Introducing the NFT Popularity to Cover the Gap of Rarity in the NFT Evaluation

Abstract

One of the main Web3 applications is Non-Fungible Tokens, blockchain-based certificates to keep track of the ownership of unique digital or physical assets. Nowadays, there is no standard method to evaluate an NFT, and only for a trait-based collection can we rely on the rarity score, which estimates the scarcity of the traits of the NFT. However, rarity is unsuitable for describing the price of a token in a volatile market, and it is not a good price indicator because a token’s price is strictly related to external unpredictable events and the interest people have in specific assets. In this paper, we propose an evaluation model called The Popularity Model , that aims to evaluate NFTs based on marketability The Popularity Model is based on a set of indices which define a dynamic, socioeconomic indicator, with an antifraud system. We formalised and compared our popularity model and the rarity score to show their differences. Finally, we propose two applicable use cases in which the popularity index can be applied. The experiments show and confirm the utility and efficacy of the proposed evaluation model.