An NFT project has found an ingenious way, although suspect as hell, to manipulate the floor price of their NFTs collection.
Kaiju Kingz is a new NFT project that has found a novel way to artificially raise the floor price of its NFTs. How?
Well. they will destroy all NFTs which are listed below the price that they deem suitable for a given market day.
It works like this. The sale will last 6 days. Each day the floor price will double in price, as it is written on the burn schedule they released. For example on 20 March the floor price will be 0.16ETH. If you listed a Kaiju Kingz NFT on that day for 0.10ETH, then nothing will save you, it will get burned.
But to better understand the importance of this action as a precedent, we ought to have a general idea on the significance of the floor price and the NFT burn mechanism.
The floor price is one of the most important parameters to gauge a project’s value. So it is understandable that many projects try to inflate this initial price by using different tactics.
Now, when NFTs are released, they are released as a collection. Sometimes, an NFT project which for example has 10.000 NFTs in its collection, and wants to raise the overall price, will burn a percentage that they deem suitable. It’s not that they will remove them from blockchain, that is impossible. They just send them to inaccessible addresses, often known as black hole wallets.
But the Kaiju Kingz burn mechanism is quite unique. They have released a burn schedule, which progressively doubles every day. The thing is that not only the seller can lose, but also the buyer. If they are not careful, they and their investment might get sodomized as well.
If they bought a Kaiju Kingz NFT on 22 march for 0.50ETH, when the lowest threshold according to the posted schedule is 0.64ETH, then the NFT they bought will get burned.
But how can they sell your NFT, for which you paid? Well, through the smart contract, they can do pretty much anything that the websites in which they have published their collections, allow them to do so.
This move generated quite some controversy, because after all it is a precedent, a first of its kind. Some people described it as an “illegal market manipulation tactic”.
No Shit Sherlock!
Price manipulation thrives in this market, and even though it is not illegal (yet), the responsible NOSHITTER should do their own research, or become a member of the NOSHIT community, and together learn how to safeguard yourself against these tactics, how to overcome them, and at some point, why not, make the manipulators work to your advantage.
Crypto space is still like the wild west, and here Caveat Emptor (Buyer Beware) is the rule.
Hunter S. Shitson
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