Non-fungible tokens (NFTs) are a relatively new asset that is changing the game for investors and collectors. Unlike traditional assets or conventional crypto coins, you can't split NFTs. Whether you have a one-of-a-kind NFT or one available in limited quantities, these assets can be difficult to value.

That's why platforms often use an NFT API for floor prices to give investors a better idea of the value of their assets. But what is a floor price, and how is it determined?

Understanding NFT Floor Prices

A floor price is the lowest sale price that an NFT will sell for. The price reflects the NFT's value within the collection. Therefore, the value can change quickly depending on what other NFTs in the group go for or what listings appear.

In traditional markets, the floor price is what economists use to determine the lowest prices that certain commodities will sell for. The same principles apply to NFTs, but more factors go into calculating the floor price.

The simplest way to look at floor prices is to consider the lowest price an owner wants to sell for it and the lowest price potential buyers would be willing to purchase it. Generally, floor prices are lower than those of all the other sellers in an NFT project.

Your asset's floor price depends entirely on the collection at large. Say, for example, that your NFT is part of a massive collection that includes assets that are all unique. Some NFTs in that collection may have attributes that make them more valuable than others. Initially, being part of that collection can cause your asset's floor price to be relatively high due to those rarer or more desired NFTs.

But once those high-priced NFTs sell, your asset's floor price might drop. This figure can change in real-time as other NFTs in the collection go up for sale and availability evolves. That's why referring to a platform that uses an NFT API for floor prices is important. Getting real-time pricing data gives buyers and sellers more insight into potential values and what NFTs could sell for on the market.

Author Resource:-

Emily Clarke writes about NFT data platform, NFT API, NFT metadata for 40+ chains and other related topics. You can find her thoughts at NFT API blog.