So you have joined the NFT space and are probably asking, what on earth are NFT floor prices? I understand the overwhelming number of NFT terms can be confusing.
But don’t worry. In this article, I will be covering all aspects of floor prices so you can navigate the space with ease. So without further ado, let’s jump right in.
In a nutshell, NFT floor prices refer to the lowest priced NFT in a collection. They are set by the creator at mint and then later with the demand from buyers.
How are NFT floor prices calculated?
Put simply, NFT floor prices are determined by supply and demand. Ultimately, if there is greater demand for the project then there will be a greater floor price. Conversely, if there is less supply on the market then this will also lead to a greater floor price.
How artists raise floor prices
Artists can raise floor prices by affecting supply and demand. On the supply side, they can do this by limiting the total supply. On the demand side, they can do this by improving the project fundamentally. Here are several examples:
Originality – This is the number one reason people purchase NFTs. If the artwork is original and creative then it will attract attention.
Marketing – social media can be used to generate hype for projects. This is done by a variety of methods. Firstly, general promotion through ads. Secondly, giveaways. Platforms often reward community members who promote the project.
Utility – fundamentally sound projects often provide value in the form of utility. This could be exclusive merchandise or events. For instance, NFTs can be used as tickets to concerts. Not to mention, by holding NFTs community members are often eligible for various rewards. This is typically in the form of airdrops whereby tokens are transferred directly to NFT holders wallets.
Community – ultimately NFT projects fail without a strong community. There needs to be an active community interacting with each other. This can be through Twitter, in person, or even the metaverse. In the case of Bored Ape Yacht Club, a metaverse was created whereby token holders could interact with each other in a 3D virtual world.
Reputation – this plays an important role in determining floor prices. Teams with a strong reputation and institutional backing are a good sign. On the other hand, if the team is anonymous this may be a red flag. The anonymous nature of the team means they face little backlash for malicious activity.
What does sweeping the floor mean?
Sweeping the floor is a term popularized by crypto Twitter. It refers to the bulk buying of NFTs at the floor price.
Best NFT floor price trackers
nftpricefloor.com – this is the most popular price tracker and for good reason. It features all the popular names from CryptoPunks to Bored Ape Yacht Club. The design is intuitive and users can filter on various categories including art, derivatives, gaming, etc. They can also filter the blockchain and search for specific collections and creators. In my opinion, this is the best NFT floor price tracker.
Niftyprice.io – this is also a solid platform. Like nftpricefloor, it features a user friendly design. Users can analyze various metrics including the floor price, volume, and supply history. It also features the current gas price which is useful for determining the cost of transacting. Not to mention, users can also connect their wallets which allows seamless analysis of their own NFT collections. This is also a great tool that i highly recommend.
Bottom line
Overall, NFT floor prices are the lowest price available in an NFT collection and it’s determined by supply and demand. Artists can increase the floor price by putting a low cap on the supply and improving the project fundamentally. At the end of the day, the floor price is probably the most important metric in determining the value of a project. I hope you found this article useful and thanks for reading.
Want to learn about blue chip NFTs? Click here to read my previous article.
