NFT evaluation seven steps: market value, trading volume, floor price, etc.
Original title: "Original title: "》
A must-have book for NFT investors! These 7 indicators should be fully utilized
By: Spencer Noon, Variant Fund
Co-Founder Compilation: Kyle
Spencer Noon, co-founder of Variant Fund, recently tweeted 7 indicators that NFT investors can use to evaluate projects. Noon explains the purpose of each metric, why it was chosen, and the tools website to get them.
1. Estimated market capitalization
Calculation method: 7-day average price * total supply
Reason for choosing this metric: Compared to fungible tokens, the NFT market is generally less liquid and transfers are much slower. This metric is useful because it removes outdated input data (eg: early cypherpunk sales)@raritytools
Recommended tools:
2. Diamond hand balance
Note: Diamond fingers represent those who are not afraid of market fluctuations and hold positions until the target
How the balance is calculated: the total amount of NFT belonging to addresses that have never sold any NFT of a given collectible
Purpose: Useful metric for identifying projects with real long-term believers@nansen_ai
Recommended tools:
3. Sole holder
Purpose: Helps understand the size of the project community
https://dune.xyz/danner_eth/NFT-Comparison
Recommended Tool: Use the @drakedanner Dashboard on Dune Analytics
4. Transaction volume
Purpose: To understand the basic but important indicators of the overall market demand of the project
Important note: The indicator should not be used alone as it can be exploited by whales. Works with unique addresses (above)@opensea
Recommended tools:
5. Rarity Scoring
Why: All things being equal, NFTs with higher rarity scores are generally more valuable than NFTs with lower rarity scores, if you have no aesthetic preference.@raritytools
Recommended tools:
6. Floor price
Reason: A useful metric to monitor how expensive it is for a user to join an NFT community@fractional_artNOTE: Anyone can also use a similar application (such as
Recommended tools:@Zeneca_33ofof
Google Sheets
7. Eligibility Assignment
Purpose: Show how NFT ownership is distributed over time
Why: Knowing which NFT projects have a long-term community focus is a useful indicator.@nansen_ai


