✨ NFT Fractions and Index Funds
Hello Defiers! Here’s what we’re covering today,
NFT investing with fractionalized tokens and index funds
Coinbase’s massive results will make crypto hard to ignore
Emoji-based username project Yat take a crack at universal identity
Kyber launches Dynamic Market Maker
and more :)
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TLDR Investing in individual non-fungible tokens or NFTs is a problematic task. The NFTs that seem likely to do well as investments are selling for astonishing sums pricing out both newcomers and established collectors. For those seeking exposure to high-flying NFTs, fractionalization may well be the answer.
NFT FRACTIONS NFT fractions, also known as shards, are created by issuing an ERC-20 token that represents the underlying asset, whether that asset is a single NFT or a basket of NFTs. ERC-20 tokens allow for the creation of what are essentially derivatives of the underlying asset.
NIFTEX AND NFTX The two most well-known NFT fractionalization services, NIFTEX and NFTX, also represent the two main categories. NIFTEX is a service for investing in NFT fractions while NFTX is an NFT index fund.
NFT20 NFT20 is a decentralized protocol for creating and fractionalizing pools of NFTs rather than individual NFTs. It allows participants to deposit NFTs into available pools and immediately receive ERC-20 tokens.
FRACTION Fraction is a new entrant to the space focused on fractionalizing individual NFTs. Initial sales of ERC-20 tokens will occur on the Fraction platform after which the tokens will be available via the DAOfi DEX.
And there’s more…
TLDR Coinbase, the largest US-based cryptocurrency trading venue, has opened up the books highlighting just how powerful this crypto behemoth has become.
There are more Coinbase users now than there ever will be Bitcoin mined. Over 10% of the entire crypto market rests in its balance sheet. And it is raking in billions, with revenue more than doubling from the last quarter.
BY THE NUMBERS
56M verified users, up 30% from 43M verified users at the end of Q4
$223B in total crypto assets, up 148% from $90B from Q4 and representing over 11% of the entire crypto market share
$1.8B in total revenue, up over 200% from $585M last quarter, and surpassing its entire 2020 annual revenue of $1.3B.
Other relevant Q1 metrics include: $335B in trading volume and net income somewhere between $730 to $800M.
HARD TO IGNORE While some traditional investors continue to decry crypto as a scam and are outraged over its rumored $100B valuation, it will likely be hard for the larger mainstream market to ignore Coinbase’s massive Q1.
SCENARIOS If the overall crypto market cap increases, Coinbase predicts that their average 2021 MTUs could increase to 7M. If the market stays flat, MTUs could decline from 2021 highs to 5.5M. And if the market crashes with low volatility thereafter, MTUs might decrease to similar levels as Q4 2020.
TLDR Kyber Network, a decentralized exchange, launched a dynamic market maker (DMM), which the project says will optimize fees for liquidity providers (LPs).
DYNAMIC FEES The first difference from automated market makers (AMM) is that while the 0.03% which Uniswap LPs receive is fixed, Kyber has introduced “dynamic fees” which increase during times of high volatility, capturing increased demand for trading, and decrease during periods of low volatility, thus encouraging traders to take advantage of cheaper trade opportunities.
PROGRAMMABLE PRICING CURVE The second feature is what the project calls the “programmable pricing curve” which allows liquidity pool creators to customize their pool’s pricing curve based on the nature of the two assets’ relationship.
TLDR Yat, a project building internet identities, ran its first auction last week, selling 18 “yats,” or strings of emojis which can be used in URLs or as payment addresses. Its highest selling item, the key emoji sold for $425K according to the auction’s website.
BIGGER VISION Yat is aiming to create a “new censorship resistant internet identity system that enables everyone to use a personalized string of emojis as their universal username,” the product’s introduction video says. A primary use case of yats is as addresses for crypto payments and wallets like BRD and Cake Wallet already planning to use the emoji strings as replacements for crypto addresses.
"We believe that for crypto to scale from the tens of millions+ of people currently in our ecosystem to the 4.6BN+ internet-connected people on earth, we have to meet users where they are,” Yat cofounder Naveen Jain told The Defiant. The project is focusing on UX as its value proposition, something Jain believes is often overlooked in the crypto space.
$200K FOR 🚀🌕 Other highlights of the sale, which, excluding the key was limited to two-character yats, included a lamb and a bikini (in an attempt to emoji-fy the word Lamborghini), which went for $60K and the crypto-friendly rocket and moon combination, which sold for $200K.
“Sharding is the future of Ethereum scalability, and it will be key to helping the ecosystem support many thousands of transactions per second and allowing large portions of the world to regularly use the platform at an affordable cost. However, it is also one of the more misunderstood concepts in the Ethereum ecosystem and in blockchain ecosystems more broadly. It refers to a very specific set of ideas with very specific properties, but it often gets conflated with techniques that have very different and often much weaker security properties. The purpose of this post will be to explain exactly what specific properties sharding provides, how it differs from other technologies that are not sharding, and what sacrifices a sharded system has to make to achieve these properties.”
“SushiSwap and UMA have joined forces to build a xSUSHI call option token with a $25 strike price and expiry of May 31, 2021. Over $1mm of these tokens have been minted and pooled with $xSUSHI on SushiSwap. They join existing UMA call option tokens that are already live. These call option tokens can be minted using MySynths.finance, a community created dApp that won UMA’s recent bounty.”
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