NFTs have become extremely popular and famous around the world. Even an ordinary individual, far from the crypto sphere, has heard of it (and often takes a very negative view of it). NFTs have a total market cap of over $10.5 billion, according to CoinMarketCap. The trend is expected to reach more than $147 billion by 2026. In addition, “NFT” has become the Collins Dictionary’s word of the year in 2021. This somewhat original information is a good illustration of the enthusiasm that Internet users have been able to have for non-fungible tokens. These estimates may also indicate that NFT adoption may be higher in the coming years. However, not all NFTs are created equal. Their difference is based on their rarity, their designer and the uses (or advantages) they allow. Let’s take a look at this concept of scarcity for NFTs!
The uniqueness of an NFT
A non-fungible token, or NFT (for non-fungible token in English), is a unique blockchain-based token. It cannot be exchanged with another of the same kind due to its own properties. A creator can hit five NFTs on a whim; this does not mean that all five are identical and can be interchanged. The five collections may look similar and may have been minted together, but they all have distinct properties that set them apart from each other. The NFT has a unique character unlike a cryptocurrency.
For an NFT, scarcity is (often) synonymous with value
Defining the rarity of an NFT and therefore its potential price is a task that can be difficult. You’ve probably wondered why some NFTs are worth millions of dollars and others nothing at all? Others may have thought that the blockchain on which the NFT was minted influenced the price of it. Still others may have thought that the various NFT trading platforms decided the prices… But no, it is indeed the rarity of an NFT which will very often determine its value. Thus, most collectors demand rare NFTs because the rarer a collectible is, the higher the price of value. This is also why most NFT enthusiasts always want to know how rare an NFT is before acquiring it or how rare the NFTs in their collections are to determine how well they can list them in the market.
But then, how to calculate the rarity of an NFT?
It is easy to determine the rarity of two distinct NFT collections. For example, the Okay Bears and Bored Ape Yacht Club collections are among the best known. To cite others, Beeple’s First 5,000 Everyday and Jack Dorsey’s First NFT Tweet are great examples of NFT with an element of scarcity. On the other hand, to evaluate the rarity of an NFT within the same collection, the task is more complex. And obviously, no one would really want to do all this math themselves to find the rarity of every NFT they want to buy or sell. Don’t worry, there are several investment tools that will help you find the scarcity score with just a few clicks. Here are some examples…
RarityTools
Rarity Tools is the most popular tool for finding out how rare an NFT is. It ranks NFTs based on the rarity of their traits in real time. You can filter NFTs by average price, total sales volume, number of owners, and top collections.
HowRare.is
If you want to know the rarity of Solana NFTs only, then HowRare.is is the best option. The website has listed 255 Solana NFT collections based on floor price, number of items and holders, whether the NFTs are on sale, and more. As with the tools from RarityTools, in each collection you can find NFTs based on their rarity. Under each NFT, you can find their rarity rank, rarity score, and attribute details. There is also a sales history section where you can find details of recent sales. Besides, there are still others like Etherscan Token Tracker, Rarity sniper, Traitsniper, etc.
It is multitudes of details that make the rarity of an NFT
According to Rarity Tools, “the total rarity score of an NFT is the sum of the rarity score of all its trait values “. In other words, several factors must be taken into account within the same collection. For example, the attributes or traits considered are usually physical attributes like clothes, earrings, fur, hat, glasses, background, necklace, etc. It is these attributes that are used as criteria, because not all NFTs in the same collection can have them all; this is what makes them non-fungible.
Four methods to calculate them all
There are four different methods used to calculate the scarcity of NFTs. For each of these methods, various factors were considered as a tool. Compared to each other, some methods were found to be inferior because they considered one particular trait while excluding others.
First method: rarity of traits
The first is the trait rarity method. This ranking model examines the rarest trait of NFTs as a comparison tool. The limitation of this model is that it does not take into account the general characteristics of NFTs. Only the rarest trait is considered instead.
Second method: medium rarity
The second is the average trait rarity method. It considers all traits and uses the averaging method to determine a particular NFT trait before comparing the NFTs to each other. The limitation of this model is that it does not consider whether an NFT has a very rare individual trait despite considering the raw rarity of each trait.
Third method: statistical rarity
The third is the statistical scarcity method. The overall rarity of an NFT is calculated by multiplying all traits of that NFT together.
Fourth method: rarity score
Finally, there is the rarity score method. Rarity score is almost like the trait rarity model, but rarity score is usually calculated in a fractional fashion, unlike trait rarity, which is usually a percentage. The rarity score model is one of the simplest and most reliable ways to assess the rarity of NFTs. Most NFT sites use it.
Tools like Rarity Tools use rarity score. This is currently the simplest and least difficult method to use. In conclusion, it is fair to note that the value of an NFT will largely depend on its rarity, but also on the media weight of the artist or owner of such or such NFT. Eventually, the market for digital works in the form of NFTs works much like classic art. It is a form of business which, since the appearance of contemporary art and the primacy of the concept over aesthetics, is no longer based on beauty, but on a speculation of works of art. Your NFT will be much more valuable if a celebrity buys it for you. Or you will become rich, if the artist who created your NFT becomes known.
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