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Illustration of rarity in a collection. Demonstration of the visual difference between rare and common NFTs using the example of CryptoPunks. CryptoPunk #2547 (on the right) is the least rare, as it has traits that appear frequently in the collection (i.e., the bandanna and the earring). CryptoPunk #8348 is the rarest in the collection, mostly since it is the only one with seven non-null attributes. Rarity scores are not normalised. After normalisation, the total rarity score for punk #2547 is zero, while the one for #8348 is 100 (min and max of the collection, respectively). In the bottom left corner, we show, as an example, the rarity score of traits associated to the “Facial Hair” attribute.
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We quantify Non Fungible Token (NFT) rarity and investigate how it impacts market behaviour by analysing a dataset of 3.7M transactions collected between January 2018 and June 2022, involving 1.4M NFTs distributed across 410 collections. First, we consider the rarity of an NFT based on the set of human-readable attributes it possesses and show that...
Citations
... These variables were chosen due to their significant impact on NFT valuation and market dynamics. Rarity directly influences the desirability and exclusivity of an NFT [78][79][80], while the last sale price provides a recent market benchmark. Sale count indicates the level of interest and liquidity in the market. ...
Blockchain has revolutionized different sectors with its decentralized, transparent, and secure nature through applications like Non-Fungible Tokens (NFTs). NFTs are unique digital assets verified using blockchain technology, ensuring authenticity and scarcity. In recent years, the NFT market has experienced exponential growth, creating new opportunities for the ownership and trading of digital goods. Despite the many possibilities it offers, challenges exist for NFT in security, efficiency, and user accessibility. In this paper, we propose a solution involving the design and development of robust smart contracts optimized for NFTs to foster functionality and security in NFT marketplaces. These smart contracts are self-executing, where terms are directly translated into code, making transactions automatic and secure. The solution also integrates an AI-driven model of price prediction for NFTs to help the users make informed decisions based on the fluctuation of the NFT market. Besides, there’s also the lazy minting to optimize gas fees, NFTs being created off-chain and minted only on-chain upon buying, supplemented by metadata watermarking for protecting digital assets. We implemented a TrustGuard layer, which was responsible for evaluating the users’ actions based on data off- and on-chain, dynamically scoring their reputation and, based on these scores, limiting access to execute any malicious activities. Comprehensive reviews concerning evaluations made, including performance assessments and security audits using tools such as Slither, also show this platform’s effectiveness. The results indicate a secure, efficient, and user-friendly NFT marketplace with an AI price prediction model achieving approximately 98% accuracy, smart contracts exhibiting zero high-confidence vulnerabilities and robust attack resistance, and lazy minting yielding zero gas fees, thereby laying a strong foundation for future blockchain-based digital asset innovations.
... To examine the different brand NFT experiences, we analysed the textual description of brand NFT collections published online. An NFT collection is a unique group of NFTs that share common features and are often distinguishable (Mekacher et al., 2022). We chose the brand NFT collection as an analysis unit because it provides a meticulous and comparable description of the intended brand experience designed by the brand. ...
This study explores the evolving intersection of branding and digital assets through the lens of non-fungible tokens (NFTs), focusing on their role in shaping dynamic brand experiences. We propose a typology framework that examines how NFTs contribute to brand experience design and provides their implications for brand-consumer relationships. The research analyses five distinct NFT functions—storytelling media, identity badges, product access pass, change medallion and gamification element—and connects these roles to five types of brand experience design: brand heritage, community, product orientation, collaboration, and gamification. The findings contribute to digital branding literature by advancing the understanding of the function of digital assets within the brand experience design. This study offers a structured understanding of the value of NFTs in digital brand building by providing the roles NFTs play in brand experience. It explores the dynamic potential of brands to integrate NFTs into their strategies in the evolving Web3 environment. Finally, the industry pattern identified in this study provides insights for scholars and practitioners seeking to utilise NFTs effectively.
... We began by replicating the qualitative analysis conducted by Mekacher et al. [24] on our dataset. Mekacher et al. analyzed 3 "exemplary" collections by first binning the rarity of each collection's NFTs into 20 quantiles; they observed that sale price was relatively flat in the lower quantiles but sharply increased in the last (most rare) 2-3 buckets. ...
