Animation, music and insider information: Here's what makes some NFT drops more successful than others, according to a new study |  Artnet news

Animation, music and insider information: Here’s what makes some NFT drops more successful than others, according to a new study | Artnet news – Mail Bonus


Have you ever wondered what makes a successful NFT function? Is it a sale? Celebrity? Breathtaking disagreement? You are definitely not alone.

A team of researchers from Temple University and the University of Chicago tried to isolate what separates a successful reduction from a failed fall, by looking at a wide range of factors, from floor value to volume, for a study published in February.

The researchers divided 300,000 NFT wallets into two separate groups, experienced traders and new ones, using publicly available information from OpenSea, the world’s largest NFT marketplace, which offers popular museums such as CryptoPunks and Bored Ape Yacht Club.

Three authors of the study analyzed data from 692 individual NFT libraries to determine characteristics that affect price growth in both the primary and secondary markets.

It may come as no surprise that they found that experienced investors earned an average of 10 percent more per trade, as “museums with more participant investor experience are more likely to strike out, strike out faster and experience higher currency growth. “

To explain this, the research narrowed down specific factors related to the performance of individual NFTs. Do they have a roadmap (set of clear goals and milestones)? Website? Are the founders on Twitter? Disagreement?

They found that roadmap projects were 8.5 per cent less likely to sell out, despite the fact that after seven days they had risen by an average of 9.8 per cent from the original coin price. After 28 days, NFTs with advertised road maps fell by an average of 5 percent from the original currency price, probably due to what scientists thought was declining, as well as too promising and too low.

The report also found that derivative NFTs, projects that use the creative assets and intellectual property of existing NFTs, were also much less likely to be successful. They found that NFT derivatives fell by an average of 65.8 percent from coin prices after 28 days. The only notable exception, according to the report, were derivative NFTs based on the Bored Ape Yacht Club series, which rose by 1,256 percent in the 28 days after slaughter.

Perhaps most surprisingly, the researchers came to the conclusion that 3D art did not equate to any significant financial success in individual NFTs. They found that 3D art galleries were on average 2.2 percent more likely to sell out, but after 28 days they were down 23 percent from the original coin price.

On the other hand, the study found that NFTs containing videos and music were much more likely to be successful. Animation projects were on average 5.3 percent more likely to strike out, while music-containing projects were 7.7 percent more likely to sell out. Animation projects increased by an average of 38 percent 28 days after coinage, while those containing music increased by an average of 71.5 percent.

When it comes to social media, the report found that museums promoting the Twitter profiles of their founders were 6.1 percent more likely to sell out, rising an average of 72.2 percent in the 28 days after minting.

Traders with more experience also received 43.5 percent higher returns when shopping with the same portfolio as those with less experience, the study said, along with an average 39.5 percent higher return when shopping with the exact same NFT.

Researchers speculate that this is likely because experienced traders hold NFTs for a much shorter period of time: “Experienced investors tend to sell successful NFTs, while inexperienced investors tend to hold on to them,” the study said. Found.

Overall, the results suggest that NFT markets are characterized by high information inefficiencies, “the report concludes,” enabling investors with information options to systematically generate profits. “

One caveat is that the study was published in February, when the NFT market was at its peak. In January, NFT sales amounted to 4.5 billion dollars, jbelow the historical peak of the market, 4.9 billion dollars, set inn August 2021. Since then, the market has been in free fall as floor prices have fallen sharply and the main NFT collection has shed considerable weight.

This means that when times are good, those who have access to information, data and can follow the patterns of experienced NFT traders are much more likely to succeed in buying and selling unchangeable tokens. When are the bad times? Get excited.

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