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What are the factors that determine the value of an NFT?

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Go NFT or non-fungible tokens have generated a new trade where millions of content creators they offer their products or works at prices that sometimes exceed the imagination. But how is the value of an NFT determined?

There are no rules or methods to determine value as there are for other traditional assets. It is also not possible to determine the value that the next buyer will pay, nor how much the next seller will receive for the asset in their hands.

The value of an NFT resides in the perception of it at the time of purchase or sale. Since there is a lot of speculation surrounding cryptocurrencies, we in NFTs are also facing the same dilemma.

Given this, there are a number of factors that help us determine its value at the time of purchase/sale and for the near future.

rarity

The rarity is related to the shortage in and tab. By this we mean how unique it can be and how it can be revalued. Examples of this can be works of art, songs and tokens minted by celebrities.

the property of a token also means is a point of distinction and that he gives a lot of value, such as the Jack Dorsey’s first tweet which was sold by $2.9 million.

utility

Like a traditional cryptocurrency, another factor is the utility that they have He must have a actual application such as the possibility of tokenizing real estate, precious metals and even shares. Its value will be based on the usefulness and strength of the community involved in the project.

Tangibility

NFTs associated with real life objects reinforce the tangibility value thereof. This determines ownership and prevents fraud. This can be used in the short term as a ticket or in the long term as a property.

interoperability

The possibility of trading the NFT is various platforms It also allows you to determine its value. For ex. a weapon that can be used in various games. As long as several blockchains work, the easier the transactions will be

Although there must be a large network of decentralized applications or DApps, it will take time and efforts between the numerous existing projects.

social proof

Twitter and Instagram are social platforms that are allowed identify a community around the project. The more people are interested in the project, the more value the project could apply for.

property history

This is one of the main attributes that NFTs possess and that is to know who the previous and current owners. The fact of having been created by a celebrity or a large company will give the token more value.

The resale of NFTs is also a method to increase their price thanks to being able to know first-hand and in a simple way who the owners were, how much they paid or how much they acquired with the transaction.

liquidity premium

While greater liquidity and NFT, the higher value it will have. Secondary markets provide access to NFTs with standard CKD or BSC without problems to give immediate access to buyers. Traders prefer to put their money in more liquid NFT as it helps them make profit more easily. It is even possible that it retains its value despite the closure of its main platform.

A liquid market will help build a more competitive and robust market.

Speculation

the speculation it is one of the great catalysts of value. an ex. CryptoKitty #18 slipped from 9 ETH to 253 ETH in just three days in December 2017.

NFT item price performance charts, changes in assets underlying projects, and even events beyond your direct control can encourage speculation and drive NFT prices up.

Not projected in continuous evolution

Despite all the points made above, the NFT market is constantly evolving. Therefore, there is still no certainty about how to determine its intrinsic value, since it also has a strong subjective position about their value.

However, the future is very promising in view of the infinite possibilities that these assets offer, they will develop lucrative opportunities in numerous subcategories. Use cases have multiplied, but not all that glitters is gold. You will have to take the time to analyze all the related aspects and inform yourself so as not to fall into a scam.

Javier Molina: “After art, which was like the first large sector using NFTs, we have gaming”

We asked our expert and professor in the cryptocurrency, NFT and metaverse investment course Javier Molina for some more details about the value of NFTs.

– What other aspects, in your opinion, could we add to those mentioned to determine the value of an NFT?

The project or collection roadmap. It say, what does the team want to do after the NFT to continue giving it value over time. That’s key.

– If it were necessary to make a ranking of the majority of the sectors for the use of NFTs, do you think they would occupy the first three positions?

After art, which was like the first big sector using NFTs, we have gaming, all content creators, collectibles and now, all kinds of businesses that want to create a new way of interacting with users.

-In the future, will a regulatory framework on NFTs be necessary or will what is being worked on cryptocurrencies be enough to cover the legal field?

Yes. To achieve interoperability, the move to Web 3 or the Metaverse, in whatever its final development, some regulation and some standardization is necessary.

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