... Mekacher et al. analyzed 3 "exemplary" collections by first binning the rarity of each collection's NFTs into 20 quantiles; they observed that sale price was relatively flat in the lower quantiles but sharply increased in the last (most rare) 2-3 buckets. We saw the same trend as Mekacher et al. [24] in each of the 9 collections that we analyzed; additionally, in cases where visual distance and sale price were meaningfully correlated, we saw a similar relationship, albeit much less pronounced. Mekacher et al. [24] also analyzed the relationship between rarity and number of sales and found a positive relationship. ...
... We saw the same trend as Mekacher et al. [24] in each of the 9 collections that we analyzed; additionally, in cases where visual distance and sale price were meaningfully correlated, we saw a similar relationship, albeit much less pronounced. Mekacher et al. [24] also analyzed the relationship between rarity and number of sales and found a positive relationship. We also observed that the relationship between rarity rank and number of sales appears to have been less driven by outlier values than the relationship between rarity rank and sale price. ...
Conspicuous consumption occurs when a consumer derives value from a good based on its social meaning as a signal of wealth, taste, and/or community affiliation. Common conspicuous goods include designer footwear, country club memberships, and artwork; conspicuous goods also exist in the digital sphere, with non-fungible tokens (NFTs) as a prominent example. The NFT market merits deeper study for two key reasons: first, it is poorly understood relative to its economic scale; and second, it is unusually amenable to analysis because NFT transactions are publicly available on the blockchain, making them useful as a test bed for conspicuous consumption dynamics. This paper introduces a model that incorporates two previously identified elements of conspicuous consumption: the \emph{bandwagon effect} (goods increase in value as they become more popular) and the \emph{snob effect} (goods increase in value as they become rarer). Our model resolves the apparent tension between these two effects, exhibiting net complementarity between others' and one's own conspicuous consumption. We also introduce a novel dataset combining NFT transactions with embeddings of the corresponding NFT images computed using an off-the-shelf vision transformer architecture. We use our dataset to validate the model, showing that the bandwagon effect raises an NFT collection's value as more consumers join, while the snob effect drives consumers to seek rarer NFTs within a given collection.
... In other words, nothing else is like it in the world, making it especially rare. In the NFT context, rarity pertains to the proportion of NFTs in a collection with distinctive and singular attributes [61]. Several fashion NFT collections, including Adidas' ALTS and RTFKT and Nike's Dunk Genesis CRYPTOKICKS, incorporate the "rarity" metric to emphasize to prospective buyers the uniqueness of an item derived from a combination of diverse attributes. ...
This research explores consumer attitudes and behavior in a metaverse retailing environment, mainly focusing on how perceptions of scarcity and rarity influence consumers' views of purchasing virtual wearables. Our findings diverge from preconceived notions about scarcity in physical/online retail, opening the door to a new understanding of how metaverse citizens may perceive scarcity of products. While it may appear simple to assume that physical-world strategies can seemingly be exported to virtual worlds, we uncovered a more complex story. The influence of the supply (availability) information on consumer attitudes in the metaverse is mediated by consumers' need for uniqueness. Specifically, seeing the virtual offerings as relatively abundant increased consumers' need for uniqueness, which improved the likelihood of purchase, a puzzling result. The mystery is better understood when considering how all items in exclusive collections in the metaverse can preserve their rare status, thereby fully separating scarcity and rarity. Unlike in physical retail environments, our findings indicate an interaction: high product availability (low scarcity) increases the likelihood of purchasing only when product rarity is high. These surprising results provide novel insights for academics and practitioners to consider the combinatorial effects of availability information and product rarity, as well as the virtual customers' characteristics, particularly their need for uniqueness as a mediator to their attitudes toward virtual products. Summary • Metaverse retail dynamics differ significantly from physical retail. • Product abundance in the metaverse increases con-sumers' need for uniqueness. • Need for uniqueness has a positive impact on meta-verse consumer attitudes. • Scarcity cues alone seem not to factor in virtual con-sumers' attitudes. • Rarity can be separated from scarcity (availability) perceptions. • Availability increases purchase likelihood only for highly rare offerings.
