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Marketplaces and Trading Mechanics Flashcards

7 cards from real NFT practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Marketplaces and Trading Mechanics flashcards as text

  1. What is 'royalty enforcement' and why did it become controversial among NFT marketplaces in 2022-2023?

    Answer: Some marketplaces made creator royalties optional, undermining artists' passive income

    Blur and other marketplaces made royalties optional to attract traders, sparking debate about whether platforms should technically enforce or merely suggest creator royalties.

  2. What is a 'phygital' NFT in the art market?

    Answer: A digital NFT linked to a redeemable physical artwork or object

    Phygital NFTs bridge digital and physical worlds, where owning the NFT entitles the holder to claim or receive a corresponding physical item.

  3. What is the role of an 'escrow' mechanism in peer-to-peer NFT trades?

    Answer: To hold assets from both parties during a trade until conditions are met

    Escrow smart contracts lock both the NFT and payment until both parties fulfill their obligations, enabling trustless peer-to-peer swaps.

  4. What does 'paper hands' mean in NFT trading slang?

    Answer: Traders who sell quickly at the first sign of a price drop

    Paper hands describes traders who panic-sell early, often at a loss, rather than holding through market volatility.

  5. How does Blur's 'Blend' protocol differ from traditional NFT marketplaces?

    Answer: It offers NFT-backed lending, allowing owners to borrow ETH against their NFTs

    Blend is an NFT lending protocol where holders can use their NFTs as collateral to receive ETH loans without selling their assets.

  6. What is a 'bundle' sale in NFT marketplaces?

    Answer: Selling multiple NFTs from different collections as a single package at one price

    Bundle sales let sellers group multiple NFTs into one listing, which buyers purchase together — sometimes saving gas compared to individual transactions.

  7. What is 'shill bidding' and why is it considered unethical in NFT auctions?

    Answer: A seller using alternate wallets to artificially drive up auction bids

    Shill bidding involves the seller or their associates placing fake bids to inflate prices, deceiving legitimate buyers about true demand.