The ultimate NFT glossary: all the terms any collectors should know
What is a Non-Fungible Token (NFT)?
A Non-Fungible Token (NFT) is a unique digital asset that can represent virtually anything, including digital art, in-game items, web3 domains, and more.
Unlike fungible tokens, which are interchangeable, NFTs are unique and cannot be replaced with another identical unit. The perceived value of an NFT is dependent on the asset it represents, and some have been known to exchange for values comparable to physical assets like real estate.
NFTs were first introduced on the Ethereum network but are now available on multiple chains, including Solana, Polygon, Cardano, and Tezos.
Types of NFTs
NFTs can take many forms and have a wide range of use cases. Some of the most common uses include:
NFT Artwork: Digital artists use NFTs to distribute their works through decentralized marketplaces. The blockchain's decentralized nature allows NFT holders to truly own their pieces of artwork.
NFT Collectibles: These are unique digital assets that are part of a collection. Examples include CryptoKitties and CryptoPunks.
Web3 Domains: These are personalized crypto accounts that allow others to send you crypto without copying down your blockchain address.
NFT Lingo Every Collector Should Know
Understanding the terminology used in the NFT space is crucial for both beginners and experienced collectors. Here are some terms you should know:
Airdrop: A method used by blockchain projects to distribute cryptocurrencies or NFTs to a person's private crypto wallet.
Alpha: Information on an NFT project that could provide insights to those interested in the project.
Allowlist: A list of wallet addresses compiled by an NFT project before minting that guarantees certain people a spot.
Ape: To "ape" into an NFT project means to acquire a token shortly after launch without doing thorough research.
Burn: To "burn" an NFT means to take that particular token out of circulation by placing it in a wallet that no one can access.
Floor price: The lowest price a buyer is willing to pay for an NFT in a given collection.
Fungible: Refers to the ability for a token to be interchanged with another token. Non-fungible, on the other hand, refers to a token that cannot be replicated.
More NFT Terms to Know
1/1: In the NFT world, "1/1" refers to an artwork or digital collectible that is unique, with only one instance ever minted.
AI Art: Artwork created with the assistance of artificial intelligence technologies.
Aping: The act of quickly and aggressively acquiring a new NFT project or asset, often without thorough research.
Blue Chip: NFT collections or projects that are perceived as highly valuable and stable.
