9 NFT Terms Every Art Collector Should Know
My love affair with NFTs began while I was reading linguist Amanda Montell’s book Cultish: the language of fantasy. His book explains how words, especially neologisms, can be used for sectarian purposes: at best, they can foster community; at worst, they can be used for brainwashing. “Oh my god,” I thought as I saw the barrage of NFT acronyms (LFG, WAGMI, GM) and context-specific expressions (degen, probably nothing, diamond hands) on my Twitter feed. “Am I in a cult?
But being in a cult, Montell notes, isn’t necessarily a bad thing. Certain types of worship, she argues, form the social fabric of our lives, whether it’s a 12-step program, Barre classes, or the traditional art world — affiliations all rooted in their own common language. Below are 10 NFT market terms that are stronger and less fashionable than the aforementioned Twitter slang. They will serve any collector well as they explore the dynamic – and, yes, sometimes cult – world of NFTs.
Pronounced “one on one” and sometimes spelled 1/1, a 1:1 is an NFT that has been released in a single, unique edition. This property is written in the code of the work and is immutable once added to the blockchain. 1:1s are the NFT equivalent of a painting. They are usually owned by one person and are a format often reserved for “high art” works. 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 mainstream art world.
The two most expensive NFT sales to date, Beeple’s Daily: first 5,000 days (a mosaic of 5,000 digital designs that sold at Christie’s for $69.3 million in 2021) and Julian Assange and Pak’s The clock (a clock that represents the number of days Assange has been in jail and has sold for $52.7 million in 2022), are both 1:1.
Airdrops are free NFTs sent to the web3 wallets of collectible NFT holders (definition below). Air-dropped NFTs are less valuable than the original NFT collectible, although they can still be very valuable. The Collectible Bored Ape Yacht Club dropped a derivative of the original NFT called Mutant Ape Yacht Club to its 10,000 holders, and collectors paid up to $835,000 for just one. This, however, is still far below the best-selling Bored Ape, which sold for over $3.5 million.
Sometimes airdrops feature works by up-and-coming artists as a way for them to gain exposure. Other times it may be Valentine’s Day or holiday cards drawn by the original artist of the collectible. Many airdrops are on layer 2 blockchains like Polygon (Etherium is layer 1) because transaction costs on these chains are much cheaper. Artists who do 1:1, small edits, or generative art (definition below) are generally not expected to provide airdrops to their collectors.
Although the term originates from finance – where it is used to compare portfolio returns against a market index – in the NFT space the meaning is closer to “intel”. Alpha is information given or obtained by a select group of people before the majority of the NFT market. Speculative collectors sometimes form alpha groups, exchanging information about an artist or collectible that could affect its value. Although it may seem unfortunate, alpha can also be less harmful. For example, an artist may share details of future releases, partnerships, or exhibitions with their most loyal patrons as a reward for their support.
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 non-existent wallet, is the next best thing. Many NFT platforms have a burning feature, should that ever become necessary. Sometimes an artist will give you a wallet address to send your NFT to and do the engraving themselves.
Etching is usually done to reduce an artist’s supply and increase their demand and, by extension, the price of their work. Artists can also make engraving a fun aspect of collecting their art. For example, a collector may need to acquire three NFTs by an artist and then burn them all, to obtain a higher value NFT by the artist.
Collection or PFP
Collectibles are large NFT collections, usually 10,000. They are also called PFP (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 different rarities. Some features will be extremely rare – for example, only eight of the 10,000 CryptoPunks have beanies – others less. Despite their massive edition sizes, collectibles are some of the best-selling NFTs in the space. Seven of the 10 most expensive NFT sales are CryptoPunks, the original 10,000 collectibles, the most expensive of which sold for $23.7 million.
Collectibles differ from art NFTs in that they often serve as membership cards, granting their holders access to special websites, opportunities, parties, or future NFT drops . This aspect of an NFT is called its usefulness. Other forms of utility include licensing rights to a licensee’s individual NFT and the ability to vote on community decisions, such as art purchased for a collection fund or nonprofit association. profit to which he gives money.
Collectibles are usually managed by a team of people rather than a single artist. Successful collectibles, such as Doodles, Bored Ape Yacht Club, CryptoPunks, Cool Cats or World of Women, often 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 has actually allowed them to acquire other collectibles (CryptoPunks and Meebits) from Larva Labs, their main competitor.
Generative art refers to NFTs created using a randomization or AI algorithm. Pre-determined rarities are often built into the algorithm so that certain traits are more or less likely to appear than others. Generative art can take the form of moving or dynamic 1:1s or large edits of hundreds or thousands of permutations of still images. Collectibles, such as CryptoPunks or Bored Ape Yacht Club, are technically generative since they are crafted with a randomization algorithm. However, they don’t usually qualify as generative art because their usefulness prevents people from thinking of them as purely “art”.
ix.shells and Sofia Crespo are well known for doing 1:1 generative art. The ArtBlocks platform is renowned for its generative art editions, partnering with artists such as Tyler Hobbs, Dmitri Cherniak, and Jen Stark, among others. The size of these editions tends to be between 200 and 2,000. Ringtones #109 from Cherniak’s generative art collection on ArtBlocks sold for $7.1 million, making it the 11th most expensive NFT.
Minting adds a work of art to the blockchain, by which it officially becomes an NFT. Artists doing 1:1s or small collections often mint their own work, covering all associated costs. However, when it comes to edits in the hundreds or thousands, the cost is usually prohibitive for the creator to create all of their own NFTs. This is also true for open editions, which have no predetermined size limit but generally limit typing to a 24-72 hour period. In these cases, buyers will cover the minting costs.
Typing is especially exciting when it comes to Generative Art Editions or PFPs, because the buyer doesn’t know what permutation they’ll get when they hit. It’s like buying a pack of Pokémon cards; inside could be a very rare first edition Charizard, but you won’t know until you unbox it.
Metadata is the key data that describes an NFT. For many works, this is simply the name of the artist along with the title, date and description of the work. However, for collectibles and some generative arts, metadata is very important as it includes the traits of the NFT as well as their rarity. Most collectibles will have no 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 “Woman” (38%). Metadata is readily visible on platforms like OpenSea and, for collectibles, is as essential to the NFT and its value as the image itself.
Sweep the floor
Sweeping the floor consists of buying all floor-priced NFTs in a collection. The floor price is the lowest price an NFT in a collection can be purchased. Floor prices are determined by two main factors: the state of the crypto market and the momentum of an artist or collection. The first causes floor prices to swing quite wildly. It is not uncommon for a floor price to double over the course of a month or two and then return to its original price or lower. On OpenSea, the floor price is displayed at the top of the page, alongside 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 creator(s) of a collection. Collectors will sometimes have alerts that tell them when a floor price has fallen below a certain threshold, as well as sniper bots sweeping the floor at that price. When designers sweep their own floors, it is usually a form of market manipulation, intended to inflate the overall value of their collection.
Mieke Marple is an artist based in Los Angeles.