How rare is your NFT? This new feature can help you
Not all non-fungible tokens (NFT) are created equal. Some have unique characteristics that are not widely shared. Collectors sometimes stumble upon such gems and want their value to reflect such. But it’s been hard to tell the rare ones from your regular NFT.
Now, non-fungible token rankings are made easier on OpenSea thanks to the launch of a new tool called “OpenRarity.” The American marketplace described their new idea as “rarity,” a method that standardizes unique digital images.
NFTs for the collector in question
“We use ‘rarity’ ranking to describe the relative scarcity of a non-fungible token’s attributes compared to another in the same collection,” OpenSea elaborated in a blog post.
“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.
Rarity is highly correlated with value. That is why exclusivity is important to NFT collectors. It has been difficult to put a finger on the exclusivity of the functions of one NFT section against the other in the absence of a standardized ranking mechanism.
The result has been chaos, says OpenSea. “When rarity ratings vary across platforms and use different methods, it can create confusion for buyers and sellers and make it difficult to use rarity for buying and selling decisions,” it said.
The plan is to build “a unified, open, transparent and reproducible standard for rarity rankings across the NFT industry.”
Why rate your NFT?
OpenRarity is a joint venture between OpenSea, icy.tools, Curio and PROOF. Users have the option to show whether their collections are rare or not. A collection that signs up must display a number that marks their rarity rank on the item page and on the collection page.
OpenSea said the classification is essential in markets that are interoperable, where different NFTs can be exchanged.
“If you hover over the number, you’ll see the percentage ranking. OpenRarity rarity rankings directly reflect the creator’s published attribute data, and may change over time if the creator makes changes to item metadata,” OpenSea detailed.
Pudgy Penguins, one of the earliest NFT collections on OpenRarity, has enlisted 8,888 non-fungible tokens with various attributes. According to a description of the collection on Rarity Tools, Pudgys “embodies love, empathy and compassion”.
They “are a beacon of good vibes and positivity for all. Each holder gets exclusive access to experiences, events, IP licensing opportunities and more,” it says.
Pudgy Penguin’s floor price averaged 3.8 ETH, or around $4,900, on Friday, up 2.7% on the day. The pool has seen 66 ETH (~$86,000) in sales in the past 24 hours, down 30% from the previous day, according to NFT Floor Price data.
Cool Cats, another collection, has 9,999 randomly generated non-fungible tokens on OpenRarity. The concept is that holders of NFTs can participate in exclusive events such as NFT claims, raffles, community giveaways and more.
At the time of writing, Cool Cats were selling for an average price of 2.95 ETH (~$3,800) each, rising 7.2% in the last 24 hours, with a volume of 96.89 ETH (~$126,000).
Rarity is not a magic pill
However, a recent study from the Stevens Institute of Technology found that rarity may not be the magic pill for NFTs. There are several potential disadvantages, it says.
Jordan Suchow, a cognitive scientist who led the study, warned that the buzz around rare non-fungible tokens needs to be managed, as there could be boredom among collectors.
“Because NFT trade records are public, they provide a remarkable chance for us to look at why people perceive certain things as valuable and how these change over time,” said Suchow.
Suchow studied collectors of the Bored Ape Yacht Club and observed decreased interest in the NFTs as time went on.
A monkey with accessories is considered rare, compared to a monkey that is plain. Suchow said this can be interesting at first, but as one’s collection continues to grow, the monkeys can end up looking the same.
“It’s a bit like collecting stamps: all the stamps look the same, so if there’s a misprint or some other rare feature that sets a stamp apart, people will pay a lot more for it,” he explained.
“Today, a newcomer to the Bored Ape trade sees these rare monkeys everywhere and perceives them to be much more common than they actually are.”
Continuing, Suchow observed:
“If a person wants to learn what a dog is, they can do so by going to a dog park and looking at a variety of common animals. Going to an experimental breeder and looking only at rare breeds, on the other hand, would skew their perception of the category and of how much a given dog is worth.”
The researcher concludes that rarity can become self-defeating as it discourages trade in common parts that make up the bulk of the market.
Not a new concept
Rarity is not a new concept. In traditional art and music there is something called ‘collectibles’, which are not produced for the mass market.
Hip Hop group Wu-Tang Clan sold their album, “Once Upon A Time In Shaolin,” to a crypto group for NFTs worth around $4 million. The album’s content is not yet available to the mass market.
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