OpenSea Revises OpenRarity Protocol to Reflect Market Dynamics

OpenSea has tweaked the OpenRarity protocol to capture some elements of market dynamics.
Image source: OpenRarity/Twitter

Quick take:

  • OpenSea has revised some aspects of the OpenRarity protocol after user feedback.
  • The platform launched the NFT ranking feature on September 21 to help collectors easily identify ranking NFTs.
  • The leading NFT marketplace also plans to roll out the feature across all blockchains.

OpenSea has revised its rarity ranking protocol after receiving community feedback. The leading NFT marketplace launched OpenRarity on September 21 in a bid to make it easier for collectors to find ranking non-fungible tokens (NFTs).

However, some investors were able to identify some faults in the ranking mechanism claiming it compromises the market-driven rarity structure for some NFT collections.

An NFT collection issues non-fungible tokens based on some traits, which determine their rarity. For instance, in the Cryptopunks NFT collection, there are Punks with aliens, monkeys, and human faces. Aliens are the rarest of them all and also have the most expensive NFT, followed by Monkey Punks.

There are several other traits determining which NFTs are priced more expensive than others in ETH. However, the entire collection has one single floor price, which depicts the least price a collector is likely to pay to join the community.

The OpenRarity protocol previously ranked NFTs without factoring in the rarity of the NFT in its specific collection. One investor was quick to point out that this could be misleading.

“On OpenSea it just displays as a number in the collection view (#), then in the individual listing it just says “Rank x/x). Not Rarity, but Rank. It doesn’t say rarity anywhere,” Spencer wrote.

Spencer also pointed out Kevin Rose’s Moonbirds collection, saying that since the collection integrated the OpenRarity ranking protocol, there had been no above-floor price sale of a single Moonbird NFT. This essentially exposed the protocol’s destruction of a very crucial factor, market dynamics.

The forces of demand and supply can help drive the price of a product above the base level (for the sake of NFTs, above the floor price).

OpenSea has since made revisions to OpenRarity, with the protocol now able to display NFTs and their rarity rank. The platform also added rarity count, another feature that the community highlighted in their feedback.

The platform announced that it will be rolling out the OpenRarity protocol to all the supported blockchains, allowing all collections to integrate their ranking feature.

OpenSea said the change will take effect beginning October 25, with several people asking how they could gain access.

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