Thread by @mudacumasekali

😎 HOW TO QUANTIFY a Book value of an NFT?
Most of us an NFT investors or traders, we value an NFT project by analyzing the qualitative variables of the project.

But what if there is a way to quantify it?
Let's talk about that

#NFT #NFTGiveaways #NFTdrop #NFTCommuntiy

If you are in in the stock market or at least you learn about corporate finance, investing in that area require you to calculate intrinsic value of an instrument.

Based on my experience as MBA graduate and Strategic consultant, usually we use 3 methods

P/E ratio, Discounted Cashflow, and EV/EBITDA. You can read all of those methods in the link bellow:
investopedia.com/terms/p/price-…

investopedia.com/terms/e/ev-ebi…

investopedia.com/terms/d/dcf.asp

So I was meditating, what kind of approach we can use in the NFT space, since:

1. Majority of NFT projects have no revenue generation yet
2. Majority of NFT project get their income through minting & royalty fee

However I found it finally.

#NFT #NFTCommunity #NFTdrop

Several days ago I was having conversation with one of my friends @yanzero_ I think his MBTI is INTJ.

Smart quite guy, with deep understanding of web 3 space.

Within that conversation, I found 1 method to calculate intrinsic value per NFT.

Disclaimer!

Quantifying an NFT is not a firm method yet!
Also you need to consider a qualitative variables as well.

Of course we cannot calculate the value of an NFT based on Earning, cashflow, or balance sheet.

But we can calculate based on 1 thing.

Treasury

If you read until this section, what do you know abt treasury, please comment bellow. Help me for engagement 😁

Just imagine treasury is a safe box which filled with money from minting and royalty or an amount of money developer put in for NFT project, before minting day.

Based on this variable we can calculate an NFT value based on project assets.

Let's go deeper with an example.

My friend @yanzero_ made this excel sheet of mutant cat, @doodles , and @Imaginary_Ones treasury.

We can see several variables there:
Jumlah NFT = Numbers of NFTs in Bahasa Indonesia.

Based on the data. We can calculate amount of treasury per NFT to find out how much price per NFT worth quantitatively.

For example:
Doodle treasury now is $5-6mio or 2.3K ETH
source: etherscan.io/address/0xDcd3…

Doodle has 10.000 collection.

Based on that numbers we can calculate the price per NFT of @doodles which is:

Total Treasury in ETH/total NFT

2.3K eth/10K NFT

0.23 eth/NFT

So Doodle is overvalue?

Be, patience my friend.

Let's walk to the second example Mutant Cat:

Total treasury of mutant cat is $5mio or 1.8K Eth
Source: gnosis-safe.io/app/eth:0xb25a…

Shoutout to @yanzero_ for finding the treasury link.

Let's calculate:

1.8K eth / 10K collection

0.18 eth per NFT.

Current floor price is 0.275

Let's focus on MutantCat

The table was made in 30/04/2022
Mutant Cat floor price was 0.164

At that time we can say MutantCat is undervalue. Coz the total treasury per NFT exceeding floor price.

Yet Now you can see the floor price of mutant cat is 0.275.

Based on this example, calculating the amount of treasury/NFT can be one of methods we should consider.

However, in NFT space we cannot rely only with this. We should also consider other factors.

Such as:
✅ Team
✅ Roadmap
✅ Potential development
✅ Community

Also one of the main problem is, not all of NFT projects are transparent with their treasury DAO.

It's hard to calculate if we don't have the data source.

That's why this is not a financial advice. Too many things to explore in NFT space.

So if you read until this section and you get value from my thread, kindly please vote bellow and retweet.

Also shoutout to my friend @yanzero_ with his project @ArcXArcNFT who had been so nice to enlight me with this braingasm things.

Hasta de luego my friend