How to Calculate the Rarity of an NFT?

NFT Rarity – What is it all about?

Have you ever wondered why these NFTs are worth millions and billions? Since the term “rarity” refers to scarcity that depicts the object’s uniqueness. Most NFT collectors always desire an NFT that is one hundred percent rare as a unique NFT can greatly increase their profitability ratio. And for this reason, many NFT folks always want to know how scarce a particular NFT is before buying it or how rare the NFTs in their collections is to calculate how much to ask for them when selling them. If you are new to the NFT space, you must be unsure how to know the real worth of NFTs. To understand its value, one needs to know how to calculate the rarity of an NFT. So, if you are still wondering how to calculate the rarity of an NFT, this blog is dedicated to you.

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First, let’s have some clarity about NFTs

NFTs took the digital collectibles world by hurricane and have caught the attention of crypto folks, especially young minds across the globe. These tokens are one of the notable digital innovations that have positively impacted many sectors, including arts, gaming, sports, fashion, etc. In simple words, an NFT can be regarded as a digital license of a unique digital asset, and no one can replicate it at any cost. Unlike cryptocurrencies like Bitcoin or Ethereum, NFTs cannot be exchanged or equivalently traded like normal crypto assets. For simple and better understanding, an NFT is a unit of data stored on a blockchain and can be linked to digital and real-world objects to provide immutable proof of ownership. Top celebrities like Jack Dorsey, Snoop Dogg, and Shawn Mendes have already expressed interest in NFT, released their unique digital creations, and sold them as NFTs.

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Four main methods to calculate the rarity of an NFT

The rarity of NFTs is determined using one of four methods, namely:

 

  1. Trait Rarity Model
  2. Average or Mean Trait Rarity Model
  3. Statistical Rarity Model
  4. Rarity Score Model

 

  1. Trait Rarity Model

 

Trait Rarity Model ranking methodology compares NFTs based on their rarest characteristic. The model considers only the rarest attribute of an NFT and not their entire traits.

 

  1. Average or Mean Trait Rarity Model

 

The rarity of NFTs is determined by the Average or Mean Trait Rarity model using the mean or average method. Before comparing NFTs, it considers all qualities and calculates a specific NFT trait using the averaging approach. Despite considering the overall rarity of each feature, this model’s drawback is that it does not think if an NFT has an extremely rare individual trait.

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  1. Statistical Rarity Model

 

Although it differs from the mean model in certain respects, this model also considers general rarity. By multiplying all of an NFT’s characteristics together, the overall rarity of the NFT gets calculated.

 

  1. Rarity Score Model

 

The rarity score model is one of the easiest and most reliable methods for determining how rare NFTs are. 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 rarity Score Model is more or less identical to the trait rarity model, except trait rarity is typically calculated as a percentage, while rarity scores are typically fractional.

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Final Thoughts

 

Hope you had some clarity in determining the rarity of NFTs. An NFT with a high rarity value has a good probability of appreciating over time and making money if it is sold. Investors should consider other aspects of a purchase, such as functionality, active community, team engagement, and artistic quality, in addition to the rarity rank while making a decision. Apart from the four methods above, users also can calculate NFT rarity independently using several automated techniques, including HowRare.is, Rarity Tools, Traitsniper, OpenSea rankings, and Rarity Sniper.

 

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