Three cool things one can do with EvaluateNFT
Estimating the price of a piece of art is extremely hard. This is even more so for digital artworks that are intended to be traded as non-fungible tokens (NFTs). EvaluateNFT is an application that helps digital artists and NFT investors to make informed pricing decisions for such assets. It does this by mimicking the traditional process of art appraisal. This article provides three specific examples of what EvaluateNFT can be used for.
Disclaimer: No part of this article constitutes financial advice. Any use or reliance on the material presented herein is solely at your own risk and discretion.
Estimating the price of an artwork that has no prior sales history
If you are a digital artist and you are thinking about selling your work as an NFT at one of the auction platforms (e.g., OpenSea), you will need to pick an initial asking price. Choosing a reasonable price is very important: make it too high and you will deter many potential buyers who cannot afford it, make it too low and you will signal to the collectors that your artwork lacks interest among buyers and is unlikely to make a secondary sale.
EvaluateNFT provides realistic price estimates using a predictive model that has learnt useful patterns from thousands of historical examples of first-time NFT sales. All you need to do to obtain such an estimate is upload the file (e.g., PNG or JPEG) of your artwork using a standard upload interface:
The application will return up to 3 similar art NFTs that have recently been sold on OpenSea, along with the information on their level of similarity, last sale date, last sale price, and the total number of sales recorded so far (see below). These and some additional pieces of information are what is used by the EvaluateNFT’s predictive model.
The model calculates three quantities: the most likely price of the uploaded image (expressed in ETH), as well as the lower and the upper 90% prediction limits. These limits define a range that the actual sale price is likely to fall into with a probability of 90%. In our example, the uploaded image is most likely to sell for ca. 0.14 ETH, although there is a 90% chance that the actual price is as low as ca. 0.019 ETH and as high as 2.3 ETH:
Thus, in this specific instance, it might make sense to set the initial auction price to 0.14 ETH (or slightly lower to attract more bidders). Of course, bidders can offer lower prices during the auction but, according to the prediction, the artist should not agree to a price lower than 0.019 ETH. Having the upper 90% prediction interval is also useful — it shows the maximum price the item can sell for and thus whether it’s even worth putting that item on the auction.
Finding under- and overvalued NFT assets
If you are an NFT investor or collector, it’s important for you to understand whether the artwork you consider buying is under- or overpriced. This is where EvaluateNFT’s predictions can be of great help as well.
If you see that the auction price of an artwork is lower than the lower prediction limit produced by EvaluateNFT, you can use that information as a good “buy now” signal because there is a chance you could resell that asset for a profit in the future. Continuing with the example above, any price below 0.019 ETH could indicate that the NFT is undervalued.
Similarly, if you see that the auction price of an artwork is higher than the upper 90% limit, that artwork is likely overpriced (potentially, artificially due to shill bidding or wash trading). In our example, any price higher than 2.3 ETH should be treated as a red flag of this sort.
Doing market research by browsing recently sold artworks
As a digital artist, you may have an idea about your next creation that you are thinking about selling as an NFT. You may have even already started working on it and put together a sketch. But how do you know if there is currently any demand for artworks similar to what you have in your mind?
You could try to figure that out by browsing popular NFT marketplaces and searching for similar, recently sold items. But doing that manually would be a daunting and time-consuming task as major marketplaces have hundreds of collections, many of which contain thousands of items.
What you could do instead is upload your sketch or the finished work to EvaluateNFT and let its search algorithm do the hard work for you. The database used in EvaluateNFT is regularly updated and contains tens of thousands of recently sold art NFTs (i.e. over the last 3–4 months). As illustrated above, the application will return up to 3 items similar to your uploaded image. By looking at these search results you can better understand if you are moving in the right direction and if your work will generate any interest among the market participants. Some of the results can be surprising and may even spark new ideas!
Our team at Next Game Solutions would love to hear your feedback and suggestions on how we could improve EvaluateNFT — just drop us a line or post your comments under this article.
Follow this project on Twitter: @evaluate_nft
