The blockchain industry has embraced NFTs as a viable endeavor.
Its entire market capitalization is currently over $10.5 billion, and Coinmarketcap predicts that it will reach over $147 billion by 2026.
According to the Collins Dictionary, the Word of the Year for 2021 is “NFT.”
Rare blockchain-based tokens known as NFTs (Non-Fungible Tokens) have unique qualities that prevent them from being traded for other tokens.
Five NFTs can be produced by creators, but this does not imply that they are all identical and interchangeable.
These 5 have distinctive qualities that need to be distinguished from one another, despite the fact that they all appear identical and were cast together.
What does NFT Rarity mean?
An NFT’s distinctive quality that sets it apart from the competition is a rarity. Your NFT’s rarity is a gauge of how distinctive it is. An NFT has a high rarity if it is both distinctive and well-liked. One of the most crucial criteria that crypto fans take into account when wanting to buy or sell NFTs is NFT rarity. Rarity is the top factor that pushes the price of an NFT high.
So how do we determine NFT rarity?
The rarity of two separate NFTs from two different collectors, such as Okay Bears and Bored Ape Yacht Club, can be easily ascertained.
The overall rarity of each NFT, however, is found by comparing the attributes of each NFT in the set when there are several hundred NFTs.
The rarest attribute can be found, or statistics can be used to measure statistics’ scarcity, to calculate this total rarity. Rarity Tools created methods for determining ” rarity” because the fundamental evaluation is always based on the NFT’s overall traits rather than a single attribute.
Typically, physical characteristics such as attire, jewelry, fur, headgear, spectacles, backdrops, necklaces, and earrings must be taken into account. These are utilized as measures because no single collection of NFTs can contain all of their qualities simultaneously, making them irreplaceable.
The NFT rarity can be determined using one of four approaches. Some approaches are deemed inferior to others because they focus on one feature while ignoring others.
The methods used are:
- Feature rarity model
- Average Feature Rareness Model
- Statistical rarity model
- Scoring rarity model
Feature rarity model
The ranking model uses NFTs’ rarest traits as a measuring stick. Let’s contrast the following ape classes as an illustration:
Top to bottom:
- Only 3% of Ape#4317’s individuals have the short Mohawk, making it the most uncommon characteristic.
- Only 1% of Ape#8520’s features are prom dresses, making them the most uncommon.
- Only 2% of Ape#4688s have the Stuntman helmet, making it the most uncommon attribute.
The sequence under the Rare Trait Model will be #8520, #4688, and #4317.
Average/average feature rarity model
A different technique that is occasionally employed is averaging the rarity of features seen on the NFT.
For instance, if an NFT had two features, one of which was 50% rare and the other 10% rare, its average trait rarity would be (50+10)/2 = 30%.
To our apes:
- The average trait rarity for Ape #4317 is 7%.
- The average trait rarity for Ape #8520 is7.80%.
- The average trait rarity for Ape #4688 is 10.2%.
Average Trait Rarity (A.T.R) = Sum of traits in an NFT / Total Number of Traits in an NFT
The order would be fully reversed from the first way using this one. The positions would be Ape#4317, Ape#8520, and Ape#4688.
This model’s flaw is that it does not take into account whether NFTs have extremely distinctive individual characteristics.
Statistical rarity model
This model includes average rarity, but it differs in some aspects from the average model. By multiplying all of an NFT’s features, the total rarity of the NFT is determined.
Or use the illustration from above:
Therefore, in this scenario, Ape#8520, Ape#4317, and Ape#4688 have traits that are statistically rarest.
Scoring rarity model
This model is comparable to the feature rarity model, except the feature rarity is typically computed as a percentage, whereas this model is typically calculated as a fraction. One of the simplest and most trustworthy methods for determining the NFT rarity is the rarity scoring model. Many NFT websites make use of it.
Here is formula
[Rarity Score for a Trait Value] = 1 / ([Number of Items with that Trait Value] / [Total Number of Items in Collection])
[Rarity Score for a Trait Value] = 1 / [Total Rarity of that Trait Value]
According to rarity tools, the total rarity score of a specific NFT is calculated by adding the rarity scores of all the trait values in that NFT.
The NFT in this model is more uncommon, the higher the rarity score. Following that, Ape #8520 and Ape #4317 are the rarest, with Ape #4688 being the most uncommon.
As a result, an ideal ” Rarity Score” is derived for an NFT, which aids in determining whether that NFT is rare.
As indicated and validated above:
- The rarest trait is what Trait Rarity evaluates.
- While some models give preponderance to the single rare trait, the Average trait and Statistical Rarity consider the gross traits in an NFT.
- One rare trait and gross traits are taken into account when calculating the rarity score, which rates NFTs.
It is important to keep in mind that NFTs are valued differently depending on the NFT community.
In order to rank NFTs as the rarest, the CryptoPunks community gives “attribute count” priority, which is irrelevant to other communities
Other communities do not take into account Waifusion’s community’s preference for matching “clothing and style” when ranking NFTs,
As a result, each community has a preference for what to emphasize in order to classify NFTs as the rarest.
You might be perplexed as to why it is so difficult to ascertain the rarity of NFTs, since part of due diligence is knowing how uncommon a collection is. Its information aids in choosing what to buy and deciding which item will produce a higher ROI.
If you are unable to conduct the diligence process on your own, certain websites rank NFTs like:
- Rarity tools
- Ether scan Token Tracker
- Rarity sniper
- Icy. Tools