NFTI — Trade the Scalara NFT Index
Through Slingshot you can now invest in top NFT collections for a fraction of the cost of buying a top NFT. This is made possible by the Scalara NFT Index (NFTI), a single token, available on Polygon and Arbitrum, that offers diversified blue-chip NFT exposure.
How you used to trade NFTs
Imagine the hypothetical scenario that your research tells you that top NFT collections will become more valuable over the short or medium term. You want to capitalize on that view and after looking at available products you decide to invest in CryptoPunks, Doodles and Cool Cats to somewhat reduce the specific risk of your position.
The cheapest way to get exposure to these is to buy on one of the NFT marketplaces and you end up buying three floor NFTs:
A week later you decide to close your position. So you list your NFTs and wait until other market participants buy them. In order to quickly close out the positions you list at or slightly below the respective floor prices.
In summary, in order to bet on this view and earn about 4.6% after fees:
- $275,000 of capital was necessary
- $600 of gas had to be paid
Can you do better?
Are there better alternatives to capitalize on the same hypothetical view? With the launch of the NFTI token you can now invest in blue-chip NFTs directly through your Slingshot dashboard alongside your other trades. In contrast to the above scenario, NFTI allows you to:
- Get diversified exposure: NFTI currently provides exposure to 7 top NFT collections
- Only buy a single token: NFTI is a single ERC-20 token
- Trade NFTI at low cost: NFTI is listed on the aggregator platform Slingshot and therefore can be traded for fractions of a dollar on Polygon or Arbitrum
- No minimum investment requirement: NFTI fractionalizes high-value NFTs, making them accessible to everyone
Comparing how trading NFTI through Slingshot, with these features, performs in the above hypothetical scenario shows the main advantages:
- Positions as small as desired are possible
- Gas cost are negligible
- Returns may be as good or better since marketplace fees are not explicitly included
- DEX fees and NFTI’s annual streaming fee (1.95%) are significantly lower than NFT marketplace fees
What exactly is NFTI?
NFTI is a token tracking the Scalara NFT Index that is implemented using the newly launched Kuiper asset management protocol. Scalara is the index provider behind DPI, the DeFi Pulse Index.
The index is designed to track the performance of some of the most well-known and highly-valued NFT collections by utilizing NFTX tokens. The Scalara NFT Index furthermore adds yield on top of token price performance through inventory staking on the NFTX platform.
Constituents are weighted by the floor market capitalization of the collection and reviewed on a quarterly basis.
Currently the index is composed of the following collections:
Where to buy (and sell)
NFTI is available for trading through aggregator Slingshot leveraging low transaction fees:
[Edit April 7 2022] NFTI is also available on Ethereum’s Mainnet:
Risks
Keep in mind that NFTs are risky assets and past performance is no indicator of future performance. In addition, it is always advised to do your own research regarding any protocol that you use.
