What does floor price mean nft

NFTs are non-fungible tokens that come in the form of a variety of different digital assets and have verifiable ownership via the blockchain. NFTexplained.info is a team of crypto investors who are well versed in the space and have the goal of providing valuable education.

While looking at a collection on OpenSea, one of the statistics accessible is the “volume traded”.

What does this mean? Let’s dive in!

“Volume traded” refers to the amount of currency (e.g. ETH) exchanged for that particular collection over the NFT project’s lifetime. Volume traded is a good indicator of the number of people aware of a project as it reveals the money spent on the project. Established collections have high volume traded values.

Aside from volume traded, OpenSea also tells you the floor price for the NFT collection or project. NFTexplained.info has a full article covering floor price which we will link here.

Looking at volume traded is a good indicator to see how popular an NFT collection is. In order for a collection to attain high volume, there needs to be demand or people willing to buy.

For example, World of Women, one of the top NFT projects, has a low volume traded value compared to Bored Ape Yacht Club, which has enjoyed widespread mainstream media coverage and therefore high awareness:

This disparity in volume shows the difference in popularity from what many consider to be the pinnacle of NFT projects (BAYC) to a well known and highly regarded project (WOW).

Volume traded also allows us to make informed speculation on the amount the founding team or developers obtain from secondary sales.

Two collections, each with the same volume traded, could have amassed different amounts of profit (from secondary sales); the value depends on the percentage the collection has set for royalties.

In order to calculate the amount of money a project has made in royalties, simply multiply the royalty percent (established at mint) by the volume traded.

We hope you are just as excited as we are about NFTs and continue to stay informed at NFTexplained.info. To get the latest news in this rapidly evolving space, follow our team on Instagram & Twitter!

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