NFT or Aka Non-fungible Tokens has taken the world by storm. From Beeple who was the first NFT artist to sell his NFT artwork for a whooping $69 Million Dollars taking him to the top of the charts to Twitter Founder Jack Dorsey, who sold his “First Twitter Tweet” as an NFT for a staggering $2.9 Million dollars. This hype of NFT’s is not going to end any sooner and if you think you’re late in this game, there’s good news because the NFT market is just starting to grow and it hasn’t yet reached it’s fullest potential.
Which is the reason why many of the big tech startups haven’t even touched NFT’s yet, besides Facebook who is finally planning on to enter the NFT space by completely rebranding itself.
But before we dive deep into the article, Take a look at Femmes Bizarre NFT
Femmes Bizarre NFT Collection | Created by a 17 year old Young Female Talent
A young feminine artist created an uncompromising collection of art that consists of 11,111 creative NFT’s living in the Ethereum Blockchain. The one thing that comes to my mind after looking at her collection is creativity and talent at its finest as she has combined her passion for fashion and creativity and used the medium of Non-Fungible Tokens to share her art with the world.
With ambitious visions of creating a Global Brand around her art, Metaverse, Charity and so much more. If you haven’t checked out the Femmes Bizarre NFT Collection, you should absolutely do so.
Minting is going to be live soon, Join the Official Discord of Femmes Bizarre NFT Project – https://discord.com/invite/kQWQ2QXB
Website – https://www.femmesbizarre.com/
Twitter – https://twitter.com/Femmes_Bizarre
The topic for today is “How to Find the Rarity of an NFT?”. This is one of the most asked questions by most people on the internet because when you are investing into NFT’s, there is literally no way to find out if the NFT’s are valuable or not. There’s a huge reason for it and I’ll get to that very soon. But before we dive further into our main topic today, let’s help the new comers who have just discovered NFT’s. If you know, what NFT’s or Non-Fungible Tokens are then you can skip the first section of the article and directly head towards How to find the Rarity of an NFT?. However, if you are actually new in the world of NFT’s then I’ll explain to you what NFT’s are.
What are NFT’s and Why are they so valuable?
NFT’s stands for Non-Fungible Tokens and they are literally just “Crypto Tokens”. They are just like any other Crypto Tokens you’ll find on the internet, like Bitcoin, Ethereum, Dogecoin….etc. However, the thing that makes these Crypto Tokens aka, NFT’s unique and special is the term called “Non-Fungibility”.
NFT’s are crypto tokens that are Non-Fungible meaning they cannot be mutually exchanged with each other. Unlike Bitcoin or ETH, for example, if you and your friend have 1 BTC each. You two decide to exchange Bitcoins with each other. When you do that, you and your friend will have the exact same Bitcoin and there will be no difference in the value. This is because traditional Crypto Tokens are “Fungible” and they can be mutually be exchanged with each other.
While NFT’s are Non-fungible and it is not possible for a person to exchange NFT’s with other people. Due to this reason, each NFT’s are now unique and possess the quality of being “One-Of-a Kind”. Remember those Pokemon Trading cards, where the rare Charizard card had lots of value. NFT’s share a similar thing and they possess the quality of being rare and unique.
The process of creating NFT’s is called “Minting” and when NFT’s are minted, they are essentially tied to or represent a digital asset that could be anything from an Original Artwork, Painting, music, videos or any digital collectibles. Keep in mind, these digital assets are indeed NFT’s and Crypto Tokens as when Minted, users are able to decide what kind of digital asset they want to turn into this particular NFT and that NFT gets a Token ID and all of its information is stored in the blockchain.
How to Find the Rarity of an NFT?
Wouldn’t it be nice to be able to spot the next Cryptopunk NFT project using just a tool. While, finding the rarity of an NFT is a complicated process and most of the time, it’s impossible for a person to know how rare an NFT is just by looking at the NFT.
Fortunately, there is a way to find the rarity of an NFT and that is using a tool called Rarity Tools.
Rarity Tools is exactly what it sounds like, it’s a tool that helps you find the Rarity of an NFT, through something called Rarity Score. How the score is calculated will be discussed in sometime but take a close look at the image given below.
