What Is An NFT Floor Price?
Main Takeaway:
The floor price is the lowest-priced NFT within an NFT project.
Floor price is one of the key metrics collectors and investors consider when evaluating the intrinsic value of an NFT.
If you’ve ever been surrounded by NFT enthusiasts, you’ll likely hear the term “floor price” being thrown around in the conversation.
Every NFT is unique and features different attributes that make it rare or sought after. These attributes also make it difficult to determine the precise value of an NFT.
While tangible assets like artworks or physical collectibles like playing cards have defined values, collectors and investors looking to buy NFTs may have a hard time deciding whether an NFT is worth their money. This is where NFT metrics, such as floor price, come into play.
This article will explain what a floor price is, how they are calculated, what to look out for and where you can find it on Binance NFT.
What Is An NFT Floor Price?
The floor price refers to the lowest-priced NFT within a collection and is one of the most widely used metrics collectors use to evaluate a project.
For example, the floor price of a Rh!noX NFTat the time of writing is 816.92 USD. This means if you want to buy a Rhi!noXNFT, 816.92 USD is the cheapest option you have to get in on the project.
How is the Floor Price Calculated?
The people who own an NFT within a project set up floor prices – the more popular an NFT project gets, the higher the floor price. A sudden reduction in a project's floor price may suggest that an NFT project is losing traction.
Interested in learning more about other NFT evaluation metrics? Read more about How to Assess the Value of an NFT.
What Does Sweeping the Floor Mean In The NFT Space?
Generally, “Sweeping the floor” refers to buying digital assets in bulk, specifically assets that are part of a collection.
In the NFT space, sweeping the floor can be applied to both project owners and buyers. If project owners sweep the floor, they purchase all of their NFTs at the floor price. When buyers sweep the floor, it either means they bought all the available NFTs in the project or many of them. Both of these indicate a potential manipulation of the floor price.
How To Avoid Floor Price Manipulation
While buying the floor may be a solid starter strategy for newcomers joining an NFT project, the floor price can be manipulated.
It's not uncommon for newly minted NFT projects with high potential to be aggressively bought by a person or a group to drive up demand artificially. After the sweep, the buyer(s) can sell these newly acquired NFTs at a higher floor price — similar to how scalpers purchase event tickets and resell them at a higher price. Likewise, be mindful of projects without significant communities where the NFTs have been ‘swept.’ In instances such as those, the project could have arranged a sweep to raise the collection’s floor price and overall value.
To avoid falling into floor prices manipulated by a sweep, always review the transaction history of the NFT you want to purchase and DYOR to assess the project’s long-term value. Join their Discord and Telegram groups; see if their communities are legitimate, such as their followers on social media, to assist in decision-making around NFT investment.
To learn how to protect yourself from NFT scams, check out our article on Common NFT Scams & Safety Tips 2022 .
Where Can You Check The NFT Floor Price Chart & History On Binance NFT?
You can easily locate the floor price of an NFT collection on Binance NFT Marketplace in two ways. One way is to head to the Top Collections under Ranking where you can see a list of trending NFT collections and their floor price.
If you are looking for the floor price of a specific collection, simply enter the name of the NFT collection in the search bar and you’ll see the floor price visibly displayed at the top. Additionally, you can also see the live changes in floor price on the Binance NFT marketplace, as shown by the percentage change.
Conclusion
Market forces primarily determine the value of NFTs, and it's impossible to predict the future of the NFT space with certainty. However, you can increase your chances of success by using metrics such as floor price and doing your due diligence to guide your buying strategy.
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Read the following helpful articles for more information:
(Academy) 7 Things You Should Know About NFTs
DISCLAIMER: NFTs are an emerging asset class that is still evolving. The information in this article should not be construed as investment or financial advice. Always do your own research before making any decision to buy, sell or trade NFTs.