In this webinar, we will present several advanced analytics and insights that can help you make better decisions while trading NFTs. This analytical approach can aid to value NFTs in a more deterministic way. We will analyze the implied risks and propose some ideas for strategies.

1. A quantitative approach to trading NFTs
November 2021

2. Agenda
● Why trade NFTs?
● NFT activity today
● Unexpected findings
● Advanced analytics
● Thinking of strategies
● Useful links

3. A quick update about ITB

4. New Algorand dedicated analytics
● 50+ unique indicators dedicated to ALGO divided into 7 categories:
○ Financial
○ Network
○ Ownership
○ Exchanges
○ Social
○ Derivatives
○ Capital markets
Source: https://app.intotheblock.com/coin/ALGO/

5. New Customer Launches

6. Currency.com

7. Other notable launches
● CoinQuora
● Blokpres
● Digitalexchange.id

8. Why trade NFTs?
● Not financial advice!

9. Why trade NFTs?
● Beyond profit:
○ Social: communities
○ Emotional attachment
○ Fun
○ Artistic value

10. Why trade NFTs?
● Profitable?
○ High risks → Illiquid markets
■ Small altcoins can be sold
anytime
■ NFTs without buyers can
not be sold
○ High profits (few)

11. NFT activity today
● Search trends on ATH
Source: Google trends

12. NFT activity today
● Ethereum - OpenSea

13. NFT activity today
● Due to increasing fees?
Source: https://app.intotheblock.com/coin/ETH/deep-dive?group=network&chart=feesStats

14. NFT activity today
● Not only on Ethereum, other chains as well
○ Solana
Source: https://dappradar.com/rankings/protocol/solana/category/marketplaces

15. Unexpected findings
● We analyzed:
Number of NFT collections 102
Filtering criteria: demand indicator
>5000 followers on Discord and Twitter
Only on Ethereum.
Marketplaces: OpenSea, Artblocks.
Time Frame of analysis 1 month (October 1 to October 27)

16. Unexpected findings
● Few collections mint completely → offer failing to meet demand
○ Might be impossible to sell a bought NFT from a collection not fully
minted
○ Cause: High prices or high supply
○

17. Unexpected findings
● Even fewer collections are profitable in the short term
○ Analyzing price 2 days after mint

18. Unexpected findings
● Fees play an important role. Evenmore on Ethereum
OpenSea
Selling fees (per piece): 2.5%
Owner Royalties (per collection): Variable
Minting/listing/initialization fees (per
account): Ethereum TX fee
Ethereum
Gas fee of minting (per piece):
Two cases:
1. Minimum $80
2. Maximum $200

19. Unexpected findings
● Each marketplace has a different fee structure
Source: https://nftartexhibition.net/blog/2021/11/02/the-latest-comparison-of-major-nft-marketplaces/

20. Unexpected findings
● Rarity: no standard methodology of calculating it
○ Generally, each web has its own.
● Rankings can vary greatly from one methodology to other.
Source: https://rarity.tools/

21. Unexpected findings
● Measuring demand before minting is hard
○ Social media followers don’t work:
■ Is common for accounts to fake # followers
● Red Flags
● Better cue: organic activity
○ Twitter interactions
○ Discord engagement

22. Unexpected findings
● Successful collections take time to appreciate
○ Cool Cats weekly floor price in USD

23. Unexpected findings
● Unsuccessful collections lose floor price fast (1-2 days)
Source: https://www.thenifty.com/

24. Unexpected findings
● Artblocks is not an ‘easy game’
○ Measuring price 7 days after mint date:

25. Advanced analytics: primary market
● Measuring offer for collections
○ Minting price * Supply = Minting marketcap

26. Advanced analytics: secondary market
● Measuring supply variations in collections:
○ Decreased supply → possibility of price increase / supply shock
Source: https://solanafloor.com/

27. Advanced analytics: secondary market
● Measuring demand in a collection
○ Using volume traded as proxy of demand could be misleading
■ Increased prices → less affordable → less volume
● Bored Apes collection Volume vs Price

28. Advanced analytics: secondary market
● Measuring interest in certain collection
○ Number of offers is:
■ A good indicator of demand -> A leading indicator of floor price

29. Advanced analytics: secondary market
● Quantifying momentum with tx size
○ Loot collection: Reduction of TXs + lack of high size Txs = fading interest

30. Advanced analytics: secondary market
● Spotting mispriced rare pieces:
○ Spotting mispriced listed NFTs according to its rarity rank
■ Rank 1-50 prices increase exponentially
Source: https://solanafloor.com/

31. Advanced analytics: secondary market
● Dutch auctions (Artblocks)
○ Being greedy can end up being more
expensive (gas)
○ Keeping in mind gas prices to avoid
overpaying

32. Thinking strategies
● Understanding risk:
○ Higher risk-Higher return:
recently minted collections
○ Lower risk-Lower return:
renowned collections.
■ Price has been
sustained over time.
Source: https://cryptoslam.io/

33. Thinking strategies
● Primary market
○ Short term = speculation.
○ Higher risks
● Secondary market
○ Long term = appreciation
○ Lower risks

34. Thinking strategies
● Primary market
○ Project discovery
○ Connections
○ Being early and fast
○ Time demanding
○ Taking risks
■ Calculating the approximate rarity
rank before release

35. Thinking strategies
● Secondary market
○ Project roadmap and
deliverables
○ Community growth
○ Social recognition
○ Healthy indicators

36. Thinking strategies
● Secondary market
○ “Fundamental” analysis
○ Example found online
Source: https://www.speicherx.com/

37. Useful links
● Upcoming NFT drops:
○ Filter by chains, social activity+links:
■ https://nextdrop.is, https://nftcalendar.io, https://www.non-fungi.com/
● Rarity ranks:
○ Profile pictures: https://rarity.tools
○ Exclusively Solana: https://howrare.is
○ Artblocks: https://rarity.guide
● NFT analytics:
○ Marketplaces: https://dappradar.com
○ Collections: https://cryptoslam.io/, https://solanafloor.com/
○ Collections floor prices (OpenSea): https://www.thenifty.com

38. Looking to the future
● Exchanges launching NFT marketplaces → Ease the entry barrier of retail to DeFi
○ FTX US -> Recently launched. Soon supporting Ethereum.
○ Coinbase -> Yet to launch, >2M whitelist registrations.
● On-chain gaming
○ NFT + Gaming funds arising
● Digital Art
○ Sotheby’s auctions
○ More digital artists entering the space
● Metaverse
○ Facebook rebranding + Microsoft
○ Decentraland rise

40. Thank You! Questions?
Juan Pellicer
Research Analyst at IntoTheBlock
Email: jpellicer@intotheblock.io
Twitter: @juanmpellicer