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How is the value of NFTs determined?

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Understanding the Titration Matrix

There is no set of rules on how to determine the value of an NFT. The metrics you use to value private companies or traditional investment vehicles like stocks simply don’t apply to NFTs. Usually, the payment made by the last buyer gives some indication of the value. However, it is difficult for NFTs to guess how much the next buyer might pay based on their estimates.

Most buyers lack the skills to logically determine the value of NFTs and base their quotes on guesswork. It is also difficult for merchants to determine what they can end up getting for the tokens they hold. Over time, the value of NFTs depends on perceptions that neither buyers nor sellers can control.

An example might better illustrate you. An NFT artwork may be in high demand for a period of time and potential buyers consider it rare and hope for value in the near future. Then, all of a sudden, they may find that the digital image is available online for free, and there may be no buyers left for the NFT.

Factors Determining the Value of NFTs

NFTs of works of art by…

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