What is NFT Scoring and How Does it Work?
What are NFTs?
For those who are a little more out of the loop about digital assets/collectibles on the blockchain, an NFT is a non-fungible token and is a unique digital asset that is traded on blockchain platforms. While on a blockchain, NFTs are not the same as cryptocurrency, which is interchangeable and can be easily swapped into other tokens, NFTs are all unique and cannot be replaced by another token.
Some examples of types of NFTs include digital art, membership passes, collectibles, and even deeds to houses and cars!
What is NFT Scoring
NFT scoring is a method of evaluating the rarity of non-fungible tokens (NFTs), which are unique digital assets that are traded on blockchain platforms. In this article, we will explore the concept of NFT scoring and how it works.
Although not limited to, NFT scoring, primarily known as NFT rarity scores or rarity rankings, is a method of evaluating and scoring the rarity of a particular non-fungible token on the blockchain. Typically, scoring is done by adding up the uniqueness of each trait on a particular NFT and the more unique your NFT is, the more the market can tend to value it.
The scoring of an NFT can be the difference between having a ‘floor price NFT,’ an NFT that will most likely only sell if it is listed for sale as the cheapest NFT in the collection, or an NFT that trades well above the floor price.
It is worth noting, there are various methods of NFT scoring, and the exact method used can vary depending on the platform and the type of NFT being evaluated.
How Does NFT Scoring Work?
As previously mentioned, the method for NFT scoring can vary based on the creator and the platform. However, most NFT scoring methods use a combination of the following factors:
Rarity: The rarity of an NFT is an important factor in determining its value. NFTs that are rare are typically more valuable than those that are more common.
Creator Reputation: NFT price can vary based on who created the NFT, personal feelings aside, having any form of social currency (also known as clout) can be helpful to the floor price of the NFT as a relevant creator can translate into a relevant project. The same can also be said the other way around, if the creator of an NFT is lacking in follower size or is problematic, this can have a negative effect on the price of the NFT.
Previous Sales: You wouldn’t pay $50 for a can of Coca-Cola after watching the person before you pay $1.99 would you? Previous sales are crucial for determining NFT scoring as the historical sales of a collection can tell you a lot about the future sales of a project. If a collection has never seen one of its tokens sell for more than 1.50 ETH, then you yourself should more than likely not be paying 1.50 ETH for that NFT.
NFT Scoring Websites
OpenRarity is a “community-built project that aims to provide a transparent, mathematically sound rarity calculation that is entirely open-source and reproducible by anyone. The goal is to bring more transparency to a previously opaque and confusing space” according to its website.
The platform promises to be “a verifiable, consistent & mathematically-grounded approach to rarity calculations.”
rarity.tools bases their rankings on a composite score of all traits on a particular NFT. The more rare the trait the higher the score of that trait, the higher the overall score is, the rarer the NFT is. Check out their website here!