Seychelles-based cryptocurrency exchange KuCoin has launched an exchange-traded fund (ETF) linked to major non-fungible token (NFT) assets like Bored Ape Yacht Club (BAYC).
KuCoin’s NFT ETF trading area went live on Friday, the company announcement. The new investment product is launched in collaboration with NFT infrastructure provider Fracton Protocol.
The KuCoin NFT ETF is a Tether (USDT)-dominated product that marks particular underlying NFT assets like Bored Ape Yacht Club. BAYC is one of five NFT ETFs launched by KuCoin. Trading 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-swap of the Fracton protocol.
The ETF aims to increase liquidity as it allows exposure to NFTs through the stablecoin USDT instead of Ether (ETH). It also eliminates the risks and concerns of managing NFT infrastructure elements such as wallets, smart contracts, and marketplaces like OpenSea.
In addition to hiBAYC, the investment covers CryptoPunks (hiPUNKS), Koda NFTs (hiKODA), hiSAND33 and hiENS4. As of hiBAYC on Friday, the investment product is program to list hiPUNKS on August 4th. Listings for hiKODA, hiSAND33, and hiENS4 will be announced at a later date, the exchange said.
The ETF marks an important step in KuCoin’s efforts to accelerate the establishment of the NFT market by lowering the investment threshold for major digital collectibles.
The exchange focused on the development of the NFT sector, launching the NFT Wonderland interactive launch platform in April 2022. KuCoin has also deployed Windvaneanother NFT marketplace providing NFT launch pad, mint, trading, management and other services.
“KuCoin will continue to offer investor-friendly products, allowing them to easily participate in NFT investments,” KuCoin CEO Johnny Lyu said. According to Lyu, KuCoin is the first centralized crypto exchange to support NFT ETFs which allow users to invest and trade top NFTs directly with USDT.
KuCoin is not the first to explore NFT ETFs, however. As of December 2021, registered investment adviser and fintech company Defiance launched the world’s first NFT-focused ETF on the New York Stock Exchange Arca. The ETF tracks an index of companies that operate or plan to operate in the NFT and Metaverse sectors.