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NFT

A token representing a unique item rather than an interchangeable unit, traded individually and priced by collection floor plus traits.

An NFT is an on-chain record of ownership of a specific token ID. What that ownership entitles you to varies enormously and is defined by the project, not by the chain; often it is the token and a link to an image, nothing more.

As a market, NFTs are the illiquid end of crypto. Each item is unique, so there is no continuous two-sided market. Reported volume has historically included significant wash-trading-crypto, and the nft-floor-price can be held up by a handful of bids.

Treat any position as capital you may not be able to exit at a screen price. Costs also stack: royalties-nft, marketplace fees and gas can consume a large share of a small trade.

Related: erc-721, nft-floor-price, royalties-nft, wash-trading-crypto

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