Fungify raises $6M to build new NFT lending primitive

Utilizing Chainlink’s NFT floor pricing feeds, Fungify offers instant NFT sales, NFT collateralized loans and a yield-bearing blue chip NFT index.

Fungify DAO has announced the completion of its 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 contained within the Fungify MarketVault. This enables anyone, regardless of investment level, exposure to a broad set of community-curated NFTs without concern for the illiquidity of any individual NFT.

The NFT Index Token is also used as the unit of account for loans, allowing the protocol to factor out the broader market’s volatility. This increases the legibility of the system and allows for risk parameters to be agnostic of U.S. dollar-denominated movements in the NFT market. Using Chainlink NFT floor pricing 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 (ETH) derivative backed by monkey jpegs. They want exposure to the monkey jpegs themselves. And they want it without needing tens of thousands of dollars. It’s the demand for fractional exposure that can really scale not just the protocol but the entire ecosystem.” 

The Index token also provides staking yields from interest and sales, making it strictly better than trying to achieve the same exposure. Moreover, the index automatically rebalances while maintaining its value relative to the broader NFT market via arbitrage.

Hanzo, a protocol engineer at Fungify, explains one draw of the redemption mechanism for users:

“There’s actually a fun element to the redemption mechanism because you can redeem the index token for a random NFT, and if it helps stabilize the peg, 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 its 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

Docs: https://docs.fungify.it