Unit 3 · Level 4 · NFTs beyond jpegs
Floors, sweeps and mirages
NFT markets have their own vocabulary (floors, sweeps, bids) and their own tricks. The biggest trick is wash trading: selling an NFT between wallets you control to fake volume and price history. When one marketplace paid token rewards for trading in 2022, wallets traded with themselves at industrial scale. Analyses found a huge share of reported NFT volume wasn't real demand at all.
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What you get asked
What does it mean to 'sweep the floor' of a collection?
A sweep gobbles the cheapest supply, often pushing the floor up fast. It tells you someone wants the floor higher, not why.
A wallet keeps selling the same NFT to itself at rising prices. What's the game?
The chart shows a hot, rising asset; the reality is one person talking to themselves. On-chain data is public, but public isn't the same as honest.
Trading with yourself to fake market activity is called ___ trading.
Wash trading is illegal in regulated stock markets; the Trading course covers why. In NFT land it ran mostly unpoliced, which is exactly why the volume numbers deserved suspicion.
Match the market term to its meaning
Learn the vocabulary and the tricks together. Half the terms exist because someone is trying to move your perception.
Why is an NFT only 'worth the floor price' in theory?
Unlike a liquid stock, an NFT has no queue of buyers waiting at the quoted price. In a panic, the floor is a memory, not an offer. Value you can't exit is a story, not a number. 🐜
The rest of this unit
Provenance, mania, market tricks, and the uses that might survive.