What Determines the Price of NFTs?
Vivian Ziemke Benjamin Estermann Roger Wattenhofer Ye Wang
In the evolving landscape of digital art, Non-Fungible Tokens (NFTs) have
emerged as a groundbreaking platform, bridging the realms of art and
technology. NFTs serve as the foundational framework that has revolutionized
the market for digital art, enabling artists to showcase and monetize their
creations in unprecedented ways. NFTs combine metadata stored on the blockchain
with off-chain data, such as images, to create a novel form of digital
ownership. It is not fully understood how these factors come together to
determine NFT prices. In this study, we analyze both on-chain and off-chain
data of NFT collections trading on OpenSea to understand what influences NFT
pricing. Our results show that while text and image data of the NFTs can be
used to explain price variations within collections, the extracted features do
not generalize to new, unseen collections. Furthermore, we find that an NFT
collection's trading volume often relates to its online presence, like social
media followers and website traffic.