The sweet spot of NFTs! In which price range is it most likely to increase by 10 times?

The venture capital firm A16Z recently compiled data on the minting of the top 150 NFT series on OpenSea, analyzing at which price range the multiples of increase were the highest. They also looked at the relationship between early NFT team revenue and subsequent market performance.

Highest Yielding Minting Prices

When a series of NFTs is released, the minting price is often the focus of community attention. Assuming there is enough demand, a higher minting price can bring in higher revenue for the team upfront. However, higher prices may hinder liquidity in the secondary market, resulting in reduced income from royalties for the team.

According to data, NFT series with minting prices greater than 0.25 ETH rarely achieve returns of over 10x. Only two series have successfully done so: Azuki, with an average minting price of 0.94 ETH, and Invisible Friends, sold at a fixed price of 0.25 ETH. As of the deadline, Azuki's floor price is 22 ETH, while Invisible Friends is at 6.7 ETH.

Additionally, NFT series with minting prices in the 0.05-0.1 ETH range perform the best, with 13 series growing 5-10x and 24 series growing over 10x.

Note: Only series with minting prices > 0 and quantities > 3,000 are selected.

Initial Sales Amounts and Market Performance Are Inversely Proportional

From the table below, it can be seen that projects with higher initial sales amounts tend to perform worse in the later market, showing a clear negative correlation. A16Z provides two possible reasons:

1. It is more difficult to double when the base is larger, meaning it is easier for a price to go from 0.02 ETH to 0.2 ETH than from 0.50 ETH to 5 ETH.
2. Teams that receive a large amount of early income may be less inclined to commit to the long-term success of the project. This is similar to founders of startups receiving excessive salaries. If a founder has already received a generous salary, why bother with years of effort to solve the hassles of business construction?

Furthermore, A16Z also analyzed the relationship between initial sales amounts and secondary market performance. Although the correlation is not as pronounced as in the above figure, a slight negative correlation can still be observed. This proves that many projects that raised less funds in the minting stage have greater appeal in the secondary market.

Impact of Minting Limits on Market Performance

During the minting stage, teams often set minting limits to prevent excessive minting from a single address. However, does minting restriction really help market performance?

From the figure below, it seems that the answer to this question is negative. Many well-performing projects allow a single address to mint many during the minting process, including some blue-chip projects like Meebits, Doodles, and Cool Cats.

The above data summarizes the details of minting limits on future performance. However, each NFT series is a unique piece of art and should not necessarily be viewed from an investment perspective. The benefits of being in a community you enjoy cannot be measured solely in monetary terms. Hopefully, this data can provide some recommendations for ambitious and idealistic teams before making critical decisions.

If you want to observe more data, you can visit the Dune Analytics data dashboard created by A16Z. Fill in the contract address at the top of the screen to see detailed data.