Time sure flies, especially in the NFT space. NFTs have been through quite a lot in the past year, with more people onboarding crypto and NFTs. Did you know that in August of 2021, the total number of transactions for OpenSea more than doubled? Yeap, it has been quite the wave, and we have been buidling in the shadows since last year.
So, what happened? What is new? What’s Next? What...? And many more questions. This post will shed some light on what we have been doing and who we are.
Over the past year, we have been studying NFTs, states of the market and the fantastic work done by the community. One of the areas that could use some love is valuing and appraising NFTs. However, not all NFTs are actively traded. It is an ongoing challenge to find a way to appraise them. Therefore, we woke up one day (last year) and decided to just do it! 🙃
The first production-ready model that we put out was made public last year 11th of May before Christie’s auction of the 9 “dev” CryptoPunks. We valuated the lot at 4,255 ETH, which came to $16.74M at the time. The auction took place on the 12th of May 2021, with the CryptoPunk lot selling at $16,962,500, giving our valuation a variance of less than 1%! So, what does this really mean? Did we crack the code? Are we going to be drinking mega-pints by the beach as our sale bot buys undervalued NFTs and sells them for profit? No. Not even close.
Our initial model that valued the CryptoPunks lot at Christie’s involved a great deal of "glue and wishful thinking" tailored to CryptoPunks and their distinct attributes. This meant that we could not simply use the same machine learning model for hundreds or thousands of collections and expect to get acceptable results. So, we embarked on a journey to:
- Create a comprehensive pipeline to create, train, and test models for multiple collections (With the goal of covering the whole market)
- Offer comprehensive data and tools for NFTs
We had significant challenges gathering and processing relevant data, whether directly from the blockchain or off-chain data from marketplaces. This was primarily due to the lack of standardization in the space, which was expected due to how new everything is. We will write about these challenges in a separate post in the future.
Aside from no longer being focused on valuing CryptoPunks, we have added many features and tools to our website. From simple statistics to full-on portfolio management and tracking tools. Below is a brief highlight of some of the key additions.
At the time of writing this blog post, we support over 400 collections with plans to add along the way. Have a collection that would be nice to have? Let us know via Twitter (@nftvaluations).
Portfolio management is a tool that allows you to track a group of wallets. You connect to our website using any Ethereum wallet (it does not need to be the same wallet as your NFTs) and sign a message to prove wallet ownership. Then, navigate to “Portfolio Management” under “Explore” on the navigation bar. Here you can create groups and add any wallets (yours or someone else’s) to the group. Once you have at least one wallet in a group, you can view various stats about the group and its NFTs.
Check out this group we have created of some NFT “whales”.
We are using two distinct approaches for valuing NFTs. One is a straightforward mathematical solution, while the other utilizes machine learning. Eventually, our goal is to have a single algorithm to “rule them all”. Although we are already working on separate posts about each valuation algorithm, you can see a summarized overview of each one below.
- Adjusted Floor (AF): Instead of oversimplifying a collection to its floor price multiplied by its number of tokens, we take the floor for the rarest trait of each token. We also added a small safeguard so rare traits with an artificially high floor will not manipulate the market cap. This is continuously updated as we come across new listings.
- NFTi (Stands for NFT index): It is powered by our machine learning model, which is automagically fine-tuned for each collection (so there may be some surprises, if you see some, please let us know!). Due to the intense processing needed, we update these once a day. We want to make them more frequent for high profile / busy periods at some point.
Refined Sale Volume
We currently support OpenSea, and we are working on adding support for more marketplaces soon. This means that we have knowledge of sales that happen on our supported marketplaces. For other sales, we consider them as “External Transfers” which simply means a transfer from a smart contract that we are not supporting. This may be other marketplaces, swap platforms, aggregate platforms, etc. and results in lower volume for some collections. In exchange, we avoid exaggerated sales like the CryptoPunk #9998 Sale for 120k+ ETH.
Furthermore, at the moment, we are converting transactions that take place with currencies other than Ether to their equivalent in ETH for the sake of calculations. In the future, we will highlight such transactions for clarity.
Change Metrics (1/7/30 day)
We track their changes over time for every metric from market cap and sale volume to listing and ranks. This allows us to show how each metric has changed across the last day, week, and month to provide a valuable overview of the state of the market or a specific project.
Full Website Overhaul
We have completely redesigned our website for better aesthetics and a better user experience for our functionalities. This redesign was made possible by hiring a full-time UI/UX designer in January of 2022.
Since last year, our team has doubled! We are currently a family of six developers, designers, and data scientists. That said, we are still actively looking for new members as we expand.
Right now, we are fully focused on the following.
Improving our NFTi valuation for all collections. This will be a permanent and ongoing task for us to improve our valuations constantly.
Reduce latency to import changes so that recent sales will be realized shortly after completion rather than in minutes. This will also enable us to
- Add support for ERC1155 tokens
- Support more marketplaces
- Add more insights about wallets (like what we are doing with collections)
That’s it for this post! I hope we didn’t bore you, and we appreciate you spending the time to read this. ♥ In the following days, we are going to be posting a series of guides on how to effectively use the various features on our website, as well as giving more insight into our valuation models.
We have poured our time and passion into NFT Valuations and are looking forward to your valuable feedback so we can improve our tools and better shape it around the community.