Upshot, a firm building financial infrastructure for NFTs and other traditionally illiquid assets, announced the launch of Upshot Indexes, a new feature within the Upshot platform that allows NFT financialization projects to use Upshot’s API to build new financial solutions using indexes. Upshot Indexes function similarly to traditional indexes, enabling users to track a basket of assets, in this case, NFTs.
The methodology of these indexes includes considering the market cap of the assets in the collections for weight determination. Market caps are calculated using Upshot’s ML-powered NFT appraisals, providing a more accurate estimate of value than other, potentially unreliable valuation metrics such as floor price. By tracking a basket of NFTs, Upshot Indexes aim to offer tools for developers building NFT financialization projects, allowing those projects to provide diversified exposure and valuable insights into the broader NFT market.
“NFT indexes are not a new thing,” said Upshot Co-Founder and CEO Nick Emmons. “There have been several other attempts made – but they tend to fall short because of challenges with pricing accuracy, tracking illiquid NFT markets, and less-than-attractive baskets of NFTs to date. Our NFT index methodologies change all of that, giving projects the ability to quickly and easily develop accurate, flexible, and interesting baskets of NFTs to monitor.”
Initial Upshot Indexes: Yuga Index, Art Blocks Index, and PFP Index
Upshot is launching three initial indexes that cater to various NFT market segments:
Upshot Yuga Index–The methodology behind the Upshot Yuga Index monitors the performance of collections under the Yuga Labs umbrella, weighted by appraisal-based market cap. This methodology captures some of the most liquid NFT collections, enabling developers to offer exposure to verticals such as PFPs, metaverse, generative art, and gaming in a single index.
Upshot Art Blocks Curated Index–The methodology behind the Upshot Art Blocks Curated Index tracks the top 20 Art Blocks Curated NFT collections, enabling developers and projects the ability to offer exposure to cutting-edge generative art.
Upshot PFP Index–The methodology behind the Upshot PFP Index tracks the top 20 PFP (profile picture) collections, weighted by appraisal-based market cap. This index represents a significant portion of the NFT space, with many PFP projects driving social identity, community engagement, and network value within the digital realm.
By utilizing Upshot’s Index API, these index methodologies can be used as a price oracle for the creation of NFT perpetuals and other innovative financial products. This approach allows developers to create instruments that enable investors to gain exposure to a more diversified portfolio of NFTs, reducing the risks associated with investing in individual assets.
The value of these index methodologies extends beyond their potential investability. By providing a window into various NFT market segments, they help investors and market participants better understand trends, market dynamics, and the overall health of the NFT ecosystem.
Future Developments and Index Expansion
While Upshot will not be issuing these indexes as investable products directly, the company is actively exploring partnerships with financial institutions and developers to create ETFs, perpetuals, and other investment products based on the Upshot Indexes. As the NFT market continues to grow and evolve, Upshot plans to expand its index offerings to capture emerging trends and opportunities in the space.