CoinShares’ Twitter bot offers a ‘fair price’ on NFTs, some disagree

by · October 13, 2022

Digital asset manager CoinShares has launched an experimental Twitter bot that will, in theory, allow users to check the estimated market value of specific non-fungible tokens (NFTs), although a few have been less than thrilled with the estimates provided.

The firm announced the bot called “CoinSharesNFTAI” via Twitter on October 13 and outlined that the algorithm is focused on aggregating various datasets from OpenSea to determine the supposed “fair price” of an NFT.

In the Twitter thread, CoinShares said, “Pricing NFTs is no easy task” since their value is volatile and millions of them are available in the market, including those with no trading history.

Some users weren’t too impressed with the NFT value estimates, such as Goblin Town NFT hodler Jack Hermes (@systemic_bliss), who commented that CoinShare’s “model sucks” after it valued the NFT he bought for 2.694 Ether (ETH) to just 0.88 ETH, while another said it “seems to be a bit off” as the NFT in question was valued at 0.28 ETH by the fine despite having a floor of 0.48 ETH and a bid of 0.63 ETH.

Cointelegraph tested the bot using Seth Green’s well-known NFT BAYC #8398, which was recovered by Green in June for a $260,000 ransom after it was stolen by a hacker. NFT currently has a “best offer” of 70.6 ETH on Opensea and was valued at 79.65 ETH by the Twitter bot, worth $106,000 at time of writing.

There are around 50 NFT projects on OpenSea supported at this stage, including blue chips such as Bored Ape Yacht Club, Goblin Town, Pudgy Penguins and Cool Cats.

All of them are listed under the collections available this week, suggesting that there is a weekly rotating list of supported collections.

The newly launched fine comes just days after the digital asset manager published a report on constructing an NFT price index, on which the NFT fine is based. In the report, quantitative trade analysts Yanis Bakhtaoui and Hugo Schnoering noted that:

“ERC-721 tokens are uniquely identified by an id and a set of properties, and cannot be exchanged or shared. This property makes these assets difficult to price, as each NFT is unique.”

“These characteristics make the NFT market inherently illiquid: it is related to bid and ask, and if an owner does not want to sell his NFT, no one will be able to buy the same,” they added.

The report also outlines that market manipulation tactics such as wash trading – fraudulent transactions designed to pump prices – have had an important impact on NFT prices.

Related: Uniswap Labs Raises $165M As Attention Shifts To NFTs, Web3

To use the bot, people just need to tweet @CoinSharesNFTAI and provide a link to the token on OpenSea. It is not clear whether other marketplaces will be supported going forward.