Not all non-fungible tokens (NFTs) are created equal. Some have unique characteristics that are not often shared. Sometimes collectors come across these nuggets and want their value to reflect that. However, it can be difficult to distinguish rare tokens from regular tokens.
That said, ranking non-perishable tokens has become easier on OpenSea with the launch of a new tool called “OpenRarity”. The US market has therefore described its new factor as ‘rarity’, a method that standardizes unique digital images.
NFTs for the private collector
In a post, OpenSea explained, “The ‘scarcity’ ranking allows us to describe the relative scarcity of attributes of a non-fungible token compared to another in the same collection”.
“An NFT with rare attributes will have a lower rarity rating (such as 1 or 2) than an NFT that shares attributes with thousands of others in the collection,” it added.
Scarcity is associated with a strong correlation with value. This is why exclusivity is an important factor for NFT collectors. However, in the absence of a standardized ranking mechanism, it is difficult to determine the exclusivity of the attributes of one non-fungible token over another.
According to OpenSea, this has created a chaotic situation. “When rarity rankings vary from platform to platform and use different methodologies, it can confuse buyers and sellers and complicate the use of the rarity factor for buying decisions and for selling.”
The goal would then be to “create a unified, open, transparent and repeatable standard for ranking rarities in the NFT industry.”
Why classify your NFT?
OpenRarity is a joint venture between OpenSea, icy.tools, Curio and PROOF. The users have the option to indicate whether their collections are rare or not. A collection that chooses this option must display a number indicating its rarity rating on both the item page and the collection page.
According to OpenSea, this classification is crucial in interoperable markets, where different NFTs can be traded.
The platform explained: “If you hover over the numbers, you’ll see the percentage rank. OpenRarity’s rarity ratings directly reflect the attribute data published by the creator and may change over time if the creator makes changes to the asset’s metadata.”
Pudgy Penguins, one of the first NFT collections available on OpenRarity, listed 8,888 non-replaceable tokens with different attributes. According to a description of the collection on Rarity Tools, the Pudgys embodies “love, empathy and compassion.”
It is this description of a “source of good vibes and positivity for everyone. Each holder will get exclusive access to experiences, events, IP licensing opportunities and more.”
On Friday, September 27, Pudgy Penguin’s bottom price averaged 3.8 ETH, or about $4,900, down 2.7% on the day. According to data from NFT Floor Price, the collection saw 66 ETH (about $86,000) in sales in the past 24 hours, a 30% drop from the previous day.
Cool Cats, another collection, has 9,999 randomly generated non-replaceable tokens on OpenRarity. Under the concept, the holders can participate in exclusive events such as free NFT requests, raffles or even community gifts.
At the time of writing, Cool Cats is selling at an average price of 2.95 ETH (~$3,800) each, up 7.2% in the last 24 hours, with a volume of 96.89 ETH (about $126,000). ).
Scarcity, a magic formula?
However, a recent study from the Stevens Institute of Technology found that scarcity may not be the magic bullet for NFTs. Indeed, according to this study, there are several potential drawbacks.
Jordan Suchow, a cognitive scientist who led the research, warned that the hype surrounding rare non-perishable tokens must be managed because collectors can eventually get bored.
“Knowing that NFT trading data is publicly available gives us a great opportunity to explore why people see value in certain things, and how that changes over time,” Suchow said.
Mr. Suchow has studied Bored Ape Yacht Club collectors and has observed a decline in interest in these NFTs over time.
A monkey token with accessories is considered rare, compared to a more soberly dressed monkey NFT. That can be interesting at first, Suchow says, but as the collection grows, eventually the monkeys may all start to look the same.
“It’s a bit like a stamp collection: the stamps all look the same. So if there’s a misprint or some other rare feature that sets a stamp apart from others, people will pay a lot more to buy it,” he explains.
“Today, a newcomer to the Bored Apes trade sees these rare monkeys everywhere and sees that they are much more common than they actually are.”
Jordan Suchow added:
“If someone wants to know what a dog is, they can go to a dog park and see several common animals. On the other hand, going to an experimental breeder and looking only at rarer breeds would distort his perception of the type and worth of a particular dog.”
Thus, the scientist concludes that the scarcity factor could become self-defeating, as it would discourage trading the more common coins that make up the bulk of the market.
The concept is not new
Scarcity is not a new concept. For example, in traditional art and music there are so-called ‘collectibles’, which are not designed for the mainstream market.
The hip-hop group Wu-Tang Clan, for example, sold the single copy of its album “Once Upon A Time In Shaolin” to a crypto group like NFT, for a value of about $4 million. The contents of the album are not yet available to the general public.
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