In this blogpost we will run through the new Axie Infinity NFT index funds which were recently released by the NFTX DAO. We’ll take a look at the project these NFTs originate from, look into each individual fund and round up with a list of contract addresses and links to other resources.
NFTX is a platform for making ERC20 tokens that are backed by NFTs. These tokens are called funds, and (like all ERC20s) they are fungible and composable. With NFTX, it is possible to create and trade funds based on your favorite NFTs such as CryptoPunks, Axies, CryptoKitties, and Avastars, right from a decentralized exchange.
Let’s get started!
What is Axie Infinity?
Axie Infinity is a virtual world full of fierce, adorable pets called Axies. Axies can be battled, collected, and even used to earn ERC 20 tokens. The ecosystem is built by the team at Sky Mavis on Ethereum, with parts of the game running on Ronin, Sky Mavis’ inhouse developed Ethereum Sidechain.
The ingame creatures, Axies, vary in rarity through body parts, which you can read all about here. The Axie NFTs are based on the ERC721 standard and therefore compatible with NFTX Index Funds.
The Axie Fund Explained
With this launch, we have bootstrapped 1 Axie Infinity NFT fund.
Below we will go over each individual fund and see how they are different from each other.
Axie-Origin is a single fund token, which is 1:1 backed by Axie NFTs that originate from the Origin series.
Type: Single Fund
Portfolio Balance: 1:1 backed by NFT
Contract Address: 0x5b9F63F256FAC333bC2Bc73c7867BA4865a49729
Fund on NFTX.org: https://nftx.org/#/fund/4
How to become a liquidity provider for Axie Infinity fund
Want to become a liquidity provider for the Axie Index fund but don’t know where to start? Here’s how you can:
To get started, the first thing you will have to do is supply one (or multiple) Axie NFTs to the index fund listed above. You can skip this step if you’ve bought single fund tokens from an exchange.
If you haven’t and want to use your own NFT as collateral, follow through with the tutorial below. Be aware that supplying your NFT as collateral mixes them with all other similar NFTs in that fund, making it a possibility that you will not be able to redeem the exact NFT when you redeem your fund token later. This is caused by the randomness associated with redeeming an NFT out of a fund.
Note: Axies, as opposed to Cryptopunks shown in the tutorial below, do not have to be wrapped before being used to mint a fund token.
How to add liquidity on an exchange?
After successfully going through minting your index fund tokens by following the tutorial above, you will be ready to become a liquidity provider on an AMM (Automated Market Maker) such as SushiSwap.
The process of becoming a liquidity provider is fairly simple. It requires you to provide your fund token, in combination with a second currency, to the liquidity pool of an exchange. As NFTX pairs are favored by the DAO, we take $NFTX as an example.
Taking SushiSwap as an example, you can provide liquidity by going to the Sushiswap Pair page and click on the +liquidity button on the right side of the page.
Redeeming Axies from the index funds
When you want to take the opposite route, and take NFTs out of one of the index funds, you can do so by redeeming your fund token on NFTX.org.
Watch the video tutorial below where ChopChop walks you through the entire process.
That’s it for today!