KuCoin Launches NFT ETF Trading Zone to Make Blue-Chip NFTs More Accessible

Quick take:

• KuCoin has launched the first ever NFT ETF by a centralized exchange.
• The leading crypto exchange platform targets blue-chip investments with its new product.
• The NFT ETF Trading Zone will help improve the liquidity of NFT assets, and also make blue-chip NFTs more accessible.

KuCoin has launched the first ever NFT ETF by a centralized exchange. On July 29, the leading crypto exchange platform debuted the NFT ETF Trading Zone, a product designed to improve the liquidity of NFT assets. But more importantly, KuCoin believes that the product will lower the investment threshold for blue-chip NFTs, thereby expanding the addressable market to over 20 million users.

Blue-chip NFTs are among the rarest NFTs in leading NFT collections. Yuga Labs’ Bored Ape Yacht Club and Cryptopunks projects contain the most blue-chip NFTs, while Azuki, Meebits, Doodles and Clone X also have a rich portfolio of expensive characters.

Because NFTs are sold as 1-for-1 commodities, this means that the number of NFT traders who are able to acquire blue-chip NFTs is limited. In addition, most of these NFTs are not offered as fractional NFTs, which allow users to purchase parts of a given NFT.

This is what KuCoin’s NFT ETF Trading Zone is trying to change.

Generally speaking, exchange-traded funds (ETFs) are trading instruments created based on an underlying pool of assets. As a result, when an investor buys an ETF, there is no ownership associated with the purchase, although trading data for the ETF can be used by investors to make a decision about the liquidity of the underlying asset.

KuCoin leverages the same concept by enabling NFT traders to trade NFT ETFs from the leading blue-chip NFTs. The company was also the first to introduce a USDT-dominated ETF product for specific blue-chip NFTs.

The new trading zone aims to expand access by allowing users to own proportionally shared ownership of native blue-chip NFTs, with the first token-backed bing hiBAYC, an “ERC-20 token representing 1/1,000,000 ownership of target BAYC in BAYC Meta -Swap by Fracton Protocol,” KuCoin said in a statement announcing the launch of the NFT ETF Trading Zone.

The company plans to launch more NFT ETFs in the future in collaboration with the corporate arm of the Fracton protocol.

KuCoin also indicated that hiPUNKS, hiSAND33, hiKODA and hiENS4 tokens will join hiBAYC as underlying assets initially.

The NFT ETF Trading Zone marks a giant step in the leading crypto exchange platform’s efforts to establish a mature NFT market by lowering the investment threshold for high-potential NFTs at the top of the crypto industry.

“In addition, it also provides an exceptional trading experience with world-class liquidity, a better way to invest in top NFTs through direct purchases with USDT, instead of ETH, and without the worries of managing NFT infrastructure elements, such as OpenSea, wallets and smart contracts”, writes the company in the press release.

Commenting on the launch of the company’s latest product, KuCoin CEO Johnny Lyu stated:

“As a trading platform that maintains its penetration rate in the NFT sector, KuCoin will continue to provide user-friendly products for investors to easily participate in NFT investments. We are very excited to become the first centralized crypto exchange to support NFT ETF- is that allows users to easily invest and trade top NFTs directly with USDT. In the future, KuCoin will continue to explore more NFT related products for our users.”

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