Top 5 Most Expensive NFTs: Valuation is Subjective or Objective?

NFT, NFT, NFT. You must be living under the rock if you haven’t come across this term yet. As a matter of fact, NFT market has hit a size of $2.5 billion in the first six months of 2021 (source). No matter how much we joke about JPEGs rocks being sold for millions, this is serious money. So today, we try to acknowledge and embrace this madness. A few posts ago, I wrote about a framework that helped us find the underlying value of an NFT. If you haven’t read it yet, this post might seem a little off for you. Today, I plan to bring forth top 10 most expensive NFTs and we’d try to figure out how they would fit within our framework. Let’s begin.

5. Metarift:

Sold for $904K, Metarift is a 12 second GIF sold on Marketplace on March 2021 for ETH 489. It is developed by an artist that goes by the name of Pak. Just like Bitcoin’s brilliant marketing strategy of keeping the identity of the founder hidden (Satoshi Nakamoto), Metarift creator’s is also a mystic creature. Driving it’s value from this mystery, Metarift has become one of the most expensive pieces of art sold through NFT.

The image below explains how this NFT finds it’s place in our valuation framework. NFT is mainly driving it’s value from the name “Pak”. Pak has other famous digital artworks and mystery around his identity just adds that buzz around his work.

4. CryptoPunk #4156

Okay. So this one is even weirder. There are over 10,000 collectible characters known as CryptoPunks on Ethereum blockchain. Released by a two member team Larva Labs, each of these characters are unique in terms of the traits. How? Because each of them are algorithmically generated. They have been in circulation around 2017.

Although the meaning of CryptoPunks has lost in the middle of the hype but these are a part of a bigger movement that started back in 1992. During that period, governments started taking control over the internet and privacy for it’s citizens. Some of the key techniques, like cryptography, that would drive privacy were kept limited to army and government banks.

At the same time group of rebels, known as the cypherpunks, opposed state control, especially of the internet. They felt that the government intervening in the early internet had led to censorship and lack of privacy. The restrictions on the export of encryption algorithms went against their core belief that privacy is a human right. They wanted to create a world where all information on the internet could be traced ONLY if the person sending a message wanted that information revealed.

The cypherpunks believed cryptography was the path to freedom and would allow people to maintain total privacy over their own communications.

Despite not fitting into our framework completely, this cyberpunk was sold for $1,250,000.

It is driving its value from the history that I just mentioned above. Also, punk culture is usually in line with crypto space where the general narrative is of being a rebel.

3. Axie Infinity Genesis Land

Metaverse in itself could be a series of it’s own blogs. But for now think of a virtual world. A world where you could travel, live, shop and do whatever you could do in your normal life. One such metaverse based game that has gained a lot of popularity in the past is Axie Infinity.

So one person actually decided to purchase a land in this game. This land called genesis land is extremely rare and has a high price. Which is why it was purchased for a whopping $1.5 million. At this point, I don’t even feel like evaluating this purchase. But as one Indian ad once said, “Shaunk badi cheez hai”.

2. The First Tweet:

Jack Dorsey, founder of Twitter inc. has been a big believer of crypto. So it didn’t come out as a surprise when he decided to jump into NFT space. He sold an image of his first ever tweet while he was setting up his Twitter account back in 2006. He was able to rake in a sweet $2.9mn after this transaction.

Being the first of it’s kind of NFT, coupled with a historical significance, this tweet was obviously sold for a hefty amount in the market. Valuation framework is given below:

1. Everydays: First 5000 Days

Beeple, a digital artist is the creator of this NFT. It was sold in an auction with the price starting at $100. However it kept on going up with final bid taking place at $69.3mn. Yes you read it right. Beeple has been making artwork since May 2007 and as not even skipped a single day ever since. This particular artwork is the collection (collage) of his first 5000 days of work. This has become the most expensive NFT sold ever.

Conclusion:

This blogpost is just a glimpse of what this space is. There are so many NFTs which are sold at unimaginable prices right now. For example, I just covered one of the cryptopunks. Other CryptoPunks like #6965, #7804, #3100 were sold for more than $5mn each. Apart from that, the meme space is also gearing up for NFTs. I recently read about the infamous “Charlie bit my finger” video being sold by it’s original creator.

I can totally see “Bachpan ka Pyar” being the next NFT. Beauty really lies in the eyes of the beholder! For real.

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Until next time..

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