What is NFT Index (NFTI) | What is NFT Index token | What is NFTI token
About NFT Index
The NFT Index is a digital asset index designed to track tokens’ performance within the NFT industry. The index is weighted based on the value of each token’s circulating supply. The NFT Index aims to track NFT projects in Decentralized Finance that show a commitment to ongoing maintenance and development.
The NFT Index is a capitalization-weighted index that tracks the performance of decentralized financial assets across the market.
No Impermanent Loss
Uses market capitalization for component weights, not fixed percent, so it does not suffer underpeformance from impermanent loss.
Cheap & Efficient
Eliminating the need to perform countless costly transactions manually saves you time and money.
Diversified Portfolio
Always less volatile than more concentrated portfolios. Downside protection due to holding a wider selection of tokens.
NFT Index Construction
Initial Index Conditions:
Index includes 8 tokens: Polygon (Matic), Enjin, Decetraland, Sand, Axie Infinity, Aavegotchi, Rarible and Meme. The price per token and circulating supply were taken on February 3rd, 2021 from CoinGecko. The price per token multiplied by the circulating supply determines the circulating market cap. Each position is weighted by its relative circulating market cap to other positions in the index.
Objective
The NFT Index is a digital asset index designed to track tokens’ performance within the Decentralized Finance industry. The index is weighted based on the value of each token’s circulating supply. The NFT Index aims to track projects in Decentralized Finance that have significant usage and show a commitment to ongoing maintenance and development.
Token Inclusion Criteria
As part of the inclusion assessment, NFT Index considers a wide range of characteristics of the token, the project and the protocol. These criteria can be placed in four groups:
Token’s Descriptive Characteristics
- The token must be available on the Ethereum blockchain.
- The token must be associated with a decentralized finance protocol.
- The token must not be considered a security by the corresponding authorities across different jurisdictions.
- The token must be a bearer instrument. None of the following will be included in the index:
- Wrapped tokens.
- Tokenized derivatives.
- Synthetic assets.
- Tokens that are tied to physical assets.
- Tokens that represent claims on other tokens.
Token’s Supply Characteristics
- It must be possible to reasonably predict the token’s supply over the next five years.
- At least 7.5% of the five year supply must be currently circulating.
- Token must have reasonable and consistent NFT liquidity on Ethereum.
- The token’s economics must not have enormous locking, minting or other patterns that would significantly disadvantage passive holders.
Project’s Traction Characteristics
- The project must be widely considered to be building a useful protocol or product.
- Projects focused on competitive trading/holding, having Ponzi characteristics, or projects that exist primarily for entertainment, will not be included.
- The project’s protocol must have significant usage.
- The protocol or product must have been launched at least 180 days before being able to qualify to be included in the index.
- The protocol or project must not be insolvent.
Protocol’s User Safety Characteristics
- Security professionals must have reviewed the protocol to determine that security best practices have been followed to maintain user assets safe under different circumstances.
- Alternatively, the protocol must have been operating long enough to create a consensus about its safety in the decentralized finance community.
- In the event of a safety incident, the team must have responded promptly and addressed the incident responsibly in the aftermath, providing users of the protocol with a reliable solution and the decentralized finance community with adequate documentation to provide transparency about the incident.
- The selected tokens must have sufficient liquidity across a variety of trading platforms.
Index Calculation
The total circulation supply of all tokens included in the index is taken as 100%. The NFT Index value corresponds to the sum, the terms of which are the market value of tokens multiplied by the circulating supply of these tokens divided by the Index Divisor.
- Circulating Supply is the number of tokens circulating the last time circulating supply was determined. The first circulating supply was determined on February 03, 2021, using Pro-blockchain.com as a reference source.
- Price is the market price of the token in USD. Index Divisor is a constant that is adjusted on each rebalance. As of February 03, 2021, the Divisor was 9314020.
- The method of calculating the index has the same principle as the method of calculating the S&P500.
- The maximum number of the assets is up to 10.
Index Maintenance
The index is maintained monthly in two phases:
Determination Phase
The determination phase takes place during the third week of the month. It is the phase when the changes needed for the next reconstitution are determined.
- Additions and deletions: The tokens being added and deleted from the index calculation are determined during the third week of the month and published before monthly reconstitution.
- Circulating Supply Determination: The NFT Index currently references CoinGecko’s circulating supply number. The Circulating Supply is determined during the third week of the month and published before the monthly reconstitution.
Reconstitution Phase
Following publication of the determination phase outcome, the index composition will change to the new weights on the first working day of the following month. I.e components will be added or removed, and weights adjusted.
Any funds based on the NFT Index will be expected to execute any buy and sell transactions on or shortly after the index reconstitution date.
How and Where to Buy NFT Index (NFTI)?
NFTI has been listed on a number of crypto exchanges, unlike other main cryptocurrencies, it cannot be directly purchased with fiats money. However, You can still easily buy this coin by first buying Bitcoin, ETH, USDT from any large exchanges and then transfer to the exchange that offers to trade this coin, in this guide article we will walk you through in detail the steps to buy NFTI
You will have to first buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT)…
We will use Binance Exchange here as it is one of the largest crypto exchanges that accept fiat deposits.
Binance is a popular cryptocurrency exchange which was started in China but then moved their headquarters to the crypto-friendly Island of Malta in the EU. Binance is popular for its crypto to crypto exchange services. Binance exploded onto the scene in the mania of 2017 and has since gone on to become the top crypto exchange in the world.
Once you finished the KYC process. You will be asked to add a payment method. Here you can either choose to provide a credit/debit card or use a bank transfer, and buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT)
Step by Step Guide : What is Binance | How to Create an account on Binance (Updated 2021)
Next step - Transfer your cryptos to an Altcoin Exchange
Since NFTI is an altcoin we need to transfer our coins to an exchange that NFTI can be traded. Below is a list of exchanges that offers to trade NFTI in various market pairs, head to their websites and register for an account.
Once finished you will then need to make a BTC/ETH/USDT deposit to the exchange from Binance depending on the available market pairs. After the deposit is confirmed you may then purchase NFTI from the exchange.
Exchange: Uniswap (V2) and 1inch Exchange
Apart from the exchange(s) above, there are a few popular crypto exchanges where they have decent daily trading volumes and a huge user base. This will ensure you will be able to sell your coins at any time and the fees will usually be lower. It is suggested that you also register on these exchanges since once NFTI gets listed there it will attract a large amount of trading volumes from the users there, that means you will be having some great trading opportunities!
Top exchanges for token-coin trading. Follow instructions and make unlimited money
☞ https://www.binance.com
☞ https://www.bittrex.com
☞ https://www.poloniex.com
☞ https://www.bitfinex.com
☞ https://www.huobi.com
☞ https://www.mxc.ai
☞ https://www.probit.com
☞ https://www.gate.io
☞ https://www.coinbase.com
Find more information NFTI
☞ Website ☞ Website 2 ☞ Explorer ☞ Explorer 2 ☞ Social Channel ☞ Social Channel 2 ☞ Coinmarketcap
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