Every NFT is unique and has characteristics that make it unique or sought. Because of these factors, pinpointing an NFT’s exact worth is often challenging.
Collectors and investors looking to purchase NFTs may have difficulty determining whether an NFT is worth their money, in contrast to the clear value of tangible assets such as artworks or physical collectibles like playing cards. This is where NFT measurements like floor pricing come in.
This post will define a floor price, explain how it is calculated, what to look for, and where you can find it.
What Is an NFT Floor Price?
The lowest-priced NFT in a collection is called the floor price, and it is one of the most popular metrics used by collectors to judge a project’s viability.
How Do They Figure Out the Floor Price?
The owners of the NFTs in a given project determine the floor prices, which rise in tandem with the project’s popularity. A drop in the project’s floor price could indicate that interest in an NFT project is fading fast.
What Does It Mean to Sweep the Floor in the NFT Environment?
The term “sweeping the floor” is commonly used to describe the practice of purchasing large quantities of digital assets.
Owners and purchasers of NFT projects can benefit from “sweeping the floor.” For a project to “sweep the floor,” the owners must buy all NFTs at the floor price. Customers who “sweep the floor” purchase all or most of the NFTs available in a project. Together, they point to possible interference with the floor price.
Floor Price Manipulation: How to Protect Yourself
If you’re just getting started with an NFT project, buying the floor might be a good strategy.
It is not uncommon for an individual or group to aggressively purchase recently launched NFT projects with a high potential to increase demand artificially. The buyer(s) will then be able to resell these newly acquired NFTs at a higher floor price after the sweep, much like the way that ticket scalpers buy tickets at face value and then resell them at a higher price. As such, be wary of “swept” NFTs in projects that lack significant communities. In such cases, the project could have planned a sweep to increase the collection’s base price and total value.
Always check the NFT’s transaction history and DYOR to evaluate the project’s long-term value to avoid falling into floor prices manipulated by a sweep. Join their Discord and Telegram channels, and verify their communities’ authenticity by looking at the number of followers they have on social media. This will help you make an informed decision about whether or not to invest in NFTs.
Market forces largely determine the value of NFTs, and it is impossible to foresee the future of the NFT market with precision. However, your chances of success can be boosted by using metrics like floor price and thorough research to direct your purchasing strategy.