The NFT Index is a digital asset index designed to track tokens' performance within the NFT industry. The index is weighted based on each token's circulating supply and liquidity value. The NFT Index aims to track NFT projects in Decentralized Finance that are committed to ongoing maintenance and development.
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:
The NFTI uses a combination of root market cap and liquidity weighting to arrive at the final index weights. We believe that liquidity is an important consideration in this space and should be considered when determining portfolio allocation.
TW = 70% * RMCW + 30% * LW where,
TW – token weight in the NFTI
RMCW – square root of market-cap-weighted allocation
LW – liquidity weighted allocation
The circulating supply is the number of tokens in circulation from when the circulating supply was last determined, multiplied by the price. Price is the market price of the token in USD. The first circulating proposal was defined on February 3rd, 2021, using Pro Blockchain as the source.
The number of assets is 10 TokenSets
1. Additions and deletions: The tokens being added and deleted from the index calculation are determined during the month's third week and published before the monthly reconstitution.
2. Circulating Supply Determination: The NFT Index currently references the Pro Blockchain circulating supply number. The Circulating Supply is determined during the month's third week and published before the monthly reconstitution.
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 during the first week of the following month.
Any client can issue new NFTI tokens using the DeFi TokenSets protocol. To do this, he needs to initially have tokens that are included in the index and deposit them into a smart contract to receive NFTI.
This allows lowering the difference between the fair value of the NFTI token and its value on DEX platforms.
Any NFTI token holder can use the decentralized TokenSets protocol to receive the tokens included in the index in exchange for the NFTI token.