Yo, gov!
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Gov Tip: If you’re new to Algorand, make sure to check out our Algorand Beginners Guide to begin your Algorand journey!
One of the most challenging things about investing in NFTs is determining how to value them. When I first started investing in NFTs, I often either priced too high or too low – losing out on potential gains.
It wasn’t until I upgraded my research that I finally started to have success with selling NFTs, particularly with generative series. In addition to research, my sales increased once I began to understand the different groups I was selling too.
You see, there are three main types of collectors of generative NFTs:
Floor Sweepers: These collectors have a long-term outlook on the project and want to accumulate as many as possible at lower price points. Traits and rarity don't matter as much as the price to these buyers.
Trait Enthusiasts: These collectors value certain traits over rarity and lower price points. They’ll pay a bit of a premium in order to get pieces from an NFT collection that they are enthusiastic about.
Rarity Hunters: The rarer an NFT, the more valuable it is to these collectors. Rarity can also include lower scores as there are buyers that value “clean” pieces (i.e., less traits) above all else.
Keeping this in mind can often help decide the right listing price for your NFT. To bring this to life, I’m going to review how I would determine the listing price of an NFT from my collection – walking you step by step through my thought process on Rand Gallery and NFT Explorer.
Gov Tip: There are other websites and tools we can leverage, like Asalytic, but Rand and NFT Explorer have a faster learning curve.
For the purposes of this guide, we’ll review how to list the following Crazy Goose:
I listed it at 1,666A in an attempt to get offers, but haven’t had much traction yet, so it’s time to revise this price based on the latest market data available.
Okay, let’s dive in!
Disclaimer: This isn’t financial advice and is meant to be educational content around my process to identify optimal listing prices for NFTs.
Step 0: Set ideal entry and exit prices before buying
Before you begin, set ideal entry and exit points on the projects you’re going to invest in. This step should be done long before you list an NFT, so you have clear goals from an investment perspective.
When I bought CGF #2668 at 300A, it was with the expectation that I would be able to make a 3x - 5x on it before the end of the year based on the overall growth of the project and the rarity of this particular piece (430/4,444).
Gov Tip: Check out the Club’s NFT Investing Guide to get a good idea of entry and exit points on popular projects, and how you can better plan your profits before investing.