There are two types of funds on NFTX:

• D1 funds (input) have a 1:1 backing between a single NFT contract and an ERC20 contract. For example, if Alice owns 2 PUNK-ZOMBIE, that means she can redeem exactly two random zombie CryptoPunks at any moment. Another example would be Alice owning 1 AXIE-MYSTIC-2, giving her the ability to redeem one random Axie with two Mystic parts.
• D2 funds (top-level) are Balancer pools which combine D1 funds. For example, AVASTR will be a D2 fund which combines three different D1 Avastar input funds (AVASTR-BASIC, AVASTR-RANK-30 & AVASTR-RANK-60). The point of this is to offer more diverse exposure without requiring users to hold multiple tokens.

When a new fund is created, the account which sends the transaction is designated as the fund manager. This allows the creator to change fund parameters like fees, supplier incentives, and NFT eligibility. When the creator is done modifying the fund they can then “finalize” it which gives up their control to increase trustlessness.