The valuation of NFT art is still in its infancy and is subjective. There are a wide range of artists with an equally wide range of pricing structures. Add to this the variety of sale mechanisms, such as private sales or non-standard concepts like “hot potato” contracts.
For such reasons, it is difficult to establish a set valuation structure for assessing NFT art designs. There are methods for trying to establish a base cost such as averaging out specific artists average sales per token from their initial sales and developing this into secondary sales. It is also possible to look to assess the ROI (return on investment) that specific collectors looking to make, when purchasing directly from creators, that they have then sold on.
Some collectors, who are at this stage part of the early innovation process, are tending to concentrate on specific artists. These “power collectors” are stocking up on as many pieces from these creators as possible. This situation adds another dynamic to the overall assessment. Where “power collectors” are building up a rapour with creators, this provides opportunity in purchasing NFTs at lower than market rate price in return for attracting collectors who are purchasing NFTs with significance. Subsequently, this news attracts other collectors and growth is attained.
If one is lucky enough to purchase some NFT art that is desired by a “power collector”, then the opportunity to achieve a successful return on investment in secondary sales is very attractive.
NFT art valuations are unquestionably challenging, however establishing secondary sale figures may provide the benchmark in forming accurate valuations. The understanding and growth of the NFT market is developing all of the time and its undoubtedly going to be an exciting journey!