Deciding the price of an NFT token is challenging because this digital asset is relatively new. Investors looking at your best NFT tokens might find it hard to determine the value of your digital artworks. However, multiple factors go into determining an NFT token price. Here, we explore exciting methods of determining the value of a particular NFT token.
What are the attributes of an NFT token?
Before diving deep into the methods you can use to value an NFT token, it’s critical to know what a non-fungible token is. The acronym NFT means non fungible token, a one-of-a-kind token that’s irreplaceable. Here are the main features of an NFT token:
- Rarity: A non-fungible token is scarce, meaning that creators have a limit when developing their digital collections. Scarcity drives the value of your NFTs. Each collection piece has rare attributes that make it distinct from the rest.
- Uniqueness: a superior quality of an NFT is that it’s unique and irreplaceable. Uniqueness determines the value of a non-fungible token.
- Ownership: ownership of an NFT is found in the metatext section. Because NFTs are indivisible, only one person can own them. Creators of these digital collections have private keys that enable them to control their assets.
- Indivisibility: you cannot subdivide an NFT into smaller pieces. This means that a buyer should purchase the whole item.
How to determine the value of an NFT
Are you finding it hard to determine the value of your collectables? If yes, here are the key factors to help you define the value of an NFT:
An essential attribute of the best NFT tokens is their scarcity. So, when building NFTs, it’s critical to ensure they’re rare. Rarity is a crucial thing to consider when you want your collections to generate high demand. Scarce NFTs are valuable, and many collectors want to own them.
But what is a rarity? Rarity refers to how scarce a specific NFT is. The rarity of an opensea token is determined by the qualities that surround the item. Some traits that define rarity include shade, attire, and design. Here are the techniques to use in deciding NFT rarity:
- Trait-based determinant: This technique assesses the rarity of an NFT token by gathering its scarce attributes. For example, suppose the red shade is a rare attribute in a degenerative NFT of 100 collectibles. And only 4 NFTs own this attribute. You can determine the attribute rarity of each item by dividing the total number of NFTs by the number of items with this trait: 100/4=25%. So, the rarity with red is 25% of the entire collection.
- Asset-based determinant: this technique gathers all the information from the scarce traits of each NFT. It produces a single value known as rarity ranking.
- Using various formulas: Here, you use specific rarity tools with procedures for measuring your collections’ rarity.
Utility is one of the parameters determining the NFT token price. Top NFT tokens with actual applications have a high value. The application can either be in the actual or virtual worlds. For example, you can use the NFT to tokenize real estate and rare metals. Also, you can use top NFT tokens in games, such as spells and characters. The utility of NFTs delivers instant value to your collectibles. The value can increase over time as per the popularity of your project. For example, as your NFT community keeps expanding, many will be willing to spend top dollars to play the games.
Some non-fungible tokens are pegged to the actual world items, which provide value based on tangibility. The collectibles are valuable in underlining ownership rights and removing cases of fraud. Practically, NFTs can support anything to concretize possession rights. However, that doesn’t imply that the object involved is unique and of great demand.
So, the underlying worth of the object will depend on the thing’s scarcity, and the satisfaction users derive from it. For example, having an NFT token ticket to a particular celebrity occasion is more cherished than owning an NFT pegged to a rose flower.
An NFT art token with tangible value is the best bet for short- and long-term exchange. While some non-fungible tokens in the NFT token list have expiry dates, others keep rising in value. For example, an NFT ticket to a celebrity event might be significant but has an expiry date. On the other hand, real estate keeps attracting more value as time passes.
A critical factor in determining the worth of an NFT is interoperability. This implies the ability to apply an NFT art token in different applications. For example, if the same firearm can be involved in various games, its value will keep rising.
Social proof has to do with the project’s acceptability behind an opensea token. The team’s social media accounts can help you evaluate its acceptability. A low number implies that the team hasn’t built a concrete ground.
The personality of the issuer and past owners of the opensea token is connected to its price. An NFT token list from famous individuals and corporate organizations enjoys a prestigious ownership track record and price. So, it makes much sense to collaborate with high-profile individuals and corporate entities.
NFTs with high liquidity hold high value. So, most collectors like investing in an nft token list with high exchange volume as enhanced liquidity assists them in recouping their returns quickly. Even if the allied platform is shut down, a high liquid NFT token will likely keep its value.
The acronym NFT means non fungible token, which is an irreplaceable token. Determining the value of this asset class depends on several factors, such as rarity, tangibility, and ownership history.