The Fungibility of Non-Fungible Tokens: A Quantitative Analysis of ERC-721 Metadata

• URL: http://arxiv.org/abs/2209.14517v1
• Date: Thu, 29 Sep 2022 02:33:31 GMT
• Title: The Fungibility of Non-Fungible Tokens: A Quantitative Analysis of ERC-721 Metadata
• Authors: Sarah Barrington, Nick Merrill
• Abstract summary: Non-Fungible Tokens (NFTs) have until recently been traded on a highly lucrative and speculative market. An emergence of misconceptions, along with a sustained market downtime, are calling the value of NFTs into question. This project describes three properties that any valuable NFT should possess.
• Score: 9.812718050900918
• License: http://creativecommons.org/licenses/by/4.0/
• Abstract: Non-Fungible Tokens (NFTs), digital certificates of ownership for virtual art, have until recently been traded on a highly lucrative and speculative market. Yet, an emergence of misconceptions, along with a sustained market downtime, are calling the value of NFTs into question. This project (1) describes three properties that any valuable NFT should possess (permanence, immutability and uniqueness), (2) creates a quantitative summary of permanence as an initial criteria, and (3) tests our measures on 6 months of NFTs on the Ethereum blockchain, finding 45% of ERC721 tokens in our corpus do not satisfy this initial criteria. Our work could help buyers and marketplaces identify and warn users against purchasing NFTs that may be overvalued.

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