Liquidity Pools

For all the optimism about the potential for NFTs – or non-fungible tokens – to revolutionize digital collectibles, one important drawback has been hanging over the sector; lack of liquidity. 

NFTX is seeking to address the issue by debuting an NFT liquidity pool.

“NFTX is a platform for making ERC20 tokens that are backed by NFT collectibles,” states the release post. These ERC20 tokens makeup specific ‘funds’ or different subsets of NFTs aggregated together to form fungible liquidity pools.

While NFTs have become a hot topic, buyers are only able to trade individual assets one at a time, meaning secondary market transactions are rare for high value collectibles like CryptoPunks, currently valued at a minimum of 5 ETH a piece. With NFTX, collectors can pool their NFTs to create funds, offering an easy way to trade in and out of specific NFT types using Uniswap or Balancer. 

“Our hope is that by creating fungible versions of popular NFT collections, it will be possible to supercharge NFT markets with better liquidity and accessibility.” founder Alex Gausman told The Defiant “There are a number of other benefits to fungibility as well such as (1) real-time price feeds, (2) the ability to use NFTs as collateral, and (3) the ability to short NFTs and go leverage long.”

Community Liquidity Sale

To kickstart the project, NFTX allowed collectors to deposit NFTs in exchange for NFTX governance tokens. This came with three ETH tranches, allowing early supporters to purchase and earn tokens in a fully open model. Every last token offered in the first round of bounties was claimed, with the first PUNK liquidity pool now live.

“Although some collectors may end up nostalgic about the days before NFTs had price-feeds and AMM pools, I think that the advent of NFT index funds has the potential to spark a new era for NFTs, imbued with the powers of DeFi and fungibility.” stated Gausman.

Tying NFTs with ERC20 tokens and liquidity pools should make it easier to bridge digital collectibles with decentralized finance so they can better leverage the space’s composability. 

✊ Head to THEDEFIANT.IO for more DeFi news 📰

DeFi News delivered straight to your inbox.

  • Daily News Briefings
  • Exclusive Interviews
  • Sunday Weekly Recap

The only DeFi news platform producing unbiased, objective journalism.