Crypto 101 Everything you need to know about NFT rarity

There is no doubt that the crypto industry has seen a huge success over the years with thousands of new users from across the globe in a short span. This success has given leeway to more innovative concepts that helped the industry grow further. One of the most creative concepts introduced was non-fungible tokens (NFTs). 

These are assets on the blockchain that have been tokenised. They are identifiable with unique codes and are presented through drawings, music, and other art forms. Just like other crypto assets, these tokens can be traded and exchanged. 

NFTs will have more resale value depending on their NFT rarity score. The rarer the token is, the more appeal it has in the crypto market. With this, it is important to know more about NFT rarity as it can help navigate the NFT marketplace. Learn more about it with this Gamdom blog: 

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What is NFT rarity?

NFT rarity refers to how unique or scarce a digital asset is in the marketplace. Determining the rarity of NFTs is crucial for collectors and investors, especially in a fast-growing digital asset space. To better understand its importance, you can imagine it like trading rare cards. If the NFT is in short supply, the more valuable it is. 

There are tons of other factors that determine a token’s rarity besides its scarcity. This includes its historical significance, the popularity of its creator, special features and limited edition numbers. 

What are the factors that affect NFT rarity?

As mentioned, different factors affect an NFT’s rarity in the marketplace. The three most important factors include: 

Historical significance

Historical significance plays a vital role in NFT rarity. If an NFT represents a pivotal moment in digital art or marks a huge event, it gains historical importance. This makes it more valuable in the eyes of collectors. You can expect NFTs that hold a piece of history or mark a milestone in the blockchain world to have higher resale value in the marketplace. 

Popularity of the creator

The popularity of the creator behind an NFT also impacts its rarity. If the creator is well-known and has a huge following, their NFTs are likely to be in high demand. This elevates the rarity and value of their pieces. Some of the most popular NFT creators include: 

• Beeple
• Gary Vaynerchuk
• Grimes
• Steve Aoki
• 3Lau
• Pak
   

Scarcity

The biggest factor that affects an NFT’s rarity is its scarcity in the market. If a piece only has a limited number of editions, its value rises. Scarcity can be achieved by issuing a limited number of copies or creating one-of-a-kind pieces, emphasising the uniqueness of the NFT.

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How can you calculate an NFT’s rarity?

Various methodologies can help you calculate an NFT’s rarity. You can also use an NFT rarity ranking tool which is more effective. These are used by collectors to assess the uniqueness and desirability of a piece in the market. Here are some of the most popular techniques:

Average trait rarity

The simplest method to calculate the rarity of an NFT is with the average trait rarity ranking. It determines the rarity by calculating the average rarity score of all its traits. A higher average trait rarity indicates a more unique and valuable NFT. 

Trait rarity ranking

Another method is the trait rarity ranking that focuses on analysing the individual traits within an NFT collection. It also ranks the pieces based on their scarcity. Traits that appear less frequently receive higher rarity rankings. 

Statistical rarity

This method involves analysing data from the entire NFT marketplace. It compares the rarity of a specific piece against others. Statistical rarity tools take into account trading volume, sales data, and other relevant data to assess its rarity and potential value. 

The best NFT tools to determine the rarity

With the popularity of NFTs in the crypto industry, several tools have emerged to assist in knowing how to check rarity of NFT and scarcity. Here are some of the best NFT rarity tools that can help you if you decide to venture into NFTs:

• rarity.tools: This platform offers a suite of tools for NFT rarity analysis. It uses statistical models to assess the rarity of individual traits, attributes, and combinations within NFT collections. rarity.tools provides users with detailed data and charts, helping them make informed decisions based on the rarity rankings of specific NFTs.
• ERC Rarity: Focused on Ethereum-based NFTs, ERC Rarity is a powerful rarity calculator that follows the ERC-721 standard. It allows users to evaluate the rarity of their NFTs by considering factors such as the number of existing tokens and the frequency of each token's traits. By providing the token's contract address, collectors can quickly retrieve comprehensive rarity data.
• icy.tools: icy.tools is a user-friendly rarity analyser that supports various NFT marketplaces. It calculates rarity scores based on rarity rankings, providing insights into an NFT's scarcity within its collection. icy.tools allow users to compare the rarity of different traits and identify the most unique attributes.
• Rarity Sniffer: Focused on Binance Smart Chain (BSC) NFTs, Rarity Sniffer is a popular tool for rarity evaluation. It assesses the rarity of NFT traits based on the number of occurrences, allowing users to find the rarest traits in a collection. Rarity Sniffer's straightforward interface and useful insights make it a valuable asset for BSC NFT enthusiasts.
• MoonRank: This tool helps users to be aware of the rarity of NFTs on the Solana blockchain. By analysing on-chain data and rarity rankings, MoonRank provides collectors with detailed information about an NFT's scarcity and uniqueness. It also offers price trend analyses to aid users in understanding market dynamics.
• Rarity Sniper: It is a rarity calculator that takes into account factors like the number of traits and their number in the market. By providing the NFT's contact address, users can obtain a rarity score and determine its relative uniqueness within the collection.
   

Should you invest in rare NFTs?

Investing in rare NFTs can be rewarding, but some risks come with it. With this, it is important to research the market, artist, and other relevant factors to help determine a piece’s value. 

You can opt to use one of the many NFT rarity tools mentioned above to help you make more informed decisions before investing huge money into rare NFT pieces. Only invest what you can afford to lose and diversify your investments. Be cautious and stay informed to make the best decisions.

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