Fungify Raises $6M to Build New NFT Lending Primitive
Using Chainlink’s NFT floor price streams, Fungify offers instant NFT sales, NFT collateral and a yield-bearing NFT index.
Fungify DAO has announced the completion of the funding round.
The round, led by CitizenX, also included Distributed Global, Infinity Ventures Crypto, Taureon Capital, Anagram, Flow Ventures and more. Angel investors consisting of DCFGod, Joe Eagan (ex-president of Polychain Capital), Mark Borsten (Merit Circle founder) and others also joined.
Fungify allows users to invest in $NFT, the first decentralized $NFT index token. $NFT is a non-fungible token (NFT) index backed by and redeemable for NFTs found in Fungify MarketVault. This enables anyone, regardless of investment level, to be exposed to a broad set of community-curated NFTs without concern about the illiquidity of an individual NFT.
The NFT Index Token is also used as a unit of account for loans, allowing the protocol to account for broader market volatility. This increases the readability of the system and enables risk parameters to be agnostic to US dollar denominated movements in the NFT market. Using Chain link NFT floor prices feeds to track the price and the NFT index as a guaranteed counterparty, Fungify can margin call without auctions.
“Having an NFT index at the heart of the system was the key insight,” says 0xMob100, the founder of Fungify, who added:
“Nobody wants a stablecoin or ether derivative (ETH) backed by monkey jpegs. They want exposure to the monkey jpegs themselves. And they want it without needing tens of thousands of dollars. That’s the demand for fractional exposure that can really scale not only the protocol, but the entire ecosystem.”
The index token also provides investment returns from interest and sales, making it strictly better than trying to achieve the same exposure. Also, the index automatically rebalances while maintaining its value relative to the broader NFT market via arbitrage.
Hanzo, a protocol engineer at Fungify, explains a draw of the redemption mechanism for users:
“It’s actually a fun element of the redemption mechanism because you can redeem the index token for a random NFT, and if it helps stabilize the link, that redemption will have a positive expected value.”
According to 0xMob100, Fungify plans to launch in Q1 or Q2 of 2023 after the conclusion of security audits.
Useful links:
Website: https://fungify.it
Twitter: https://twitter.com/fungifynft
Discord: https://discord.gg/fungifynft
Blog: https://blog.fungify.it
YouTube: https://www.youtube.com/@Fungify
Documents: https://docs.fungify.it
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