In a candid and insightful interview with TheNewsCrypto, Vikas Singh and Abhishek Kumar Gupta, the co-founders of NFTFN, provided a deep dive into their journey, the unique offerings of NFTFN, and their perspectives on the evolving NFT space.
With backgrounds spanning telecom, blockchain, and fintech, these entrepreneurs bring a wealth of experience to the table. Let’s explore their vision, the challenges faced, and the exciting roadmap they’ve charted for NFTFN in the ever-evolving world of NFTs and decentralized finance.
TheNewsCrypto: Can you give a brief Self-introduction and how it started with NFTFN?
Vikas Singh (VS): I’m Vikas Singh, the co-founder and CEO of NFTFN. I graduated from NIT Durgapur, India, in 2012, and my career kicked off in a telecom company where I wore various hats, from customer support executive to contributing to the R&D department.
In 2016, blockchain caught my attention, and I delved deep into its potential. The promise of decentralization and its democratic decision-making intrigued me. In 2017, I worked in a healthcare startup in Hyderabad, engaging with CXOs and exploring how blockchain could benefit their businesses. It was during this time that I became a core member of India’s largest blockchain community, actively involved in discussions with industry leaders.
In 2018, I started my own bootstrap company, which still thrives, focusing on product development. Two years ago, I shifted my focus to NFTFN, formerly known as Bliv.Club, rebranded for better recognition. Abhishek, my co-founder, and I have been collaborating for a while, and we’ve been laser-focused on NFTFN for the past two years.
Abhishek Kumar Gupta (AKG): I am Abhishek Kumar Gupta, Co-founder of NFTFN. I’ve got a decade of experience in fintech and tech startups. After completing my marketing degree in 2013, I spent a couple of years working for startups, eventually leaping in 2015 to start a committee called Startup Delhi. This endeavor led to the building of India’s largest startup community with around sixty thousand members.
Through this community, I connected with Vikas, who has been my go-to guide for all things related to Web3. Despite the challenges posed by COVID, such as having to close down the co-working space I was running in Delhi NCR, Vikas and I continued our discussions and explored various ideas.
Now, onto NFTFN. In 2021, NFT flipping became a significant game, with OpenSea and other big players facilitating around fifty billion dollars worth of NFT trading. We saw an opportunity to venture into the NFT space, focusing on blue-chip NFTs, NFT derivatives, and NFT finance. Back then, NFTFi wasn’t a widely recognized term; we referred to it as NFT derivatives. However, over the past six months to a year, the term NFTFi gained popularity, and we find ourselves right during this evolving space. That’s a nutshell of our journey with NFTFN so far.
TheNewsCrypto: NFTFN is particularly upholding an NFT perpetual DEX. Could you guys tell us how exactly an NFT perpetual DEX works?
VS: What sets us apart is the domain we’re operating in. While the concept of perpetuals is familiar in the trading world, we’ve ventured into uncharted territory by applying it to NFTs. Traders are well-acquainted with the spot and futures markets, where they speculate on price movements. Our initial goal was to offer this opportunity to existing traders but in a new financial asset class—NFTs.
Deliberately opting for derivatives on NFTs was a bold move, knowing it was a challenging path. We were fully aware that we were ahead of the curve, but in the fast-paced world of crypto, being ahead is an advantage. What might take five years of innovation in other industries can happen in just one year in the crypto space.
Perpetuals, similar to futures but without expiry, became our focus. Positions roll over daily, and a premium is paid to maintain them. It’s a zero-sum game, and our platform remains neutral, allowing counterparties to join without us becoming involved. While not widely seen, perpetuals on NFTs have been explored by some competitors with less efficient price discovery mechanisms. We’ve made strategic decisions to ensure sound unit economics, prevent protocol bad debt, and implement robust risk management.
AKG: In 2021, the NFT market faced uncertainty and skepticism. However, our competitors made significant strides, educating the market on the growth potential. With one competitor reaching $500 million in trading within six months and another securing $70 million in three months, it’s clear that this type of product has a promising future. As we enter the next bull market, NFTFi is poised to become a major narrative.
TheNewsCrypto: How does going long or short on NFTs differ from similar strategies in the crypto market?
VS: Going long or short on NFTs is conceptually similar to what traders do in the crypto market. However, the distinction lies in the market. Instead of an individual crypto asset, it involves the collective volatility of the NFT market.
We’ve selected the most liquid NFT projects, determined their floor prices, and calculated a geometric mean to create an index representing the volatility in their floor prices. This index becomes the basis for trading on our platform.
Traders essentially speculate on this combined volatility, making decisions to go long or short based on market sentiment. Taking contrarian bets against the majority can often result in higher returns. On our platform, traders can leverage up to ten times.
So, while the product structure is akin to other perpetual markets, the uniqueness lies in the market itself. We’re the first to introduce an index and a unified order book, aiming to provide a centralized exchange experience within the NFT space.
