NFTX is a decentralized platform that facilitates NFT liquidity by converting NFTs into fungible ERC20 tokens called vTokens. Users can deposit NFTs into vaults to mint vTokens, which are tradable and redeemable for specific NFTs. The protocol features its own AMM, enabling concentrated liquidity and distributing fees in ETH. Participants can engage in inventory staking and liquidity provision to earn yields. Vaults are customizable, allowing for specific NFT eligibility and fee configurations.