Like all assets, factors of supply and demand are the key market drivers for the value of any NFT.
Non-Fungible Tokens (NFTs) are unique cryptographic assets. They are used to tokenize things like art, collectibles, and real estate, as opposed to cryptocurrency, which are fungible assets: those are identical and can be exchanged for each other. Ownership of this asset is secured by the Ethereum blockchain, meaning that no one can modify the record of ownership or replicate a new NFT into existence.
The most interesting thing about NFTs is that you can create a number of the same artworks and still have one of the same artworks uniquely identifiable from the other pieces through the metadata each NFT contains. The metadata of an NFT describes its characteristics and properties, such as its name, description, transaction history, traits, link to the hosted image, and more. This means that while a number of investors may all have the same-looking artwork in their wallets, they can each say that theirs is unique to the other.
Why Are Non-Fungible Tokens So Valuable?
Like all assets, factors of supply and demand are the key market drivers for the value of any NFT. The scarce nature of an NFT also determines demand from collectors and investors. People are often prepared to pay a lot of money for them.
For instance, a creator may decide that among the 50 pieces minted, 10 of them will have different features from the rest, and only one of them will have a unique background. Naturally, this will further increase the value and scarcity of the pieces, so owning them will see their value rise assuming demand for the collection remains high.
As we can see here, despite the idea that their value is derived from their uniqueness, the project developers, artists, influencers, and community also impact the NFT's demand. Generally speaking, an NFT's value is significantly determined by its creators, utility, marketers, and community. Although there are several examples of successful NFT projects, thousands have yet to launch or hit new levels successfully.
What Are the Most Expensive NFTs In the World
The Merge is the most expensive NFT in the world. It is a virtual artwork designed by an unknown artist nicknamed Pak, which was auctioned on the 6th of December 2021 for $91.8 million on the Nifty Gateway marketplace. The Merge was divided into 312,686 pieces and circulated to 28,983 investors; in other words, this NFT was a collection of works people could purchase.
The Merge comprises three big white masses containing a black background. The more mass investors acquired, the bigger their mass would become. Besides, the piece has an inbuilt scarcity mechanism, which ensures its token supply declines with time. Each transferred Merge token unites with the token of the recipient address, leading to more mass value and one token.
The First 5000
The First 5000 Days is the second most expensive NFT sold so far. It was designed by Michael Winkelmann, a digital artist famously known as Beeple. The piece was sold at Christie's, with the first bid of approximately $100 placed by traditional buyers, followed by bigger offers from cryptocurrency investors.
Since Beeple was popular among crypto users with big sales, such as Crossroads, it took a few hours for the NFT to shoot up to $1+ million. On the 21st of February, 2021, Beeple accepted a $69 million bid for the piece. MetaKovan, the founder and CEO of Metapurse, an NFT investment fund, submitted the bid.
The Clock is the third most expensive NFT sold and has a slightly eccentric tale. This is a creation of PAK intended to fundraise for Julian Assange's defence following his controversial 2019 detention. Assange is still in prison for spying on the US government, primarily through the WikiLeaks website he started. The piece is a clock showing the days since Assange was imprisoned. The Clock NFT sold for $52.7 million (16,953 ETH) in February 2022 to AssangeDAO, a decentralized autonomous organization (DAO) created to manage the sale. Apart from designing The Clock, the creators also permitted people to develop a series of NFTs with censored messages for free. The earnings from the series are channelled to pro-freedom organizations the creators choose.
This is the first real-world artwork of Beeple – a 3D moving sculpture with four screens. It shows an infinite film of an astronaut exploring places at different times. HUMAN ONE NFT reveals the creator's artistic determination outside the digital space. It is thought that its inspiration originates from tests merging several televisions into several shapes and patterns. It's important to note that this piece changes with time. While Beeple lacks the ownership rights of HUMAN ONE, he remotely accesses and updates it regularly. The piece received a bid of $25 million at Christie's auction in November 2021, which accumulated to $28.9 million when fees were included.
CryptoPunks are 10,000 avatars on the Ethereum blockchain, created in 2017 by Larva Labs; Yuga Labs subsequently acquired the collection's intellectual property in March 2022. Since its inception, it has become the perennial of NFT profile picture projects, giving rise to a whole generation of PFP NFTs – including the Bored Ape Yacht Club.
CryptoPunk #5822 is the most expensive CryptoPunk NFT ever sold – the CEO of Chain, Deepak Thapliyal, purchased it for $23.7 million in February 2022. It fetched a high amount because it forms the collection's rarest Punk Type being only one of nine only punks in the entire 10,000 collections. Moreover, #5822 is among just 333 punks with a bandana.