9 NFT terms every art collector should know

9 NFT terms every art collector should know
9 NFT terms every art collector should know

Art market

Mieke Marple

My love affair with NFTs began at the same time I was reading linguist Amanda Montells Cultish: The Language of Fantasism. Her book talks about how words, especially neologisms, can be used against cultic ends: At best, they can foster community; at worst, they can be used for brainwashing. “Oh my god,” I thought, seeing the plethora of NFT acronyms (LFG, WAGMI, GM) and context-specific phrases (dough, 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 kinds of cults, she argues, form the social fabric of our lives, be it a 12-step program, Barre classes, or the traditional art world—associations all rooted in their own common language. Below are 10 NFT market terms that are more solid and less trendy than the aforementioned Twitter slang. They will serve any collector well as they explore the dynamic – and, yes, sometimes cultish – world of NFTs.

1:1

Pronounced “one of one” and sometimes written as 1/1, a 1:1 is an NFT that has been released as a single, unique issue. This property is written into the work’s code and is immutable when added to the blockchain. 1:1s is the NFT equivalent of a painting. They are usually owned by a single person and are a format often reserved for works of art. Placing a 1:1 with a well-known collector, institution or fund in the NFT world is just as important as it is with works in the traditional art world.

The two most expensive NFT sales to date, Beeple’s Weekdays: The first 5,000 days (a mosaic of 5,000 digital drawings that sold at Christie’s for $69.3 million in 2021) and Julian Assange and Pak’s Clock (a clock showing the number of days Assange has spent in prison that sold for $52.7 million in 2022), both are 1:1.

Airdrop

Airdrops are free NFTs sent to the web3 wallets of NFT collectors (definition below). Airdropped NFTs are less valuable than the original NFT collector, although they can still be quite valuable. The Bored Ape Yacht Club collectible shipped a derivative of the original NFT called the Mutant Ape Yacht Club to all 10,000 holders, and collectors have paid up to $835,000 for a single one. However, that’s still far less than the best-selling Bored Ape, which sold for over $3.5 million.

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Sometimes airdrops feature the work of new artists as a way for them to gain exposure. Other times it may be a Valentine’s Day or holiday card drawn by the collectible’s original artist. Many airdrops are on Layer 2 blockchains like Polygon (Etherium is a Layer 1) since transaction costs on these chains are much cheaper. Artists who create 1:1, small editions, or generative art (definition below) are generally not expected to provide airdrops to their collectors.

Alpha

Although the term comes 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 to or obtained by a select group of people ahead of the majority of the NFT market. Speculative collectors sometimes form alpha groups, trading information about an artist or collectible that can affect its value. While this may seem unfortunate, the alpha may also be less malevolent. For example, an artist can share details of future drops, partnerships or exhibitions with their most loyal patrons as a reward for their support.

Burn/burn

Burning corresponds to deleting NFT. Of course, because everything on the blockchain is meant to be permanent and immutable, you cannot actually delete an NFT. So burning, where a collector transfers NFT to a non-existent wallet, is the next best thing. Many NFT platforms have a burn function, should it ever become necessary. Sometimes an artist will give you a wallet address to send your NFT to, and handle the burning themselves.

Burning is usually done to reduce an artist’s supply and increase their demand and, by extension, the price of their work. Artists can also turn burning into a gamified aspect of collecting their art. For example, a collector may need to acquire three NFTs of an artist, and then burn them all, to obtain a higher value NFT of the artist.

Collector’s item or PFP

Collectibles are large NFT collections, typically 10,000 in size. They are also called PFPs (short for “profile picture”) because their owners often use the collectible as their profile picture on social media (usually Twitter). Each NFT in a collectible is a unique variant of a single figure. Figures will have different attributes (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 hats – others, less so. Despite their huge issue sizes, collectibles are many of the best-selling NFTs in the space. Seven of 10 highest priced NFT sales are CryptoPunks, the original 10,000 collectible, the most expensive of which sold for $23.7 million.

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Collectibles differ from art NFTs in that they often act as membership cards, granting their holders access to special sites, opportunities, parties, or future NFT drops. This aspect of an NFT is called its utility. Other uses include licensing rights to a holder’s individual NFT and the ability to vote on community decisions, such as which art is purchased for a collector’s fund or which non-profit it donates to.

Collectibles are usually run by a team of people as opposed to a single artist. Successful collectibles, such as Doodles, Bored Ape Yacht Club, CryptoPunks, Cool Cats or World of Women, often become major 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 actually allowed them to purchase other collectibles (CryptoPunks and Meebits) from Larva Labs, their main competitor.

Generative art

Generative art refers to NFTs created using a randomization algorithm or AI. Predetermined oddities are often built into the algorithm so that certain features are more or less likely to appear than others. Generative art can take the form of moving or dynamic 1:1s or large editions of hundreds or thousands of still image permutations. Collectibles, like CryptoPunks or Bored Ape Yacht Club, are technically generative since they are created with a randomization algorithm. However, they are not usually referred to as generative art since their utility prevents people from seeing them as purely “art”.

ix.shells and Sofia Crespo are known for creating 1:1 generative art. The ArtBlocks platform is known for its generative art editions, collaborating with artists such as Tyler Hobbs, Dmitri Chernick and Jen Stark, among many others. The size of these issues tends to be anywhere between 200 and 2000. Caller #109 from Chernick’s generative art collection on ArtBlocks sold for $7.1 million, making it the 11th most expensive NFT.

Mint

Minting adds an artwork to the blockchain, where it officially becomes an NFT. Artists creating 1:1 or small collections will often imprint their own work, and cover any associated fees. However, when it comes to editions in the hundreds or thousands, it is usually prohibitive for the creator to make all their own NFTs. This also applies to open editions, which have no predetermined size limit, but usually have a minimum expression of a period of 24-72 hours. In these cases, the buyers cover the embossing fees.

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Minting is especially exciting when it comes to generative art editions or PFPs because the buyer does not know what permutation they will get when they mint. It’s like buying a pack of Pokémon cards; Inside may be a very rare first edition Charizard, but you won’t know it until you unbox it.

Metadata

Metadata is the key data that describes an NFT. For many works, this is simply the artist’s name together with the work’s title, date and description. But for collectibles and some generative art, metadata is very important because it includes the NFT’s properties along with their rarity. Most collectibles will have no more than 12 properties listed in the metadata. Bored Ape Yacht Club and CrytoPunks have no more than seven traits per NFT. CryptoPunk #2624, for example, has “Cigarette” (10%), “Earrings” (25%), “Wild White Hair” (1%) and “Female” (38%). Metadata is easily visible on platforms such as OpenSea, and for collectibles it is as important to the NFT and its value as the image itself.

Sweep the floor

Sweeping the floor is buying all the NFTs at the floor price in a pool. Floor price is the lowest price an NFT in a collection can be bought for. Floor prices are determined by two main factors: the state of the crypto market and the momentum of an artist or collection. The former causes floor prices to fluctuate quite wildly. It is not unusual for a floor price to double within a month or two, then drop back to the original price or lower. On OpenSea, the floor price is posted at the top of the page, along with total volume, the number of NFTs in the collection and the number of current owners.

Sweeping the floor is performed by both collectors and by a collection’s creator(s). Collectors will sometimes have alerts that tell them when a floor price has dropped below a certain threshold, as well as sniper bots that sweep the floor at that price. When creators sweep their own floors it is usually a form of market manipulation, intended to inflate the collection’s overall value.

Mieke Marple

Mieke Marple is an artist based in Los Angeles

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