... NFT leverages blockchain technology to ensure the unique and non-interchangeable nature of each digital asset [3]. Blockchain records all NFT transactions transparently to protect digital assets from duplication and counterfeiting [4]. ...
... Similar to physical collectibles, NFTs can be purchased and sold. As highlighted by Mekacher et al. (2022), artwork or purchased data can be downloaded in their original format at no extra cost. Previous studies (e.g., Anderson and Laughter 2022;Ferone and Della Porta 2022) have examined the rapid development of NFTs in online markets and their relationship with blockchain, Bitcoin, and other cryptocurrencies. ...
... The existing research on NFTs has focused on various aspects, including stakeholders and ecosystem, risk and opportunity (Wilson et al. 2022), trading mode and commodification of fandom (Zaucha and Agur 2022), policy interventions (Truby et al. 2022), price factors of NFTs in the digital art market (Horky et al. 2022), NFTs' relationship with cryptocurrency pricing (Dowling 2022), NFT asset classes (Xia et al. 2022), and heterogeneous rarity patterns of NFT collections (Mekacher et al. 2022). Umar (2022a; investigated the impact of COVID-19 on NFTs and the inter-relationships between major assets and found a high/low coherence in returns between NFTs and other assets for investment horizons exceeding two weeks. ...
As blockchain technology advances, non-fungible tokens (NFTs) are emerging as unconventional assets in the commercial market. However, it is necessary to establish a comprehensive NFT ecosystem that addresses the prevailing public concerns. This study aimed to bridge this gap by analyzing user-generated content on prominent social media platforms such as Twitter, Weibo, and Reddit. Employing text clustering and topic modeling techniques, such as Latent Dirichlet Allocation, we constructed an analytical framework to delve into the intricacies of the NFT ecosystem. Our investigation revealed seven distinct topics from Twitter and Reddit data and eight topics from Weibo data. Weibo users predominantly engaged in reviews and critiques, whereas Twitter and Reddit users emphasized personal experiences and perceptions. The NFT ecosystem encompasses several crucial elements, including transactions, customers, infrastructure, products, environments, and perceptions. By identifying the prevailing trends and common issues, this study offers valuable guidance for the development of NFT ecosystems.
... The investment aspect of NFTs mirrors that of traditional assets, like stocks, where buyers purchase NFTs with the expectation of selling them at a later point for a profit (e.g., Berghueser & Spann, 2024;Mekacher et al., 2022). However, the ownership aspect of NFTs aligns more with a broader consumption understanding (Alkhudary et al., 2023;Belk et al., 2022). ...
... In addition, these studies cannot detect the prevalence and value of these buyer segments, which are crucial factors for managers to evaluate a segment's attractiveness. Moreover, research has mainly provided insights into transactional engagement in the form of NFT purchase intentions (Yang, 2024;Yuan et al., 2024), NFT pricing (Mekacher et al., 2022;Hostetter et al., 2024;Xie et al., 2024), and NFT secondary market selling (Berghueser & Spann, 2024). To the best of our knowledge, only conceptual contributions have dealt with community engagement (e.g., Colicev, 2023) and no prior research has dealt with multiplier engagement. ...
... Thereby, our approach revealed purchase patterns between the segments. Investment-oriented buyers primarily purchase art NFTs, which have traditionally received media attention during the NFT hype phase and represent classic investment-focused NFTs (Berghueser & Spann, 2024;Mekacher et al., 2022). In contrast, the remaining segments display a wider spectrum of interests. ...
... NFTs are unique digital assets stored on blockchain networks, typically representing the ownership of digital or physical items [1]. The rarity of an NFT is a crucial factor that influences its value and behavior in the NFT marketplace [2]. ...
... The rarity of NFTs is determined by various factors, including the set of traits an NFT possesses, uniqueness of the NFT within a collection and overall scarcity of the NFT [3]. Specific factors include trait distribution, combinations of traits, edition size, historical significance, utility and timebased rarity [2], [4]. Scarcity plays an important role in determining the rarity of NFTs, as it directly impacts demand and perceived value [5]. ...
