NFTs keep attracting investors on a wide scope due to their popularity and utility. This article highlights the various methods for buying NFTs that provide the best value for its investors. There are two popular ways to sell your NFTs – via fixed price or through NFT auction.
NFT Fixed Price
NFT Fixed Price is a type of NFT auction. Here, the seller mentions a price, and the buyers can buy the NFT without partaking in bidding. Hence, the seller sells the NFT at the price he wants. This method is advantageous in its simplicity because the seller agrees on the price, thereby allowing him to collect profit effectively.
NFT Auction
Auction is buying and selling goods, whereby goods are sold to the highest bidder. NFT auction is similar to this. NFT auctions are a way for investors to acquire non-fungible tokens. Buyers and sellers of NFT interact with one another to determine and agree on settlement prices.
Types of NFT Auction
Classic Auction Model
This is the commonest NFT auction. In classic NFT Auctioning, the seller determines a particular price, and after a specific period, the countdown starts, and buyers begin to make bids. At the expiration of the time limit, the NFT goes to the highest bidder. If no bids were placed on the NFT, then the NFT will still belong to the original seller.
A major importance of the classic NFT Auction is the familiarity between the sellers and buyers. It is reliable and convenient. However, an unbidden auction is a disadvantage of this model as there is no major determiner that the NFT will sell.
Dutch Auction Model
Dutch Auction is also referred to as descending price auction. In this auction model, the seller selects starting and reserve prices. The starting price is usually relatively high. The price is then incrementally lowered over some time until the item sells. In this model, the first bidder will be declared the winner.
Reserve Auction Model
This model works similarly to the classic auction model. However, the difference between models is that they set a minimum price known as the reserve, which they are willing to accept. Bidding in this model starts below the reserve model to facilitate the participation of potential buyers.
No Reserve Auction Model
This model is considered the riskiest strategy sellers can use for an auction. It means buyers can determine the exact amount they want to pay with the seller accepting it.
Determining whether to buy NFT at Auctions or Fixed Price
NFT determines the buying strategy that will be employed. A way to determine whether to buy at auctions or fixed prices is by using a blockchain analytics platform such as Nansen to monitor the market space, trends, NFT traders and price estimates.
Auctions have shown more efficiency because auctions match products or items to buyers with the highest value in the marketplace. Auctions do not guarantee the sale of NFT, but with an NFT fixed price, the sale of an item is more assured. Majorly, auctioning will yield a better result than a fixed price as long as the buyer is patient.
Conclusion
Auctions and Fixed Price both have their benefits. Auctions are an interesting way to attract investors because NFTs have unique features that allow them to perform better with the auction models. This article should serve as a guide in helping which one to choose.
