NFT Index Investing Has New Entrant With JPEGz Tokenized Basket

Ethereum-based protocol Cryptex Finance is launching JPEGz, an NFT market capitalization index token that will track ten different NFT collections. The token will be powered by Chainlink and Coinbase Cloud on Ethereum layer-2 solution Arbitrum.

JPEGz comprises 10 popular NFT projects: Azuki Official, Bored Ape Yacht Club, CloneX, Cool Cats, CrypToads, CryptoPunks, Doodles, Mutant Ape Yacht Club, Vee Friends and World of Women.

“For the first time, users can mint price exposure to track 10 popular NFT collections using ETH or DAI without the need to hold the underlying NFTs themselves,” Joe Sticco, co-founder of Cryptex Finance, said in a statement.

Over the past 30 days, the prices of popular NFTs have mostly been trending downward, with a few outliers.

Bored Ape Yacht Club has seen its price drop by about 4%, CryptoPunks has seen a 4.2% fall, and Cool Cats and CloneX have depreciated by 21.5% and 12.7%, respectively. On the other hand, the price of Azuki has increased by 16.4%, according to information from NFT Price Floor.

Index tokens, such as the one to be launched by Cryptex, diversify risks for investors by exposing them to a broader market of cryptoassets rather than one single asset. In this case, even if the price of one NFT collection drops, others may still remain profitable. This token type can be compared to an index fund in traditional finance.

Investors interested in NFTs but unwilling to take the risk of picking one over another can purchase fractional interest via JPEGz in any investment amount, or as a vehicle for dollar-cost averaging.

“Arbitrum’s collaborative NFT community has been growing rapidly, and now thanks to JPEGz, traders will have access to an indexing fund that directly tracks top NFT projects, allowing investors of all levels to have [a] stake in the largest NFTs projects globally,” Offchain Labs’ Chief Marketing Officer Andrew Saunders said in a press release.

The JPEGz token can be minted worldwide starting today on the Cryptex Finance dapp on Aributrum and can be swapped on Uniswap and Slingshot DEXes. The token will have a 1.5% minting and 1.5% burn fee — which will be applied to all transactions to fund Cryptex Finance DAO activities.

Because JPEGz is a synthetic index token, you can mint any amount of JPEGz in proportion to the collateral deposited, Sticco told Blockworks.

“Minting a fractional amount of tokens would have been difficult if JPEGz was a basket of tokens, but that’s not the case because JPEGz is a synthetic asset,” he said. “The same goes for burning. You can burn as many tokens as you like.”

“We are excited to see how JPEGz plans to accelerate with Arbitrum and drive scale over the coming months,” Saunders said.

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