In the world of blockchain, an nft (non-fungible token) is a digital token which is unique and cannot be replicated or replaced with another token. In other words, each nft is different from its peers. Nft tokens are used to represent unique assets such as a digital card game character, a token that signifies membership in a network or even real estate property. The nft market has seen an increase in usage and interest since the launch of CryptoKitties in November 2018. An nft is similar to a general-purpose ERC-721 token but with some additional properties. An nft can have specific details about the type of asset it represents and also may include special metadata or attributes about that token. For example, if your ERC-721 exists as a virtual sword in your game, you can use these properties to specify that your ERC-721 represents this specific sword instead of as just any old sword. When you create an ERC-721 token on the Ethereum blockchain, it’s assigned a fixed supply and balance at the moment of creation. Because we know exactly how many tokens exist at any given time — and because they aren’t fungible — we can trust it’s not being counterfeited or stolen while also managing its value fairly well. But what if you need something more nuanced than that? If you want to track historical ownership records for future resale value or transfer rights
What is Rarity Tools?
Rarity Tools is the first decentralized solution for calculating the rarity and true cost of ownership for nft tokens. Before the launch of Rarity Tools, most nft token owners used a centralized third party to calculate the rarity and ownership value calculations, which is a high-risk, centralized solution that is vulnerable to fraud. Rarity Tools helps nft owners determine the relative rarity of their token, which is important as a way to set the fair price based on true supply and demand.
How does Rarity Tools work?
When using Rarity Tools, you take the number of nft tokens you own and plug it into their online calculator along with the details of your nft token. Then, you’ll receive a calculated rarity index for your token, which is a percentage of how rare it is against all other nft tokens. For example, if you own 5,000 out of 10,000 total tokens of a specific type, your rarity index will be 50%. That way, you’ll know that the true supply of that nft is 10,000, but only 5,000 have been distributed. It’s important to understand the difference between total supply and distributed supply when calculating rarity as it can have an impact on the token’s value.
Why is the rarity tools important in calculating a token’s worth?
The Rarity Tools rarity metric allows nft owners to track the true supply of their token and calculate the value of the token based on that supply. While you can’t “go to the store” and purchase more tokens at any given time, you can calculate the true cost of ownership for your tokens. Token owners can sell their tokens with a specific demand and price in mind based on their rarity index. A high rarity index means that there are relatively less tokens in circulation, which means that token owners can charge a higher price for their tokens.
How to use Rarity Tools to determine the rarity of an nft?
The ERC-721 token standard has allowed for the rise of nft tokens, which have gained traction in recent months as rare, unique assets such as Cryptopunks have gained popularity and value. With that in mind, token owners need to understand their true supply and demand in the marketplace so they can set a reasonable price for their tokens. The rarity tools allow nft owners to track the true supply of their token and calculate the value of the token based on that supply. Remember, though, that even though nft tokens are rare, they can always be destroyed or sent back to the nft owner. Rarity tools is useful in determining the rarity of a token, but it does not take into account the utility of a token.