... Scarcity plays an important role in determining the rarity of NFTs, as it directly impacts demand and perceived value [5]. The rarer the NFT, the higher its price tends to be, with less frequent trading and potentially higher returns on investment [2]. ...
This study introduces GenePixKolor (GPK) fusion, an innovative approach to non-fungible token (NFT) generation and rarity ranking tailored for the gaming industry and tokenomics ecosystems. GPK Fusion leverages genetic algorithms, image processing and machine learning to create a comprehensive, four-stage system that optimizes both the trait generation and visual appeal of NFTs, while providing an advanced rarity ranking mechanism. The GPK Fusion’s rarity ranking method uniquely combines trait-based and pixel-based evaluations. Pixel rarity was assessed using color distribution for overall aesthetic appeal, and trait rarity was assessed using trait combinations. Fusing pixel rarity with trait rarity provides a more holistic assessment of an NFT’s uniqueness, balancing functional value with visual attractiveness. This approach addresses the limitations of existing rarity calculation methods, offering a more nuanced and comprehensive evaluation of the NFT. Empirical comparisons demonstrate that GPK Fusion consistently produces NFTs with superior trait combinations and enhanced visual appeal compared to traditional methods. Its rarity ranking shows a strong correlation with practical valuation strategies in real-time trading environments and enhances the NFT marketplaces. This research contributes to the evolving field of NFT design and valuation by providing game developers and tokenomics strategists with a powerful tool for creating, evaluating and ranking digital assets. GPK Fusion’s methodology opens new avenues for creating more engaging, visually striking and balanced NFTs. GPK potentially revolutionizes asset creation and valuation in the rapidly growing intersection of gaming and blockchain technologies.
... Existing approaches mine various factors that can influence the worth of NFTs. For example, Mekacher et al. [25] show that tokens with rare or distinctive properties can create a sense of scarcity, often resulting in higher prices. Costa et al. [9] predict the NTF price based on its visual content. ...
... From this table, we can observe that the asset value approaches are all for token-level NFT pricing, while the price prediction methods are for daily-level collection price prediction. The former usually estimates the current or intrinsic value of a specific NFT based on multiple relatively static factors, such as rarity [25], multimodal content [9], and twitter activities [19]. However, these works lack forecasting awareness and cannot meet the requirements of investors in such a dynamic market. ...
... Overall, our proposed method unifies both existing token-level works [9,19,25,27,35] and collection-level studies [4,18,23], while also enabling them to consider future predictability. The collectionlevel task provides a broader perspective on overall trends from a macroeconomic perspective, while the token-level task offers detailed insights into specific decisions. ...
As the non-fungible token (NFT) market flourishes, price prediction emerges as a pivotal direction for investors gaining valuable insight to maximize returns. However, existing works suffer from a lack of practical definitions and standardized evaluations, limiting their practical application. Moreover, the influence of users’ multi-behaviour transactions that are publicly accessible on NFT price is still not explored and exhibits challenges. In this paper, we address these gaps by presenting a practical and hierarchical problem definition. This approach unifies both collection-level and token-level task and evaluation methods, which cater to varied practical requirements of investors. To further understand the impact of user behaviours on the variation of NFT price, we propose a general wallet profiling framework and develop a COmmunity enhanced Multi-bEhavior Transaction graph model, named COMET. COMET profiles wallets with a comprehensive view and considers the impact of diverse relations and interactions within the NFT ecosystem on NFT price variations, thereby improving prediction performance. Extensive experiments conducted in our deployed system demonstrate the superiority of COMET, underscoring its potential in the insight toolkit for NFT investors.
... We collected data in selecting top five NFT marketplaces from November 2017 to April 2021, a period during public attention towards NFT significantly increased and trading volumes peaked [7] [8]. Firstly, Cryptokitties a platform combining digital art and gaming elements, notably reached a trading volume of $8.1M in 2021, highlighting its impact on the digital collectibles. ...
