❓Have you ever thought about pricing NFT?
❓Is NFT-Fi valid after activating the liquidity of NFT?
❓How can we make it universally accepted?
To tackle these, let's dive into #IOSG Newsletter on The Alchemy of NFT: Pricing 101
🧵
@BigFoxKo
medium.com/iosg-ventures/…
❓Is NFT-Fi valid after activating the liquidity of NFT?
❓How can we make it universally accepted?
To tackle these, let's dive into #IOSG Newsletter on The Alchemy of NFT: Pricing 101
🧵
@BigFoxKo
medium.com/iosg-ventures/…
(1/8)TL;DR
The difficulties to price NFT
1. The endogenous subjectivity and illiquidity of NFT.
2. The rarity of NFT is relatively ambiguous Besides, the rarity and price levels are not in a completely positive correlation.
3. Dramatically volatile NFT prices.
The difficulties to price NFT
1. The endogenous subjectivity and illiquidity of NFT.
2. The rarity of NFT is relatively ambiguous Besides, the rarity and price levels are not in a completely positive correlation.
3. Dramatically volatile NFT prices.
(2/8)
Higher level issues:
1.Lack of sufficient liquidity to support the depth of trading pool
2. Difficulty in structuring diversified financial derivatives in the form of NFTs.
Higher level issues:
1.Lack of sufficient liquidity to support the depth of trading pool
2. Difficulty in structuring diversified financial derivatives in the form of NFTs.
(3/8)
Two categories of pricing solutions:
Peer Appraisal: which can be subdivided into (a) Crowds and (b) Spots
Oracle Appraisal: which can be subdivided into (c) TWAP and (d) off-chain computation
Two categories of pricing solutions:
Peer Appraisal: which can be subdivided into (a) Crowds and (b) Spots
Oracle Appraisal: which can be subdivided into (c) TWAP and (d) off-chain computation
(4/8)
(a) Crowds
Crowds appraisal is a form of pricing that is currently more subjective. The liquidity lending protocol can whitelist and price NFT in the form of subjective assessment and voting decision by combining the interests of DAO with those of lenders.
(a) Crowds
Crowds appraisal is a form of pricing that is currently more subjective. The liquidity lending protocol can whitelist and price NFT in the form of subjective assessment and voting decision by combining the interests of DAO with those of lenders.
(5/8)
(b) Spots
Similar to DeFi, the pricing mechanism of the liquidity pool works mainly through an optimistic pledge certificate mechanism, i.e., its own expectations of the price.
(b) Spots
Similar to DeFi, the pricing mechanism of the liquidity pool works mainly through an optimistic pledge certificate mechanism, i.e., its own expectations of the price.
(6/8)
(c)TWAP
A typical way for an oracle to evaluate the pricing of NFT is based on a simple traditional algorithmic trading strategy in which a weighted average of the NFT sales price and the floor price is calculated to obtain a TWAP (Time Weighted Average Price).
(c)TWAP
A typical way for an oracle to evaluate the pricing of NFT is based on a simple traditional algorithmic trading strategy in which a weighted average of the NFT sales price and the floor price is calculated to obtain a TWAP (Time Weighted Average Price).
(7/8)
(d) Off-chain computation
Due to the non-fungibility of NFT, its main attribute classification, rare features, historical sales data and other valuable information can be used as model indicators through metadata decomposition.
(d) Off-chain computation
Due to the non-fungibility of NFT, its main attribute classification, rare features, historical sales data and other valuable information can be used as model indicators through metadata decomposition.
(8/8)
We believe that with the advancement of technology and the participation of more high-quality project parties, more AI algorithm technologies can be put into the fitting evaluation function, so that the pricing decision tree can be pruned more accurately and quickly.
We believe that with the advancement of technology and the participation of more high-quality project parties, more AI algorithm technologies can be put into the fitting evaluation function, so that the pricing decision tree can be pruned more accurately and quickly.
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