Contributor, Benzinga
January 18, 2023

Non-fungible tokens (NFTs) are perhaps the most lucrative sector in all of Web 3. From one-of-a-kind digital artworks to virtual real estate, NFTs are rapidly expanding and making headlines all over the world. 

In recent years, the NFT market has exploded. In 2020, the total sales of NFTs were around $13 million. A year later in 2021, total sales exceeded $2 billion. Even 2022, a painful year across most asset classes, saw a record number of 101 million NFT trades – eclipsing the 58.6 million NFT trades in 2021. 

Whether you’re an avid collector or just curious about this new trend, this article will give you a glimpse into the high-priced world of NFTs.

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What Are NFTs?

NFTs are a type of cryptographic token. They represent a unique underlying asset and serve as verifiable proof of ownership and authenticity. NFTs can represent real-world items such as artwork, real estate, property rights and individuals’ identities. 

An easy way to think of an NFT is as a digital certificate of authenticity of an asset. It’s a way to prove that you own the original version of a one-of-a-kind asset.

NFTs are not fungible, which means that they cannot be exchanged with each at equivalency. An easy way to understand non-fungibility is by imagining rare baseball cards. A rare baseball card cannot be exchanged at equivalency for any other baseball card, even if they feature the same player, condition or edition. The historical significance, rarity, condition and many other factors give that baseball card a unique value that can’t be replaced by another. 

Like most cryptocurrencies, NFTs exist on the blockchain. Picture a blockchain as a digital notebook. Every time a transaction occurs, such as buying or selling an NFT, it’s recorded on a new page in the notebook. All pages are linked together in chronological order, creating a chain of pages (blocks of data), hence the name blockchain.

This chain is available to all users and stored on multiple computers over the world, making it decentralized. This feature makes it difficult for any individual to tamper with the blockchain as all the computers need to agree on the changes.

Why Do NFTs Have Value?

Although many NFTs today may seem like a fleeting trend, the reality is that NFT technology holds immense potential.

Web 2 brought society a world in which a select few tech giants hold sway over personal data. However, NFTs, as part of the web3 movement, have the power to tip the scales. They drive value by redistributing the power of ownership to creators and the community – democratizing the monetization of intellectual property.

In terms of specifics, a few additional factors contribute to the value of NFTs:

  1. Utility: NFTs can have functional use cases such as access to a virtual world, exclusive access to a live-streaming event or access to virtual products and services.
  2. Ownership: NFTs prove ownership of a unique asset, such as a digital art worth, virtual real estate or a membership. This feature gives the holder the power to monetize and control their digital asset as they see fit. 
  3. Authenticity: NFTs leverage blockchain technology, which ensures that tokenized assets are tamper-resistant and verifiable.

Although NFT technology is undeniably valuable, the value of an individual NFT is subjective and varies. NFTs themselves are not an investment. Instead, NFTs are a form of technology that is used to verify the ownership and authenticity of an underlying asset, for example, digital art or virtual real estate. 

Most Expensive NFTs Ever Sold

As the world of NFTs continues to evolve, it’s worth taking a look at the most expensive NFTs ever sold. These digital assets, which are unique and cannot be replicated, have made headlines for their sky-high prices. 

1. The Merge - $91.8 Million

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On Dec. 2, 2021, The Merge by Pak, officially became the most expensive NFT ever sold –  almost 30,000 collectors pitched together for a total cost of $91.8 million. Pak, a pseudonymous artist (or artist collective), is at the forefront of crypto media and digital art, known for digital art and savvy product strategies.

The Merge is a digital, dynamic artwork that consists of three large, white circle-like masses. Interestingly, the more mass customers bought, the larger their mass would become. If a user owns an NFT and purchases another, two NFTs will merge into one, with their masses added together and the circle growing in size.

The project had a unique built-in scarcity mechanism that incentivized collectors to purchase more. The more they bought, the higher the proportion of individual rewards. Namely, for every ten masses you bought, you received one for free. 

2. Everydays - The First 5000 Days - $69.3 Million

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Everydays: The First 5000 Days is a digital art created by Mike Winkelmann, professionally known as Beeple. It was sold for $69.3 million at Christie’s in 2021, making it one of the most expensive NFTs ever sold. 

Beeple is a high-tier and highly respected artist in the Web 3 community. He proved that art can be digital and doesn't necessarily have to have physical properties. At the time of writing, Beeple is one of the most valuable living artists in the NFT world.

Everydays: The First 5000 Days is a collage of 5000 digital images created by Beeple. In 2007, Beeple pledged to create one piece of art every day, and this NFT piece is the result of that commitment. 

3. Clock - $52.74 Million

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The Clock is a single NFT that depicts a timer, which counts the number of days Julian Assange has been imprisoned. The piece was created by Pak and Julian Assange and curated as part of Pak and Assange’s Censored collection.

The purpose of the NFT was to raise funds for Assange's legal defense. It was sold for 16,953 ETH ($52.7 million at the time of the sale), which ranks it as the second-largest single NFT sale to date, behind Beeple’s Everydays. 

The Clock was purchased by AssangeDAO – a group of over 10,000 people who pooled their money to purchase the NFT and support Assange. 

4. Human One - $28.9 Million

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Human One is a hybrid digital and physical artwork by Beeple that sold for $28.9 million. It is widely regarded as the first dynamically changing hybrid artwork in the digital art community. 

