Seychelles headquarters for cryptocurrency exchange KuCoin has launched an exchange-traded fund (ETF) linked to major non-replaceable token (NFT) assets such as Bored Ape Yacht Club (BAYC).
KuCoin’s NFT ETF Trading Zone went live on Friday, the company announced. The new investment product will be launched in partnership with NFT infrastructure provider Fracton Protocol.
The KuCoin NFT ETF is a Tether (USDT) dominated product that highlights certain underlying NFT assets, such as Bored Ape Yacht Club. BAYC is one of five NFT ETFs launched by KuCoin. Trading under the symbol hiBAYC, it is actively 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 USDT stablecoin rather than Ether (ETH). It also eliminates the risks and concerns surrounding the management of NFT infrastructure elements such as portfolios, smart contracts and marketplaces such as OpenSea.
In addition to hiBAYC, the investment includes CryptoPunks (hiPUNKS), Koda NFTs (hiKODA), hiSAND33 and hiENS4. Starting with hiBAYC on Friday, the investment product hiPUNKS will list on August 4. The listings for hiKODA, hiSAND33 and hiENS4 will be announced at a later date, the exchange said.
The ETF marks a significant milestone in KuCoin’s efforts to accelerate the establishment of the NFT market by lowering the investment threshold of leading digital collectibles.
The exchange focused on developing the NFT sector, with the Wonderland interactive NFT launch pad launching in April 2022. KuCoin has also rolled out Windvane, another NFT marketplace offering an NFT launch pad, coin, trading, management and offers other services.
“KuCoin will continue to offer user-friendly products for investors, making it easy for them to participate in NFT investments,” said KuCoin CEO Johnny Lyu. According to Lyu, KuCoin is the first centralized crypto exchange to support NFT ETFs that allow users to invest and trade top NFTs directly with USDT.
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However, KuCoin is not the first to explore NFT ETFs. In December 2021, the registered investment advisor and fintech firm 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.