City Research Online

Abstract

We quantify Non Fungible Token (NFT) rarity and investigate how it impacts market behaviour by analysing a dataset of 3.7M transactions collected between January 2018 and June 2022, involving 1.4M NFTs distributed across 410 collections. First, we consider the rarity of an NFT based on the set of human-readable attributes it possesses and show that most collections present heterogeneous rarity patterns, with few rare NFTs and a large number of more common ones. Then, we analyze market performance and show that, on average, rarer NFTs: (i) sell for higher prices, (ii) are traded less frequently, (iii) guarantee higher returns on investment, and (iv) are less risky, i.e., less prone to yield negative returns. We anticipate that these findings will be of interest to researchers as well as NFT creators, collectors, and traders.

Publication Type:	Article
Additional Information:	This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Publisher Keywords:	Humans; Investments; Neurofibrillary Tangles
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HG Finance Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Departments:	School of Science & Technology > Mathematics
SWORD Depositor:	Symplectic Administrator

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