AKG: It’s a replication of what’s already done in the traditional trading community market, where you can go long on Apple and short on Microsoft. In NFTFN, the underlying asset is different, but the principles remain the same. We’ve taken what works in previous markets, applied it to NFTs, and built a platform on top of it. It’s about providing a familiar experience in a different asset class.
TheNewsCrypto: What is NFT Indexing and how do indexes help in tracking the blue-chip NFTs?
VS: During our research for our first product in the perpetual domain, we were contemplating two things. First, we explored the idea of offering perpetual markets for individual projects, akin to Bitcoin’s perpetual market. We chose to create perpetual markets for projects like BAYC (Bored Ape Yacht Club) or MAYC (Mutant Ape Yacht Club), well-recognized and highly liquid NFT projects created by Yuga Labs. Owning these NFTs grants exclusive access to various privileges, signaling significant community value.
Efficient risk management would require substantial backing or could lead to inefficiencies in market maintenance if prices swung drastically in one direction. To address this, we shifted our focus to the index approach. Our methodology selects highly liquid NFTs, streamlining the decision-making process for our users. Criteria include substantial trading volume in the last thirty days, over two years of age, broad project distribution, and minimal wash trading.
While acknowledging the inherent challenges in an unregulated crypto market, we sought projects with the least wash trading and maximum distribution. This methodology ensures the index’s trustworthiness, with minimal influence from external factors. Supernova, our index, comprises the cumulative volatility of the five most liquid NFT projects, creating a reliable and robust investment option. The inherent liquidity of these projects makes it challenging to manipulate prices, ensuring a fair and secure environment for traders.
TheNewsCrypto: Aside from liquidity issues, what are the most pressing challenges within the NFT space that you are currently addressing?
VS: Beyond liquidity challenges, another significant concern is regulations and compliance. As a financial product operating in a market projected to be over a trillion dollars, we recognize the importance of being compliant and regulated by government authorities globally. Currently, we’re in talks with ADGM (Abu Dhabi Global Market) and exploring compliance in other jurisdictions to ensure our product meets regulatory standards and is accessible to users worldwide.
AKG: Another challenge we faced was the perception during the initial NFT bear market. Many believed the NFT market was dwindling, but I held a contrarian view. I saw NFTs as a means for users to signal their wealth in the digital world. While people might not explicitly showcase their crypto holdings, owning prestigious NFTs becomes a subtle way to convey financial status.
Our unique perspective is that non-fungible tokens (NFTs) will bring more institutions into the market compared to cryptocurrencies. Unlike crypto, NFTs offer a regulatory-friendly path for institutions to make a digital presence. Starbucks and Honeycomb beer dot ETH are examples of how institutions leverage NFTs for this purpose.
Our strategic focus is on NFTs becoming the preferred route for institutions entering the digital space, contributing to increased NFT activity compared to cryptocurrencies. As the market shows positive signs with rising trading volumes and increasing prices of blue-chip NFTs, our confidence in the NFT space and the broader Web3 ecosystem remains strong.
TheNewsCrypto: From your perspective, how do you see the regulatory space for NFTs evolving in various jurisdictions?
VS: Firstly, it’s crucial to acknowledge that some countries have embraced blockchain-friendly regulations, recognizing crypto as a legitimate commodity with full user control. Governments are establishing bodies to comprehend the impact of this technology, and the regulatory landscape is evolving.
Crypto is particularly relevant for countries facing internal economic challenges or those with a loss of faith in their fiat monetary systems due to severe inflation. NFTs, as a utility in the form of art, have historically been used by the elite to preserve wealth across generations. Regulatory stances on both crypto and NFTs are progressing, with some jurisdictions acknowledging NFT theft and developing mechanisms to address such incidents.
AKG: While crypto challenges the base of any country by directly competing with its currency, NFTs present a less direct challenge. Governments are keen on regulating NFTs to allow users to own and display them similarly to other assets, contributing to the mainstream adoption of NFTs.
TheNewsCrypto: How does NFTFN plan to leverage the evolving landscape of Real World Assets (RWAs) for growth?
VS: The intrinsic value of our product lies in the simplicity and efficiency of perpetual markets. Users can trade volatility without dealing with the complexity of owning and storing underlying assets, making perpetual an essential market. They bring substantial liquidity, and the acquired skill of trading perpetually attracts traders to new markets within the same skill range.
RWA is a potential catalyst for our growth. Aligning with the upcoming market, we can easily launch derivatives for real-world assets as spot market liquidity increases. While we’re currently focused on NFTs, the product’s offering and experience can extend to RWAs in the future, aligning with market evolution.
AKG: RWA is evolving, and our platform can play a critical role in amplifying their product to the masses as they gain traction. As RWAs mature and develop good spot volume, we plan to integrate our product, converting RWAs into NFTs and then into perpetual. This roadmap positions our product for future growth and diversification.
Disclaimer: The information provided in this interview article is for informational purposes only. It is not intended to be, nor should it be construed as, investment advice, financial guidance, or a recommendation to make any specific decisions. Readers are encouraged to conduct their research.
