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NFT markets
NFT markets are websites that list tokens and take a fee. Volume can be painted. Royalties can be switched off. The market is a company plus a contract.
Volume can be painted. Royalties can be switched off. The market is a company plus a contract.
A worked case
A collection looks liquid because the same wallets buy and sell. A new buyer pays that price. The old wallets stop. The bid they needed is not there.
Royalties
A creator fee is only paid if the marketplace enforces it. Another marketplace may not. A royalty is not a law of the chain.
Wash trading
The same person can sell to themselves to print a high price and a busy chart. A high last sale is not demand.
Check who takes a fee on each sale, and whether the collection's contract can change the rules.
Volume you can paint
OpenSea became the default NFT market of the 2021 boom. It is a website plus contracts. It takes a fee. It can delist. Royalties to artists were a setting, and much of the market later routed around them because other marketplaces did not enforce the cut. A royalty is not physics. It is a rule a market agrees to check.
Volume on these markets can be the same wallets selling to themselves. Researchers and journalists documented wash trading in NFT markets through 2021 and 2022: a collection looks liquid, a stranger pays the printed price, and the old wallets stop. Chainalysis published reports on NFT wash trading in 2022. You do not need their whole industry to use the idea. Busy is not a bid from someone who wants the object.
Before you pay a floor price, ask who was on both sides of the recent sales, and what happens to the artist fee if you move to a different site. The floor is a number. It is not a crowd.
Read it yourself
These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.
Apply the check
Open a question. The line is about this topic. It is not a verdict that anything is safe.
The marketplace, and the wallets painting the tape.
The market contract, which may let royalties be skipped.
The market, by delisting. The contract, if it can freeze transfers.
Check yourself
Does a royalty always reach the artist?
No. It depends on the marketplace enforcing it.
After this you can treat a spectacular last sale as a claim, not as a market.