Something very interesting has been happening recently in the world of NFTs thanks to a platform called Niftex. To clarify, NFT stands for non-fungible token. NFTs are unique tokens that have a wide variety of use-cases, including crypto art, assets in blockchain-based games or even crypto domains such as ENS (Ethereum Name Service).  

What is Niftex?

Niftex is a platform that allows owners of (usually rare and/or collectible) NFTs to ‘shard’ their NFT into fractions called ‘shards’. These shards exist on the Ethereum blockchain as ERC-20 tokens (the most common standard for tokens). The shards are then offered up for anyone interested in owning a fraction of the NFT. I like to call this the ISO - Initial Shard Offering. On the Niftex platform, the original NFT owner decides what percentage of shards they want to offer for the ISO, how many shards and at what price to determine the overall value of the NFT. The NFT is then ‘custodied’ within a smart contract. Niftex takes a small percentage of the shards as a listing fee. The ISO period is two weeks, or until sold out. If not sold out, the NFT owner acquires all remaining shards.  The ETH from the sale of the shards is also transferred to the NFT owner. There are also options for anyone interested to buyout 100% of the shards and assume full control of the NFT.

After the sale, Niftex then creates a liquidity pool on Uniswap with the shards acquired from the listing to create a market for others to buy or sell them.  

Some advantages of the Niftex platform include:

• allows markets to decide on what is fair value for the underlying NFT.
• makes rare and/or collectible NFTs more accessible.
• introduces a new ‘LEGO brick’ into the DeFi world, allowing creative individuals to carve out new use-cases for them.

Axie infinity

  Meet Venom, as seen on the Axie Infinity marketplace.  

I originally heard about Niftex through Axie Infinity community members. One of the earliest NFTs listed on Niftex was ‘Mystic Balloon Axie’ (MBA). I can’t recall how I acquired 1 MBA shard but someone (either Niftex or the Mystic Balloon NFT owner) on Twitter was promoting Niftex and MBA and giving the shards away. I didn’t think much of it. They had me at FREE. A month or so later another Axie was listed on Niftex - ‘Venom’ (VNM). This one was the real deal - a Triple Mystic (that means it’s rare and valuable!). With 10,000 shards at 0.011 ETH each, this bad boy had a valuation of 110 ETH! Funnily enough though the two-week sale ended and it was unsubscribed - only 43 shards of the available 9500 were sold to a total of six subscribers. Oh dear!     Look at that VNM chart! Taken from Niftex.com.  

Something funny happened to VNM not long after when the Uniswap liquidity pool was created. This was on the back of the 4chan Axie infinity hype and the massive SLP (SLP stands for ‘Small love potions’, which is the native token in Axie Infinity that players earn in-game) price pump. The 4channers who jumped on the Axie bandwagon got wind of Niftex and access to markets for rare Axies. At one point the VNM price reached 0.411 ETH, which put the total valuation at (wait for it ...) approximately 4110 ETH, about a 3700% gain. Too bad I missed that one. I could have got a nice return for my five shards.   Since then about five rare mystic Axies have been listed on Niftex and sold out within the first 24 hours (some within minutes!). I keep FOMO-ing into these (for all except VNM I’ve bought post-sale on Uniswap). It’s probably too much too soon and the sick gainz have eased somewhat. With the quick sales, the prices tend to pump 200%+ when listing on Uniswap and then dump again when profits are taken. Fair enough.  

So what?

When I heard about the idea of sharding NFTs, one of my first thoughts was that the underlying NFT then becomes useless and the shards themselves have no use. But then I thought of other platforms that fractionalise collectible assets such as Rally Rd and Masterworks. These platforms allow folks to buy and sell ‘shares’ in things like collectible cars and fine art. But what can you do with these shares? Nothing. What can you do with NFT shards? Nothing (or so I thought). So it’s not that different.  

The other thing is that there are a lot of creative folks in the crypto space and use-cases are already emerging for NFT shards. In the Axie Infinity marketplace, some folks are accepting shards as payment for Axies they have for sale. For one of the most recent Niftex listings (‘CANDY’), a Uniswap SLP/CANDY market has been created by @Axie44 - meaning that one can earn SLP by playing Axie Infinity and then spend it by buying shards of a rare Axie. Finally, one can add to the existing Uniswap shard pools and passively earn fees for providing liquidity.  

But wait, there’s more

@sillytuna (who incidentally also listed a triple mystic Axie on Niftex) has written about a NFT asset he owns within the game Neon District. He plans to list this on Niftex and, with future releases of Neon District, the shards (BAUS) will have some utility within the game. This made me wonder, could shards of rare Axies have some utility within Axie Infinity in future?  

Finally @coin_artist has written about her intention to create an NFT representing herself and fractionalise that on Niftex! With an impressive list of achievements within the crypto space already, this is definitely one to watch!!