Are you exploring the world of NFTs? Below are 9 market terms that will help you explore this dynamic world of NFTs.
1:1
Pronounced “one of one” and sometimes written as 1/1, a 1:1 is an NFT that was issued as a one-time, exclusive edition. This property is written into the work code and is immutable once added to the blockchain. 1:1s are the NFT equivalent of a painting, are generally owned by a single person and are a format reserved for “masterpieces”. Placing a 1:1 with a notable collector, institution or fund in the NFT world is just as important as it is with works in the traditional art world.
The two most expensive NFT sales to date, Beeple's Everyday's: The First 5000 Days (a mosaic of 5,000 digital drawings sold at Christie's for $69.3 million in 2021) and Julian Assange and Pak's Clock (a relógio which shows the number of days Assange spent in prison that sold for $52.7 million in 2022), are both 1:1.
airdrop
Airdrops are free NFTs sent to the web3 wallets of collectible NFT holders. Air-launched NFTs are less valuable than the original NFT collectibles, although they can still be quite valuable. Collectibles Bored Ape Yacht Club Airdrops released a derivative of the original NFT called Mutant Ape Yacht Club, to 10,000 people who spotted it, and collectors pay up to $835,000 for a single one. This, however, is still much lower than the best-selling Bored Ape at $3.5 million.Airdrops sometimes feature work by emerging artists as a way to gain exposure. Other times, it might be Valentine's Day cards or drawn holidays. Many airdrops are on layer 2 blockchains such as Polygon (Etherium is a layer 1) as the transaction costs on these chains are much cheaper. Artists who do 1:1s, small edits, or generative art (definition below) should generally not provide airdrops to their collectors.
alpha
While the term comes from finance – where it is used to compare portfolio returns against a market index – in the NFT space, the meaning is closer to “intel”. Alpha is information given or obtained by a select group of people ahead of the majority of the NFT market. Speculative collectors sometimes form alpha groups, to exchange information about an artist or collectibles that can affect their value. For example, an artist may share details about upcoming releases, partnerships or exhibitions with their most loyal customers as a reward for their support.
Burning
Burning is the equivalent of erasing your NFT. Burning is usually done to reduce an artist's supply and increase demand and, by extension, the price of works. So, burning happens when a collector transfers their NFT to a non-existent wallet. Many NFT platforms have a recording function if needed. Sometimes an artist can give you the wallet address to send the NFT and they will take care of the Burning. There are also other examples, such as a collector acquiring three NFTs from an artist and then burning them all to obtain a higher value NFT from the artist.
Collectibles or PFP
Collectibles are large collections of NFT, usually 10,000 in size. They are also called PFPs (short for “profile picture”) because their owners often use the collectibles as their profile picture on social media (usually Twitter). Each NFT in a collectible is a unique variation of a figure, meaning they will have different characteristics (laser beam eyes, rainbow skin, green mohawks, etc.) with different rarities. Some features are extremely rare - for example, only eight out of 10,000 CryptoPunks have beanies - others less so. Despite the massive edition size, collectibles are the best-selling NFTs in the space. Seven of the 10 most expensive NFT sales are CryptoPunks, the original 10,000 collectibles, with the most expensive being sold at $23.7 million.
Collectibles differ from NTFs in that they often function as membership cards, granting their holders access to special websites, opportunities, parties, or future NFT releases. This aspect of an NFT is called utility. Other forms of utility include licensing rights to a holder's individual NFT and the ability to vote on community decisions such as which art is purchased for a collectible fund or which non-profit organization donates money to.
Collectibles are usually performed by a team of people, as opposed to a single artist. Successful collectibles such as Doodles, Bored Ape Yacht Club, CryptoPunks, Cool Cats or World of Women often become major global brands. Yuga Labs, creators of the Bored Ape Yacht Club, is a company that manages and produces collectibles – and the success of the Bored Ape Yacht Club has allowed them to acquire other collectibles (CryptoPunks and Meebits) from Larva Labs, the main competitor. .
generative art
Generative art refers to NFTs created with a randomization algorithm or AI. Predetermined rarities are often built into the algorithm so that certain features are more or less likely to appear than others. Generative art can take the form of moving or dynamic 1:1 or large edits of hundreds or thousands of permutations of still images. Collectibles such as CryptoPunks or Bored Ape Yacht Club are technically generative as they are made with a randomization algorithm. However, they are generally not called generative art, as their usefulness prevents people from seeing them as purely "art". ix.shells and Sofia Crespo are well known for making 1:1 generative art. The ArtBlocks platform is known for its generative art edits, partnering with artists such as Tyler Hobbs, Dmitri Chernick, and Jen Stark, among many others. The size of these edits tends to be between 200 and 2,000. Ringers #109 of Chernick's generative art collection on ArtBlocks sold for $7.1 million, making it the 11th most expensive NFT.
Mint
Mint is to add a work of art to the blockchain, whereby it officially becomes an NFT. Artists who make 1:1s or small collections usually mint their own work, covering any associated fees. However, when it comes to edits in the hundreds or thousands, it is generally forbidden for the creator to “Mint” all of their own NFTs. This is also true for open edits, which have no predetermined size limit, but generally limit “mint” to a period of 24 to 72 hours. In such cases, buyers will cover the fees. Mint is especially exciting when it comes to generative art edits or PFPs, because the buyer doesn't know which permutation they'll get. It's like buying a deck of Pokémon cards; inside could be a very rare first edition Charizard, but you won't know until you unwrap it.
Metadata
Metadata is the key data that describes an NFT. For many works, this is simply the artist's name along with the work's title, date, and description. However, for collectibles and some generative arts, Metadata is very important because it includes the characteristics of NFT along with its rarity. Most collectibles will have no more than 12 traits listed in Metadata. Bored Ape Yacht Club and CrytoPunks have no more than seven strokes per NFT. CryptoPunk #2624, for example, has “Cigarette” (10%), “Earring” (25%), “Wild White Hair” (1%) and “Female” (38%). Metadata is easily viewed on platforms like OpenSea and, for collectibles, is as essential to the NFT and its value as the image itself.
sweeping the floor
Sweeping the floor is the act of buying all of the minimum price NFTs in a collection. Minimum price is the lowest price an NFT in a collection can be purchased. Minimum prices are determined by two main factors: the state of the cryptocurrency market and the momentum of an artist or collection. The first causes the minimum prices to fluctuate a lot. It is not uncommon for a floor price to double over the course of a month or two and then fall back to its original price or lower. On OpenSea, the minimum price is posted at the top of the page, along with the total volume, the number of NFTs in the collection, and the number of current owners.
Sweeping the floor is done by collectors and the creator(s) of a collection. Collectors will sometimes have alerts that tell you when a floor price has dropped below a certain threshold, as well as sniper bots that sweep the floor at that price. When creators sweep their own floors, it's usually a form of market manipulation, designed to inflate the overall value of their collection.