KuCoin crypto exchange debuts USDT-dominated NFT ETF

by · July 29, 2022

Seychelles-headquartered cryptocurrency exchange KuCoin has launched an exchange-traded fund (ETF) linked to major nonfungible token (NFT) assets such as Bored Ape Yacht Club (BAYC).

KuCoin’s NFT ETF Trading Zone went live on Friday, the firm announced. The new investment product is launched in collaboration with the NFT infrastructure provider Fracton Protocol.

The KuCoin NFT ETF is a Tether (USDT)-dominated product that marks special underlying NFT assets such as Bored Ape Yacht Club. BYAC is one of five NFT ETFs that KuCoin is launching. Traded under the symbol hiBAYC, the asset is an ERC-20 token representing 1/1,000,000 ownership of the target BAYC in the BAYC meta-exchange of the Fracton Protocol.

The ETF aims to increase liquidity as it enables exposure to NFTs via the USDT stablecoin instead of Ether (ETH). It also eliminates the risks and concerns of managing NFT infrastructure elements such as wallets, smart contracts and marketplaces such as OpenSea.

In addition to hiBAYC, the investment covers CryptoPunks (hiPUNKS), Koda NFTs (hiKODA), hiSAND33 and hiENS4. Starting with hiBAYC on Friday, the investment product is scheduled to list hiPUNKS on August 4. Listings for hiKODA, hiSAND33 and hiENS4 will be announced at a later date, the exchange said.

The ETF marks an important milestone in KuCoin’s efforts to accelerate the establishment of the NFT market by lowering the investment threshold of leading digital collectibles.

The exchange has been focused on developing the NFT sector, launching the interactive NFT launch platform Wonderland in April 2022. KuCoin also rolled out Windvane, another NFT marketplace that offers an NFT launch platform, coin trading, administration and other services.

“KuCoin will continue to provide user-friendly products for investors, allowing them to easily participate in NFT investments,” said KuCoin CEO Johnny Lyu. According to Lyu, KuCoin is the first centralized crypto exchange that supports NFT ETFs allowing users to invest and trade top NFT directly with USDT.

Related: US federal agency issues legal advice on NFT investments

However, KuCoin is not the first to explore NFT ETFs. In December 2021, registered investment advisor and fintech firm Defiance launched the world’s first NFT-focused ETF on the New York Stock Exchange Arca. The ETF tracks an index of companies operating or planning to operate in the NFT and Metaverse sectors.