A Guide to NFT Rarity and Secondary Market Pricing
by Corporate Trash
You’ve set up your wallet and minted or bought your first NFT. Congratulations! But if you want to ever sell that NFT on a secondary market, knowing how rarity affects the value of that NFT is important. After all, each is non-fungible, and that means each asset in a collection can have wildly different values.
While much of visual appeal varies based on the collector’s preferences, many NFT collections build in rarity levels into the traits or properties of the NFT. These can often affect market demand and pricing for your NFT, so it is good to understand trait rarity in order to get the maximum value out of an NFT you want to buy or sell.
The good news is that MomentRanks NFT explorer shows marketplace listings and rarity side-by-side for the most useful look at NFT projects.
What are NFT Traits?
There are various types of NFTs, from profile pictures, to generative art, metaverse real estate, and many more. In every NFT collection, rarity is looked at differently. In many projects, each NFT is made to be distinctive and unique, with some rarer than others based on their properties. But in some projects, there are no NFTs rarer than any others, making it a much more subjective process to distinguish what will appeal to collectors.
When projects are minted, they are normally randomly generated traits from a large combination of available ones. These traits are placed into the metadata of the NFT and are visible on NFT marketplaces.
NFT projects can have many traits or zero traits. However, if there are too many traits, it can add unnecessary complexity to the rarity levels and therefore adds a barrier to investing in it.
Example of NFT Traits
Using Bored Ape Yacht Club as an example, there are 10,000 NFTs in the collection. Every single NFT is unique, and there are no two exactly alike. The trait filters on MomentRanks show how many items of the collection have that trait.
Available trait categories include Eyes, Hat, Background, Fur, Mouth, Clothes, and Earring. There are a total of 170 traits within all the categories combined.
The ape below’s traits are: Wide Eyed (Eyes), Halo (Hat), Purple (Background), DMT (Fur), Grin (Mouth), Bayc T Red (Clothes), and Silver Stud (Earring). While some of these traits are considered rare, some are considered more generic.
All traits aren’t also created equal. In this project specifically, the Earring trait is visually small and doesn’t take up a lot of space on the NFT, so even if a certain Earring is rare, collectors may not pay a premium for it. But the Fur trait is arguably the most distinctive of all, since you can see a lot of it.
Top Rarity NFTs
Below, we see the apes filtered by Solid Gold, the most rare Fur type. There are only 46 apes out of 10,000) that have this fur. This makes them amongst the most rare of all, as indicated on MomentRanks’ NFT analyzer by the pink jewel icons in the image below.
The #1 ranked BAYC (shown below) sold for 740 ETH on September 6, 2021, the second-highest ape sale ever at the time of this writing. Because the fur is the most prominent part of the ape, it tends to command the highest values on the secondary market.
The jewel icons symbolize how rare not just one trait is, but the combination of all traits combined. Most NFT projects have a rarity ranker in order for collectors to know where their NFT falls in the overall collection.
Subjectivity and Rarity
The subjective nature of traits also comes into play when considering pricing of an NFT. For example, in the Bored Ape Yacht Club, many enjoy the Sea Captain’s Hat trait, because it aligns directly with the idea of a yacht club.
Since the project also has released merchandise, apes with BAYC hats or shirts are also sought after. These are more common in-demand traits that a rarity ranker cannot take into consideration, but may still have an effect on pricing since more want to buy them.
For example, these “double merch” apes show varying degrees of rarity according to the ranker, but normally command a higher price point regardless.
Perhaps the most clear example of how rarity rankers can differ from true collector demand is the four-trait apes. These apes don’t have clothes, a hat, or earrings, meaning there’s only four traits out of the seven available. There are 254 of them, but there is not any available metadata or trait filter (no “number of traits” filter) to easily discover them.
NFTs like these are commonly referred to as “clean” by the community, meaning there aren’t a lot of visual distractions in the NFT (again, this is subjective). This is just one example, but it can be common for people to prefer certain aesthetics of a collection.
NFT Rarity Isn’t Everything
Many collectors heavily focus on the rarity of their NFT, since it can be tied to its perceived value in the marketplace. The good news about getting a floor (non-rare) NFT is that it is normally much more liquid (or easier to be sold for ETH) than rarer NFTs.
Collectors often mint middle-of-the-pack rarity NFTs, then price them higher than the market will pay for them. Many times, collectors will pay a massive premium for the highest end rare items, but won’t reach very much for middle-of-the-pack rare.
Listing a floor NFT means you don’t have to worry about leaving a lot of crypto on the table, since the price has been well-established by the market.
NFT Pricing Strategy: Check NFT value
MomentRanks has many tools for every Ethereum NFT project in order for you to research what price to buy or sell your NFTs. Besides seeing the entire current estimated value of your wallet, you can dive deep into traits, sales, floors, and rarities for any collection. This info is available in charts from just six hours ago through the entire history of the collection.
You can dig into listings and sales floor history for any trait in order to see what similar NFTs to yours have sold for in the past.
It’s always a good idea to check the floor of most of your traits on an NFT, especially if you don’t keep up closely with a project. This is because some traits can be more coveted for aesthetic reasons, as mentioned above, or it could have additional utility within the project.
After you visit your NFT collection on MomentRanks by connecting or searching your wallet, you can find the floor for the most valuable trait for your NFT with one click.
Summary: NFT Rarity and Pricing
Although rarity rankers show the mathematical ranking of your NFT’s combined traits, there are also many subjective pieces to determining market demand and price. The number of available traits differ greatly based on the type of NFT you own, and some may have very few and some may have many.
In addition, some trait categories may be more visible on the NFT than others thereby sometimes making those categories more important.
Getting involved in that NFT’s community is the best way to understand unique attributes for each NFT collection that buyers value more than others. Statistical rarity is only one piece of a large puzzle when it comes to figuring out the marketplace value for your NFT.
MomentRanks has many tools to help you to buy or sell an NFT at the right time. The NFT space moves at the speed of light, so having up-to-date data will give you the best chance for gaining maximum value.
Send Corporate Trash your NFT questions on Twitter: @corporatetrash1