NFT Rarity: Is That NFT Worth The Investment?

One tip I can give you in this space is the following, only sell your NFT for a price after assessing its rarity ranking! 

If you do so, you might let go of it for much less than it is actually worth. Why are some NFTs so expensive, and what gives them their value? 

The truth is, not all NFTs within the same project are created equal. That’s why we’re here to discuss the concept of NFT rarity!

What is NFT Rarity?

In a nutshell, when defining an NFT, the higher the rarity rank, the more unique and scarce the NFT’s traits are! This means that when a rarity rank increases, the price of the NFT increases by default.

Although one can say that less supply creates more demand, this is not precisely what NFT rarity is about. In a real-life scenario, if a designer were to come out with a line of limited edition handbags, those would naturally be more expensive than any other retail line of his! 

Why? Simply because they are limited in stock, which makes them highly coveted and sought-after…

However, NFT rarity depends on several other factors beyond the supply of an NFT. Let’s get into it!

The best example I can give here is the iconic Cryptopunks! We know this collection consists of 10,000 NFTs divided into 5 Punk types with varying supplies:

• 9 Aliens → This is the rarest type in the collection which explains why it is the most expensive type.  
• 24 Apes
• 88 Zombies
• 3840 Females
• 6039 Males → Least rare, so their price is relatively low with respect to the Alien Punks.  

But, rarity doesn’t only depend on the supply! You have to take into consideration the rarest traits it possesses, statistically assess the rarities, and even measure the average of all the traits! 

The Best Way To Calculate NFT Rarity!

Most automated calculators use a special method that accounts for both the rarity of individual traits, as well as the overall rarity of an NFT. They call it the NFT Rarity score.

They do this for all the traits in an NFT, and the numbers are ultimately summed up to make up the overall rarity score of your NFT. 

The higher the score is, the rarer your NFT.

Now, humans can’t keep on calculating the rarity scores of each because it can be awfully time-consuming with the number of NFTs created each day… 

In comes the Rarity and analytics tools to the rescue → Check out the best tools on the market in 2023 right here! 

Tips For Finding The Best NFTs!

• Research is your best friend! You need to be aware of the properties of a specific NFT, its rarity, and its process of generation. 
• Find out if the creator has a community or not. If yes, make sure to keep an eye on this community for all the latest news and releases.
• Study the price of an NFT. 
• Find out how many (the number) of that specific NFT exists on the market.
• Determine which marketplace you can buy it from. 
• Always keep your eyes on Twitter, Discord, and Youtube for fresh releases!

Less Common Methods of Calculating NFT Rarity

Average Trait Rarity

In detail, you need to add the percentages of each trait and divide the total by the number of traits inside the collection. However, the method only considers the general rarity of that NFT, and not of the token’s rarest trait. So, it is not commonly used. 

Statistical Rarity

Statistical rarity creates a rarity score by multiplying the statistical rarity of each trait that an NFT possesses. However, it places too much emphasis on an NFT’s total rarity. So, it is not the best option out there!

Trait Rarity Ranking

This method ranks an NFT based on its rarest trait. If a token has 6 common traits and one legendary trait, the method considers the NFT a legendary NFT. Subsequently, the method ranks the NFT against others based on its rarest trait. The problem with this method is that it only takes the rarest trait into account. So, this method is considered highly inefficient.