What is NFT Floor Price?
NFT Floor Price: NFT floor prices are a way for market participants to try and get a better idea of what an NFT project is really worth at the collection level. Removing in-collection factors like rarity, traits, and other considerations aids an NFT buyer’s decision-making process and analysis.
The simplest way to determine an NFT floor price is to take the NFT that is being sold for the least amount. As an illustration, the floor price for the Bored Ape Yacht Club (BAYC) NFT collection on Opensea is 79.079 ETH because that is the lowest listed price for a BAYC NFT on the market.
How to calculate NFT Floor Prices?
NFT floor prices can be calculated in a number of different ways. The simplest method is to simply take the lowest value of each NFT in the collection.
Let’s say that a random NFT collection has the $40 lowest price. The de facto floor price is thus $40.If someone purchases the NFT, the floor price rises to $50 and is represented by the subsequent NFT with the lowest price. The floor price drops to the NFT’s price if someone lists it for less than $40.
Also Read: What Are NFT Derivatives? How Are They Different From Original NFT?
Factors responsible for NFT Floor Price
The floor price of a given NFT collection may at first glance appear to be a straightforward and accurate measure of the NFT’s lowest possible value. To accurately determine an NFT collection’s floor price, there are a number of other factors to take into account.
- Marketplace Fragmentation
- Liquidity
- Outliers
- Price Manipulation
In the NFT Space, what Does Sweeping the Floor Mean?
Sweeping the floor typically refers to purchasing numerous digital assets, particularly those that are a part of a collection, in large quantities.
Sweeping the floor refers to both project owners and buyers in the NFT industry. If project owners sweep the floor, they pay the floor price for all of their NFTs. When buyers sweep the floor, it either means they bought many or all of the NFTs that were offered in the project. These two things point to possible floor price manipulation.
An NFT Floor Price Standard is required
New frameworks for NFT floor pricing are constantly being developed by the rapidly expanding non-fungible token ecosystem. Today’s environment requires users and developers to navigate a wide range of NFT data analytics projects. However, each of these has its own method for determining NFT floor prices. Little to no consensus exists regarding the most effective methodology.
The foundation of the Web3 ecosystem will be a standard NFT floor price feed. However, which will power NFT derivatives, lending and borrowing protocols, effective NFT pricing, NFT comparables, and other services.
Also Read: What is NFTs Rarity? Why Is Rarity Important For NFTs?
Top 10 most profitable NFTs (Update)
Here are the top 10 most profitable NFTs
- Bored Ape Yacht Club
- CryptoPunks
- Mutant Ape Yacht Club
- Autoglyphs
- Chromie Squiggle – Art Blocks Curated
- The Sandbox
- Azuki
- Decentraland
- Otherdeed for Otherside
- Clone X
How to Prevent Manipulating Floor Prices
Although purchasing the floor may be a good first move for new participants in an NFT project. However, the floor price is subject to manipulation. Newly launched NFT projects with high potential are frequently aggressively purchased by an individual or group to artificially inflate demand. Similar to how ticket scalpers buy event tickets and then resell them at a higher price, the buyer(s) can sell these recently acquired non-fungible tokens at a higher floor price after the sweep. Be cautious of projects where the NFTs have been “swept” that lack significant communities.
Always review the transaction history of the NFT you want to purchase. However, DYOR is to determine the project’s long-term value to avoid falling victim to floor prices that have been manipulated by a sweep. Join their Discord and Telegram groups and determine whether their communities, such as their social media followers, are reliable to aid in making decisions about NFT investments.
Conclusion
The value of non-fungible tokens is primarily determined by market forces. Also, it is impossible to predict with certainty what will happen to the NFT market in the future. However, using metrics like floor price and performing your due diligence to inform your buying strategy will increase your chances of success.
Also Read: What Is Real Estate NFT? What Impact Is It Having On The Real Estate Sector?