The NFT is an ongoing journey and will continue to evolve over the course of Beeple’s life. The physical sculpture for Human One is an always-on kinetic 16K video sculpture that changes over 24 hours according to the time of the day. 

What’s more, the video will contain clues to unlock additional NFTs. These NFTs will be Edition 2, with one going to the winner and the other going to the owner of Human One. 

5. CryptoPunk #5822 - $23.7 Million

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CryptoPunk #5822 is a super-expensive alien-style CryptoPunk that was sold for over $23 million on Feb. 12, 2022. Profile picture NFTs like the CryptoPunks, are often valued based on their rarity. 

CryptoPunk #5822 was one of the rare nine aliens in the collection but also one of the 481 to wear a bandana. 

Most Expensive NFT Projects

Many projects in the NFT space are pushing the boundaries of what’s possible with blockchain technology and offering new ways for developers and investors to monetize their work. The following list will explore the top 5 most expensive NFTs projects by floor price.

The floor price of an NFT project refers to the minimum price that a seller of an NFT in the collection is willing to accept for their NFT. It’s like the starting price for an auction. 

Bored Ape Yacht Club 

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The Bored Ape Yacht Club (BAYC), often colloquially called Bored Apes (BAs), is a collection of 10,000 unique ape NFTs that exist on the Ethereum blockchain. Each BA NFT is a one-of-a-kind asset that represents an exclusive and unique membership to the BAYC community. BAYC was created by Yuga Labs and has a steep floor price of 78 ETH (roughly $100,000 in January 2023). 

BAYC has value because of its scarcity and uniqueness. Each NFT represents membership in an exclusive digital society and is a status symbol of the digital elite. Members of the BAYC community gain exclusive access to special events and additional NFTs and are able to meet other BAYC holders such as Steph Curry and Snoop Dogg.

CryptoPunks

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CryptoPunks are collectible pieces of digital art represented by NFTs on the Ethereum blockchain. The project was created in 2017 by New York-based Larva Labs as an experiment into the value of NFT and art. CryptoPunks have ultimately helped popularize the concept of crypto art today. The current floor price for Crypto Punks is roughly 66 ETH (roughly $90,000).

The collection consists of 10,000 pixelated pictures of randomly generated characters called CryptoPunks. The collection holds 3,840 females and 6,039 males, with a few aliens, apes and zombies in the mix too. Like BAs, CryptoPunk NFTs have been purchased by a wide range of celebrities including the likes of rapper Jay-Z and wide receiver Odell Beckham Jr. 

Mutant Ape Yacht Club

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The Mutant Ape Yacht Club (MAYC), called Mutant Apes, is a collection of 20,000 mutated apes that exist on the Ethereum blockchain. They are ultimately an extension of the BAYC NFT collection. The current floor price of MAYC is 16 ETH (roughly $22,000).

Half the collection was solid in a public auction, while the rest were created by existing BAYC NFT holders who exposed their BAs to a vial of airdropped Mutant Serum. In other words, BAYC NFT holders were able to mint Mutant Apes free of charge. 

Like BAa, each Mutant Ape is unique and has its own set of properties. With its ambitious roadmap, active community and strong team, MAYC is likely to accrue value over time.

Azuki 

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Azuki is a digital brand that is associated with its collection of 10,000 avatars. Each digital avatar is a unique, hand-drawn NFT that exists on the Ethereum blockchain. The cheapest Azuki is 15 ETH (roughly $20,000).

All Azuki NFTs have different traits regarding background, hair, clothes and wearables – some Azukis hold a skateboard, swords, a cup of coffee or a Boombox. The NFTs are based on 13 trait categories and 469 traits that determine the appearance of each Azuki NFT. 

Chiru Labs is the startup behind Azuki NFTs and is composed of a diverse team with experience in crypto, gaming and art. Credited as a co-creator is Arnold Tsang – a well-known conceptual artist that has worked with Overwatch (an American video game produced by Activision Blizzard). 

Where to Buy NFTs

Ethereum-based NFTs can be purchased from OpenSea – the world’s first and largest digital marketplace for NFTs. However, you’ll need to take a few important preceding steps before purchasing directly from OpenSea. 

The first step is to sign up for an exchange account to buy Ether (ETH). The amount of ETH you need to purchase will depend on the floor price (the price of the cheapest item in the collection) or the listed ask price for the NFT you are buying. You should purchase a bit more ETH than you need for the transaction fees that you will pay when transferring ETH to a wallet and making the transaction on OpenSea.

ETH can easily be purchased using any major cryptocurrency exchange such as Uphold, eToro, Binance or Webull. The next step is setting up a software wallet such as MetaMask. MetaMask is free to use and can be created in a matter of minutes. Once you have an account, transfer ETH from your crypto exchange account to your individual web-based wallet. From here, you can connect your wallet to OpenSea and proceed with the transaction. 

Will NFTs Continue to Rise in Value?

NFTs are a kind of disruptive technology that has made headlines for exorbitant prices and unique digital assets. From virtual worlds, in-game collectibles and digital art, NFTs are opening up new possibilities for creators to monetize their intellectual property. 

However, the question on everyone’s mind is whether NFTs will continue to rise. The truth is, it’s hard to predict the future of the NFT market; however, it’s worth noting that the NFT market is still relatively new and has a lot of growth potential.

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