NFT Marketplaces and Trading Mechanics 2 — Questions and Answers
Question 1: What does 'floor price' mean in an NFT marketplace?
- The average sale price of a collection
- The highest price an NFT in a collection has sold for
- The lowest listed price for any NFT in a collection (Correct answer)
- The price set by the original creator
Correct answer: The lowest listed price for any NFT in a collection
Floor price is the cheapest available listing in a collection, representing the minimum cost to enter that collection.
Question 2: Which marketplace pioneered the 'lazy minting' feature allowing creators to list NFTs without paying upfront gas fees?
- SuperRare
- Foundation
- OpenSea (Correct answer)
- Nifty Gateway
Correct answer: OpenSea
OpenSea introduced lazy minting so creators could list NFTs for free, with minting costs deferred to the buyer at purchase.
Question 3: What is a 'Dutch auction' in the context of NFT drops?
- An auction where the price starts low and rises over time
- An auction where the price starts high and decreases until someone buys (Correct answer)
- A fixed-price sale lasting 24 hours
- A bidding war between two parties
Correct answer: An auction where the price starts high and decreases until someone buys
A Dutch auction begins at a high price that gradually drops, rewarding buyers who wait but risking missing out if someone else buys first.
Question 4: What is 'wash trading' in NFT markets?
- Cleaning metadata before listing an NFT
- Buying and selling an NFT to yourself to artificially inflate volume (Correct answer)
- Trading NFTs only within a private whitelist
- Swapping NFTs peer-to-peer without a marketplace
Correct answer: Buying and selling an NFT to yourself to artificially inflate volume
Wash trading involves an actor buying their own NFT to create fake volume and price history, misleading other traders.
Question 5: On most NFT marketplaces, what does 'make an offer' allow a buyer to do?
- Purchase an NFT instantly at its listed price
- Propose a price below the listed price for the seller to accept or decline (Correct answer)
- Initiate a public auction for a listed NFT
- Request the creator to mint a custom NFT
Correct answer: Propose a price below the listed price for the seller to accept or decline
Making an offer lets buyers propose their own price, which the seller can accept, counter, or ignore.
Question 6: What is the purpose of a 'whitelist' (or allowlist) in NFT drops?
- A list of banned wallets prohibited from buying
- A pre-approved list of wallets that can mint before the public (Correct answer)
- A registry of verified artist wallets
- A list of NFTs approved for resale
Correct answer: A pre-approved list of wallets that can mint before the public
Whitelists grant early or guaranteed mint access to selected wallets, often rewarding community engagement before a public sale.
Question 7: Which metric best indicates genuine trading activity rather than artificial inflation on an NFT marketplace?
- Total listed supply
- Number of unique buyers and sellers (Correct answer)
- Total transaction volume in USD
- Number of NFTs in a collection
Correct answer: Number of unique buyers and sellers
A high ratio of unique buyers and sellers relative to transaction count suggests organic demand rather than wash trading.
NFT Marketplaces and Trading Mechanics 2
What does 'floor price' mean in an NFT marketplace?