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9 NFT terms every art collector should know | Pro Club Bd

art market

Mike Marble

My love affair with NFTs began at the same time as I read linguist Amanda Montell’s book Cult: The language of fantatism. Her book talks about how words, particularly neologisms, can be used for cult purposes: at best, they can promote community; at worst, they can be used for brainwashing. “Oh my god,” I thought as I saw the flood of NFT acronyms (LFG, WAGMI, GM) and context-specific phrases (degen, probably nothing, diamond hands) flooding my Twitter feed. “Am I in a cult?”

But being in a cult, Montell notes, isn’t necessarily a bad thing. Certain types of cults, she argues, form the social fabric of our lives, whether it be a 12-step program, barre courses, or the traditional art world—affiliations all rooted in their own shared language. Below are 10 NFT market terms that are more solid and less trendy than the Twitter slang mentioned above. They will serve any collector well as they explore the dynamic – and, yes, sometimes iconic – world of NFTs.

1:1

Pronounced “one of one” and sometimes written as 1/1, a 1:1 is an NFT issued as a single, unique edition. This property is written into the work’s code and is immutable once added to the blockchain. 1:1s are the NFT equivalent of a painting. They are usually owned by a single person and are a format often reserved for works of ‘fine art’. Placing a 1:1 with a reputable collector, institution or fund in the NFT world is just as important as it is for works in the traditional art world.

The two most expensive NFT sales to date, Beeple’s Everyday life: The first 5000 days (a mosaic of 5,000 digital drawings sold at Christie’s in 2021 for $69.3 million) and Julian Assange and Pak’s watch (a clock showing the number of days Assange has served in prison that sold for $52.7 million in 2022) are both 1:1.

air drop

Airdrops are free NFTs sent to the web3 wallets of NFT collector holders (defined below). Airdropped NFTs are less valuable than the original NFT collectible, although they can still be very valuable. The collectible Bored Ape Yacht Club has air-dropped a derivative of the original NFT called the Mutant Ape Yacht Club to all 10,000 of its owners, and collectors have paid up to $835,000 for a single one. However, that’s still far less than the best-selling Bored Ape, which sold for over $3.5 million.

Sometimes airdrops feature work by emerging artists to give them exposure. In other cases, they may be Valentine’s Day or holiday cards drawn by the collectible’s original artist. Many airdrops are on layer 2 blockchains like Polygon (Etherium is a layer 1) as transaction costs are much cheaper on these chains. Artists who make 1:1, short runs, or generative art (defined below) are generally not expected to provide airdrops to their collectors.

alpha

Although the term originated in finance – where it is used to compare portfolio returns relative to a market index – the meaning in the NFT space is more “intel”. Alpha is information given to or received from a select group of individuals in front of the majority of the NFT market. Speculative collectors sometimes form alpha groups that share information about an artist or collectible that could affect its value. While this may seem awkward, Alpha can also be less nefarious. For example, as a reward for their support, an artist could share details about future drops, partnerships, or exhibitions with their most loyal patrons.

burn/burn

Burning is the equivalent of deleting your NFT. Of course, since everything on the blockchain is meant to be permanent and immutable, you can’t actually delete an NFT. So burning, where a collector transfers their NFT to a nonexistent wallet, is the next best thing. Many NFT platforms have a burning feature should it ever be needed. Sometimes an artist will give you a wallet address to send your NFT to and will take care of the firing themselves.

Firing is usually done to reduce an artist’s supply and increase their demand and therefore the price their work commands. Artists can also make firing a playful aspect of collecting their art. For example, a collector may need to purchase three artist NFTs and then burn them all to obtain a higher-quality artist NFT.

Collectible or PFP

Collectibles are large NFT collections, typically numbering 10,000. They are also called PFPs (short for “profile picture”) because their owners often use their collectible item as their profile picture on social media (usually Twitter). Each NFT in a collectible is a unique variation on a single figure. The figures have different features (laser beam eyes, irises, green mohawks, etc.) with different rarities. Some features will be extremely rare – for example, only eight of the 10,000 CryptoPunks have caps – others less. Despite their massive circulations, collectibles are many of the best-selling NFTs in the space. Seven of the top 10 NFT sales are CryptoPunks, which originally had 10,000 collectibles, the most expensive of which sold for $23.7 million.

