A Detailed Guide to Understanding NFT Floor Price 

The NFT floor price involves a metric evaluates the lowest NFT price in a collection. It is primarily an excellent starting point for understanding an NFT collection’s popularity and the value of a token over time.

Some metrics might be considered when assessing a nonfungible token’s (NFT’s) value in a collection. An example is the floor price, typically denominated in cryptocurrencies or stablecoins pegged to the United States dollar.

The number is the minimum price a seller prefers for a nonfungible token in a specific collection. However, the floor prices’ usefulness is slightly more intricate, and manipulation can be done to the metric to boost the collection’s popularity.

NFT Floor Price Explained

According to OpenSea, the floor price is the ‘lowest price for collection items, instead of the price of the average item.’ The metric is updated in real-time as sales of NFTs in a collection roll in.

Floor price calculation does not incorporate Dutch actions, where an NFT’s price is brought down until someone is ready to purchase it. Often, the floor price is a perfect starting point for comprehending an NFT collection’s popularity and perceived value over time.

Collections having a high floor price may have higher popularity, and falls in floor prices may indicate a decrease in a project’s interest. Since the floor price sets a high standard for an NFT’s value within a collection, most NFTs with sporadic traits will sell for more than the floor price.

The discrepancy shows an inherent element of NFTs. Despite being part of a collection, every digital asset is extraordinary and can sell for different prices based on rare features or traits exclusive to a token.

The term floor price sometimes refers to nonfungible tokens classified by traits. Hence, a person might claim that a gold ape’s price is higher than that of others. 

It is pretty easy to find a collection’s floor price. On OpenSea, one can click on a collection, which will indicate the floor price information next to the collection’s overall sales volumes and the best offer a purchaser makes.

One can view the project’s floor price over a week on the analytics tab. CryptoSlam ensures easy access to floor prices, while Gem collects floor prices across different platforms.

Reliability of the Floor Price Metric

The floor price determines a specific NFT collection’s lowest asking price. However, it does not mean that collectors are eager to purchase at that price or that an NFT is worth the floor price if purchased.

Information Nansen’s NFT Paradise analytics tool aids in demonstrating this. For instance, the floor price of Tamadoge Common, a nonfungible token unveiled in October 2022, was 200 ETH on October 24. The price meant that the NFT owners were unwilling to give up their NFTs for less than 200 ETH.

The trading volume was 12 ETH then, meaning no buyer could match the floor price. As of December 2022, the collection had a total sales volume of nearly 22 ETH ($311500), while the floor price was approximately 0.2 ETH (almost $240). 

Identifying the Party That Sets the Floor Price

Considering that floor prices can only be set by persons holding nonfungible tokens in a collection is critical. Persons who put the floor prices are not essentially reliable mediators of value. Undeniably, they might be seeking to trick buyers.

Those holding nonfungible tokens might partner to temporarily increase a collection’s floor price by declining to sell anything less than a set price. For instance, if a person planned with a specific NFT collection’s holders not to sell their nonfungible token below 100 ETH, the floor price could be deceiving.

Final Thoughts

Another associated term is ‘sweeping the floor,’ which entails buying several NFTs in a collection at its floor price. If a buyer sweeps the floor, it might indicate the project is attaining momentum, although it might also indicate efforts by an entity to alter the floor price.