Chapter 5

NFT Price

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How is the NFT price set?

Once you learn the basics of NFTs and their functionality, the next question that often comes to mind is about price. Who sets this price and how is value determined are both common questions for those who have never dealt with NFTs before.

An NFTs value depends on a variety of factors, but the most important one is the type of asset that it represents on the blockchain. If the asset is something tangible in the physical world, such as a house, the price in the physical world is reflected through its NFT. But if the asset is a 100% digital piece of content that doesn’t come with a starting price, its value (much like most things) depends on the market demand.

It’s the concept of scarcity vs. demand: If there is something scarce that is in demand, more people are willing to pay a premium for it, and hence the price will likely go up. On the flip side, if there is limited demand and it’s widely available, the price will likely go down.

Much like art in the physical world, each piece’s value is determined by market sentiment and what potential buyers are willing to pay for it. The seller can set the price of their specific artwork to any level they want. Whether the buyer will pay for it is a different story.

When we combine these two variables in terms of a seller’s asking price and a buyer’s willingness to pay, it decides the value of an NFT.

What is NFT floor price?

NFT floor price is the lowest price for collection items, rather than the average item price, and is updated in real-time.

In the NFT market, you can think of the floor price as the lowest amount of cryptocurrency you are able to spend to become a member of a specific project (ie. own an NFT). Floor price is set by the individual who owns an NFT in a specific project and is listing the NFT for sale at a price cheaper than all other sellers within that given project.

What is the most expensive NFT?

The most expensive NFT ever sold was a piece called “Everydays: The First 5000 Days” by digital artist Beeple, until recently, when that record was smashed by digital artist Pak, whose “Merge” NFT Project sold for a total of $91.8M.

The most expensive NFT series is CryptoPunks, with multiple $5M+ NFT sales over the course of 2021, while someone famously declined an offer of close to $10M.