9 NFT Terms Every Art Collector Should Know

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Art Mar­ket

Mieke Marple

My love affair with NFTs began at the same time I was read­ing lin­guist Aman­da Montell’s Cultish: The Lan­guage of Fan­tatism. Her book talks about how words, espe­cial­ly neol­o­gisms, can be used towards cultish ends: At best, they can fos­ter com­mu­ni­ty; at worst, they can be used to brain­wash. “Oh my god,” I thought, see­ing the bar­rage of NFT acronyms (LFG, WAGMI, GM) and con­text-spe­cif­ic phras­es (degen, prob­a­bly noth­ing, dia­mond hands) on my Twit­ter feed. “Am I in a cult?” 

But being in a cult, Mon­tell notes, is not nec­es­sar­i­ly a bad thing. Cer­tain kinds of cults, she argues, form the social fab­ric of our lives, be it a 12-step pro­gram, Barre class­es, 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 afore­men­tioned Twit­ter slang. They will serve any col­lec­tor well as they explore the dynamic—and, yes, some­times cultish—world of NFTs.

1:1

Pro­nounced “one of one” and some­times writ­ten as 1/1, a 1:1 is an NFT that has been 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 “high art.” Plac­ing a 1:1 with a notable col­lec­tor, insti­tu­tion, or fund in the NFT world is as impor­tant as it is with works in the tra­di­tion­al art world. 

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

Airdrop

Air­drops are free NFTs sent to the web3 wal­lets of NFT col­lectible (def­i­n­i­tion below) hold­ers. Air­dropped NFTs are less valu­able than the orig­i­nal NFT col­lectible, though they can still be quite valu­able. The col­lectible Bored Ape Yacht Club air­dropped a deriv­a­tive of the orig­i­nal NFT called Mutant Ape Yacht Club to all 10,000 of its hold­ers, and col­lec­tors have paid up to $835,000 for a sin­gle one. That, how­ev­er, is still far less than the high­est sell­ing Bored Ape, which sold for over $3.5 million. 

Some­times air­drops fea­ture work by emerg­ing artists as a way for them to gain expo­sure. Oth­er times they might 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) since trans­ac­tion costs on those chains are much cheap­er. Artists who make 1:1s, small edi­tions, or gen­er­a­tive art (def­i­n­i­tion below) gen­er­al­ly aren’t expect­ed to pro­vide air­drops to their collectors. 

Alpha

Though the term comes from finance—where it is used to com­pare port­fo­lio returns in rela­tion to a mar­ket index—in the NFT space, the mean­ing is clos­er to “intel.” Alpha is infor­ma­tion giv­en to or obtained by a select group of peo­ple ahead of the major­i­ty of the NFT mar­ket. Spec­u­la­tive col­lec­tors some­times form alpha groups, trad­ing infor­ma­tion about an artist or col­lectible that might affect its val­ue. While this might seem unto­ward, alpha can also be less nefar­i­ous. For exam­ple, an artist might share details on future drops, part­ner­ships, or exhi­bi­tions with their most loy­al patrons as a reward for their support. 

Burn/Burning

Burn­ing is the equiv­a­lent of delet­ing your NFT. Of course, because every­thing on the blockchain is meant to be per­ma­nent and unal­ter­able, you can’t actu­al­ly delete an NFT. So burn­ing, in which a col­lec­tor trans­fers their NFT to a nonex­is­tent wal­let, is the next best thing. Many NFT plat­forms have a burn func­tion, should it ever be required. Some­times an artist will give you a wal­let address to send your NFT to and will han­dle the burn­ing themselves. 

Burn­ing is usu­al­ly done to reduce an artist’s sup­ply and increase their demand and, by exten­sion, the price their work com­mands. Artists can also make burn­ing a gam­i­fied aspect of col­lect­ing their art. For exam­ple, a col­lec­tor might need to acquire three NFTs by an artist, then burn them all, to obtain a high­er-val­ue NFT by the artist.