Collectibles differ from art NFTs in that they often double as membership cards, granting their holders access to special websites, opportunities, parties, or future NFT drops. This aspect of an NFT is called utility. Other forms of utility include licensing rights to an owner’s individual NFT and the ability to vote on community decisions, e.g. B. what art is being bought for a collectors fund or what non-profit organization it is giving money to.

Collectibles are typically run by a team of people as opposed to a single artist. Successful collectibles like Doodles, Bored Ape Yacht Club, CryptoPunks, Cool Cats or World of Women often become big global brands. Yuga Labs, the creator of the Bored Ape Yacht Club, is a company that manages and produces collectibles – and the success of the Bored Ape Yacht Club actually allowed them to acquire other collectibles (CryptoPunks and Meebits) from Larva Labs, their main competitor.

Generative Art

Generative art refers to NFTs created using a random algorithm or AI. Predetermined rarities are often built into the algorithm so that certain features are more or less likely to appear than others. Generative art can take the form of moving or dynamic 1:1 images, or large editions of hundreds or thousands of still image permutations. Collectibles like CryptoPunks or Bored Ape Yacht Club are technically generative as they are created using a random algorithm. However, they are not usually labeled as generative art because their usefulness keeps people from seeing them as pure “art”.

ix.shells and Sofia Crespo are known for generative 1:1 art. The ArtBlocks platform is known for its generative art editions and works with artists such as Tyler Hobbs, Dmitri Chernick and Jen Stark, among others. The size of these issues is usually between 200 and 2,000. Ringtones #109 from Chernick’s generative art collection on ArtBlocks sold for $7.1 million, making it the 11th most expensive NFT.

mint

Minting adds an artwork to the blockchain, making it officially an NFT. Artists creating 1:1 or small collections often stamp their own work and assume all associated fees. However, when it comes to issues in the hundreds or thousands, it is usually prohibitive for the creator to mint all of their own NFTs. This also applies to open editions, which do not have a predetermined size limit but typically limit embossing to between 24 and 72 hours. In these cases, the buyers bear the embossing fees.

Embossing is particularly exciting when it comes to generative art editions or PFPs, since the buyer doesn’t know what permutation they’re getting when embossing. It’s similar to buying a pack of Pokémon cards; Inside you may find a very rare first edition Charizard, but you won’t know until you unwrap it.

metadata

Metadata is the key data that describes an NFT. For many works, this is simply the artist’s name along with the title, date, and description of the work. However, for collectibles and some generative art, metadata is very important as it contains the characteristics of the NFT along with its rarity. Most collectibles have no more than 12 properties listed in their metadata. Bored Ape Yacht Club and CrytoPunks have no more than seven traits per NFT. CryptoPunk #2624has Cigarette (10%), Earring (25%), Wild White Hair (1%), and Female (38%). Metadata is easily viewable on platforms like OpenSea and, for collectibles, is as important to the NFT and its value as the image itself.

wipe the floor

Floor sweeping is the act of buying all of the NFTs in a collection for the reserve price. The reserve price is the lowest price an NFT can buy in a collection. Minimum prices are determined by two main factors: the state of the crypto market and the dynamics of an artist or collection. The former causes the minimum prices to fluctuate quite wildly. It’s not uncommon for a reserve price to double over the course of a month or two and then fall back to or below its original price. On OpenSea, the reserve price is displayed at the top of the page next to the total volume, the number of NFTs in the collection and the number of current owners.

Floor sweeping is done by both collectors and the creators of a collection. Collectors sometimes have alerts letting them know when a reserve price has fallen below a certain threshold, as well as sniper bots sweeping the floor at that price. When creators sweep their own floors, it’s usually a form of market manipulation to inflate the overall value of their collection.

Mike Marble

Mieke Marple is an artist based in Los Angeles

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