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Introducing the Scalara NFT Index

Christoph - Feb 4, 2022 | 2 minutes read

Scalara is proud to announce the launch of the Scalara NFT Index, a floor market cap weighted, yield enhanced index that tracks the performance of some of the most well-known and highly-valued NFT collections. The index provides diversified exposure to a rising new asset class at the intersection of art, culture, and blockchain technology. NFTs are non-fungible tokens that have their unique data and proof of ownership stored on a blockchain.

Yield enhanced

As an innovative feature, the Scalara NFT Index includes returns on top of NFT floor price performance by utilizing inventory staking on the NFTX platform. Inventory staking allows NFTX vault users to earn yield without the traditional risks associated with liquidity providing.

Index composition at inception

Currently, the index consists of 7 constituents:

Scalara data as of February 4, 2022. The Scalara NFT Index holds the respective xToken from NFTX.

In order to be included in the index, an NFT collection has to pass a screening process that ensures only well-established projects are selected.

Inclusion criteria and weighting

As part of the token inclusion assessment, a wide range of qualitative and quantitative characteristics are considered. The NFT collection needs to pass the following selection criteria to be eligible for index inclusion:

  • The NFT collection shows long-term traction. This is measured by assessing
    • Historical floor price performance and trading volume,
    • Price reaction to first bear market,
    • Strength of community following,
    • Recognizability and how well-known the collection is within and outside of the NFT space,
    • Time passed since launch
  • Tangible utility is not a significant driver of the NFT’s value.
  • Floor market cap greater than 20’000 ETH.
  • No token characteristics preventing liquidity providers from minting/redeeming the related ERC20 token efficiently (e.g. low NFT supply, low listed/supply ratio of NFT collection, majority of NFTs in NFTX vault frozen on NFT market places)

Eligible NFT collections are weighted by their floor market capitalization. To avoid concentration risk a constant capping factor may be assigned to NFT collections that would otherwise dominate the index. Currently the market cap of CryptoPunks is capped by a factor of 0.3.

The Scalara NFT Index is reviewed on a quarterly basis.

Scalara is dedicated to creating and maintaining indices for a decentralized world.

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