Collectible or PFP 

Col­lectibles are large NFT col­lec­tions, com­mon­ly 10,000 in size. They are also called PFPs (short for “pro­file pic­ture”) because their own­ers often use their col­lectible as their pro­file pic­ture on social media (usu­al­ly Twit­ter). Each NFT in a col­lectible is a unique vari­a­tion of a sin­gle fig­ure. Fig­ures will have dif­fer­ent traits (laser-beam eyes, rain­bow skin, green mohawks, etc.) with dif­fer­ing rar­i­ties. Some fea­tures will be extreme­ly rare—for exam­ple, only eight of the 10,000 Cryp­toP­unks have beanies—others, less so. Despite their huge edi­tion sizes, col­lectibles are many of the top sell­ing NFTs in the space. Sev­en of 10 high­est-priced NFT sales are Cryp­toP­unks, the orig­i­nal 10,000 col­lectible, the most expen­sive of which sold for $23.7 million.

Col­lectibles dif­fer from fine 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 its util­i­ty. Oth­er forms of util­i­ty include licens­ing rights to a holder’s indi­vid­ual NFT and the abil­i­ty to vote on com­mu­ni­ty deci­sions, such as what art is bought for a collectible’s fund or what non­prof­it it gives mon­ey to.

Col­lectibles are usu­al­ly run by a team of peo­ple as opposed to a sin­gle artist. Suc­cess­ful col­lectibles, such as Doo­dles, Bored Ape Yacht Club, Cryp­toP­unks, Cool Cats, or World of Women, often go on to become big glob­al brands. Yuga Labs, the cre­ator of Bored Ape Yacht Club, is a com­pa­ny that man­ages and pro­duces collectibles—and the suc­cess of 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 ran­dom­iz­ing algo­rithm or AI. Pre­de­ter­mined rar­i­ties are often built into the algo­rithm so that cer­tain fea­tures are more or less like­ly to show up than oth­ers. Gen­er­a­tive art can take the form of mov­ing or dynam­ic 1:1s or large edi­tions of hun­dreds or thou­sands of still-image per­mu­ta­tions. Col­lectibles, such as Cryp­toP­unks or Bored Ape Yacht Club, are tech­ni­cal­ly gen­er­a­tive since they are made with a ran­dom­iz­ing algo­rithm. How­ev­er, they are not usu­al­ly referred to as gen­er­a­tive art since their util­i­ty pre­vents peo­ple from see­ing them as pure­ly “art.”

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

Mint

Mint­ing is adding an art­work to the blockchain, by which it offi­cial­ly becomes an NFT. Artists mak­ing 1:1s or small col­lec­tions will often mint their own work, cov­er­ing any asso­ci­at­ed fees. How­ev­er, when it comes to edi­tions in the hun­dreds or thou­sands, it is usu­al­ly cost pro­hib­i­tive for the cre­ator to mint all their own NFTs. This is also true for open edi­tions, which have no pre­de­ter­mined size lim­it but usu­al­ly cap mint­ing to a peri­od of 24–72 hours. In these cas­es, the buy­ers will cov­er the mint­ing fees. 

Mint­ing is espe­cial­ly excit­ing when it comes to gen­er­a­tive art edi­tions or PFPs because the buy­er doesn’t know what per­mu­ta­tion they will get when they mint. It’s akin to buy­ing a pack of Poké­mon cards; inside might be 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 work’s title, date, and descrip­tion. How­ev­er, for col­lectibles and some gen­er­a­tive art, meta­da­ta is very impor­tant because it includes the NFT’s traits along with their rar­i­ty. Most col­lectibles won’t have more than 12 traits list­ed in their meta­da­ta. Bored Ape Yacht Club and Cry­toP­unks have no more than sev­en traits per NFT. Cryp­toP­unk #2624, for exam­ple, has “Cig­a­rette” (10%), “Ear­ring” (25%), “Wild White Hair” (1%), and “Female” (38%). Meta­da­ta is eas­i­ly view­able on plat­forms like OpenSea and, for col­lectibles, is as essen­tial to the NFT and its val­ue as the image itself.

Sweeping the floor

Sweep­ing the floor is the act of buy­ing all the floor-price NFTs in a col­lec­tion. Floor price is the low­est price an NFT in a col­lec­tion can be bought. Floor prices are deter­mined by two main fac­tors: the state of the cryp­to mar­ket and an artist’s or collection’s momen­tum. The for­mer caus­es floor prices to oscil­late pret­ty wild­ly. It is not uncom­mon for a floor price to dou­ble over the course of a month or two, and then drop back to its orig­i­nal price or low­er. On OpenSea, floor price is post­ed at the top of the page, along­side total vol­ume, num­ber of NFTs in the col­lec­tion, and num­ber of cur­rent owners. 

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

Mieke Marple

Mieke Marple is an artist based in Los Angeles

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