It’s the image of CryptoPunk #7804 which is currently valued at 4200 ETH which approx. $17 Million Dollars. It’s got a really high Rarity score of 2329.18 and if you look closely into the properties of the Crypto Punk Characters, factors like “Punk Type”, Full Type, Hair, Eyes and other features adds to the value of the NFT Rarity Score.
Go to “All Collections” and you’ll find a list of the top 500 NFT Projects Ranked according to their Rarity Score.
The rarest and on the 1st rank is definitely “CryptoPunks“, however on the 2nd position, it is Bored Ape Yacht Club. Things get more and more interesting as you move down the ranks. As you’ll find the top performing NFT projects that are most likely to rise in value in the future.
If you click on any one of the projects, say “VeeFriends” for example, you’ll be able to get a list of all the NFT’s in that NFT Projects ranked according to it’s Rarity Score.
Now if you click on one of the NFT’s, you may notice that some NFT’s get a higher Rarity Score. VeeFriends was an NFT Project created by Gary Vaynerchuck and one of the NFT’s as you can see has got a Rarity Score of a whooping 4432. This tells us that, the NFT’s in the Vee Friends NFT project is highly valuable and is likely to rise in value in the future.
If you would like to, you can check the Rarity Score of your own NFT asset. To do this, copy and paste the asset ID of your NFT and paste it on “Project Section”.
By clicking on “Lookup”, the Rarity Tools will show you the Rarity score of your NFT asset and all the values and properties it has.
Rarity Tools is a great way to find out the rare NFT’s and whether or not, if an NFT has value or not.
How does Rarity Tools calculate the rarity of an NFT?
[Rarity Score for a Trait Value] = 1 / ([Number of Items with that Trait Value] / [Total Number of Items in Collection])
The total Rarity Score for an NFT is the sum of the Rarity Score of all of it’s trait values. – From – https://raritytools.medium.com
While Traditional rarity ranking methods gives too much importance to the over all traits and properties of an NFT, while the single trait of an NFT is not given much importance. This means, that in the traditional methods, if an NFT had 7 traits and one of them was rare, it would not be possible to determine the rarity score of that NFT, in other words, the rarity score would be incorrect.
However, what Rarity Tools uses is their “Rarity Score”, which emphasizes on a single trait of an NFT, but also includes overall trait rarities while calculating the rarity of an NFT. This way, a perfect Rarity Score is created that helps us determine whether if an NFT is rare or not.
Is the Rarity Score worth using for Investments?
This is one of the most important questions that would first come to your mind before you use Rarity Tools. In fact, this is an important question to address because, we are using Rarity Tools to not only scout for potential highly valuable NFT’s but many of us may depend on the tool to buy the NFT.
Here’s what you need to know. The Rarity Tools is just there to help us figure out whether if an NFT is rare or not. If an NFT has a high Rarity Score, this means that there are high chances of the NFT for growing up in value and also making you lots of profits in the future.
This Rarity Score however, doesn’t mean that, the moment you invest in a particular rare NFT, you will be able to sell it immediately in the future.
Because the NFT Market is a highly ill-liquid market meaning, if you invest in any one of the NFT Projects, you can’t expect buyers to immediately purchase your NFT. Compare that with Crypto-Currencies which is a highly liquid market where if you purchase a Crypto-Currency, you can almost sell it immediately.
This means, you cannot totally depend on Rarity Tools for investments. You have to take into account, the ill-liquid nature of the NFT Market and then decide which NFT’s are a good investment.
So, here if you check that an NFT has a really high Rarity Score, chances are that no one is actually interested in buying that NFT.
Out there I have explained the concept of communities in NFT’s and how the communities are so important in NFT’s. This means that, if you are investing in a particular NFT Project, you have to make sure that, the company or person behind the NFT Project has build a good community base.
Because if there are more people in the community, the problem of ill-liquidity is solved as you’ll be able to sell NFT’s faster. And here, if you use Rarity Tools, and find that some NFT’s have high Rarity Score’s, then you can be sure that, you’ve caught yourself with a gold mine.
But without doing home work and your research on the market, never invest in NFT’s just by using the scores given by Rarity Tools. Ofcourse, the tool is great for checking the rarity of an NFT and also scouting for new NFT projects, but when it comes to investing, you have to have a clear picture of the NFT market.