NFT Market Too Frothy? Now You Can Short It

SynFutures’ new Tinder-like product allows investors to bet against NFTs.

AccessTimeIconOct 5, 2021 at 7:00 p.m. UTC
Updated May 11, 2023 at 5:48 p.m. UTC
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Decentralized derivatives exchange SynFutures is launching NFTures, a product that lets users bet on the future prices of non-fungible tokens (NFT).

Targeted toward retail investors, NFTures uses a user interface similar to what’s used by the Tinder dating app to streamline the trading process, while bringing game-like elements and leverage to NFT markets. The decentralized protocol is based on SynFutures’ existing synthetic automatic market maker (sAMM) model to match counterparties.

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  • NFTures user interface
    NFTures user interface

    “Every healthy financial market needs a way for participants to take both sides of the market, and NFTs are no exception,” said Rachel Lin, CEO and co-founder of SynFutures. “By providing a way for users to take long or short positions in NFTs, we’re enabling more robust trading strategies that allow users to maximize profit opportunities while hedging risk and exposure.”

    NFTs have seen rapid growth in recent months, generating $10.7 billion in trading volume during Q3, an increase of 704% from the previous quarter, according to data from DappRadar.

    Projects such as CryptoPunks or Bored Ape Yacht Club have notched sales in the millions of dollars, with NFTs even drawing in sophisticated investors such as NFT-focused hedge funds.

    Prior to NFTures, collectors could only “buy and hold” NFTs in hopes they would increase in value, according to SynFutures.

    “Those who wanted to speculate on downward trends had to bet against entire markets, shorting the native tokens of NFT-centric products like Axie Infinity ($AXS) and SupeRare ($RARE),” the company explained in a statement. “With NFTures, SynFutures has created an intuitive platform for traders to long or short specific NFTs at any time and take advantage of better price discovery.”

    NFTures bases its contracts on spot price oracles from decentralized exchanges such as Uniswap and SushiSwap, as well as NFT fractionalization protocols such as Unic.ly and Fractional. Similar to traditional futures markets, the spot and futures prices eventually converge on a set periodic schedule.

    NFTures user interface (SynFutures)


    However, risks of oracle price manipulation remain as the nascent NFT market grows in size and liquidity.

    The project also highlights the current renaissance in NFT-related decentralized finance (DeFi) projects, including NFT-backed collateralized lending or the tokenization of physical assets.

    “NFT-specific derivatives products will add more depth to the nascent NFT market, just as options and futures contracts play an important role in established financial markets,” said Lauren Stephanian of Pantera Capital, an investor in SynFutures.

    “It’s still early, so we want to help create the financial framework for what will inevitably become a major asset class at the intersection of crypto and art,” added SynFutures’ Lin.

    In June, SynFutures raised a $14 million Series A round led by venture capital firm Polychain Capital.

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    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Tracy Wang

    Tracy was the deputy managing editor at CoinDesk. She owns BTC, ETH, MINA, ENS and some NFTs.


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