How to Value an NFT - How much is the true value of an NFT Analysis and Calculation - How to Value an NFT company

 NFT can sell for hundreds of Millions of dollars to fractions of a cent. So how much is an NFT worth? How do you calculate the value of an NFT? 

Let's start with, it depends. You can value NFT by the collection floor price. Some NFTs have different traits and attributes and rarities. Some NFTs such as Zed Run horses have DNA written in their code. So different blood line, lineage and generation number results in different valuations. Some NFTs promise to deliver utility. Some NFTs promise to deliver a return on investment. The basic answer is it depends on basic economics of supply and demand. Supply can be fixed or can change over time. Supply can increase with new NFTs being minted and added to the collection. Or Supply can decrease over time with burn mechanisms or degrading of the NFT utility. Demand in NFTs can change over night with the power of a twitter influencer, etc, or the leaked alpha can boost demand exponentially. FUD can also decrease the demand side. 

NFTs are fun and risky. Many NFT traders (flippers) get a rush of dopamine similar to the feelings when gambling. The NFT market is still so new that not all NFTs use cases have even been explored. NFTs started with art. And Art can be valued by the eye of the beholder (priceless). 

So how can one value an NFT with so much ambiguity? Below are several methods that can be used to value an NFT. 

1. Value the Artwork

2. Value the Artist (prior collections or artwork, IRL or digital)

3. Base on collection floor price

4. Base on collection floor price plus a % or dollar/Eth/Sol amount for higher rarity/utility

5. Base on future expected return

6. Based on similar collections or artwork (pair valuations)

7. Based on the crypto currency value or the US Dollar value

As you can see, there are many ways to value an NFT. At the end of the day, many people in the NFT market want to know if they can buy an NFT now and sell it for more at a later date. 

How to Value and NFT company

1. Value the total value of all the NFTs in a collection

2. Value the NFT company as a start up 

3. Value the NFT company based on annual revenue (revenue can be through primary and secondary NFT sales)

4. Value the NFT company based on successful sales of other NFT companies

5. Value the NFT company based on the employee count and talent