NFT Jargon Every Collector Should Be Familiar With
Prepare yourself for the world of NFT trading by acquainting yourself with our beginner-friendly glossary.
Non-fungible tokens (NFTs) have witnessed a surge in popularity in recent years, spawning dedicated communities and passionate collectors. With the expansion of these communities, a unique lexicon has evolved to describe various personas, projects, and trading practices within the NFT realm.
For newcomers to the NFT scene, it’s essential to grasp the colloquialisms frequently used by NFT traders on social media platforms. If you’re embarking on your journey into this exciting domain, here are the terms you need to grasp to gain a deeper understanding of the NFT market.
The Complete Beginner's NFT Lexicon
- Airdrop: The allocation of cryptocurrencies or NFTs into an individual’s private crypto wallet at no cost. NFT projects often distribute airdrops to existing community members or individuals who complete various tasks on social media.
- Alpha: Pertains to privileged information about an NFT project that can provide traders with a competitive edge. Alpha groups are typically formed to confidentially share exclusive insights.
- Allowlist: A roster of wallet addresses compiled by an NFT project before minting, ensuring certain individuals secure a spot. Occasionally referred to as a “whitelist,” though this term is less common.
- AMA: An acronym for “Ask Me Anything.” NFT creators frequently host these question-and-answer sessions on social media platforms such as Twitter, Discord, or Reddit.
- Ape: To “ape” into an NFT project signifies purchasing a token shortly after its launch without conducting comprehensive research. Additionally, “APE” may allude to the Ethereum-based ApeCoin token, which powers the Bored Ape Yacht Club ecosystem.
- Axie: A playable NFT character featured in Sky Mavis’ popular blockchain-based game “Axie Infinity.”
- BAYC: An abbreviation for the renowned NFT collection “Bored Ape Yacht Club,” established by Yuga Labs in 2021. Other projects within the BAYC ecosystem share similar abbreviations, including Mutant Ape Yacht Club (MAYC) and Bored Ape Kennel Club (BAKC).
- Blue chip: A term used to characterize top-tier NFT projects expected to remain stable and profitable in the long term.
- Burn: “Burning” an NFT entails removing that specific token from circulation by storing it in a wallet inaccessible to anyone. NFTs may be burned in exchange for a physical item or as an enhancement to an existing NFT.
- CryptoKitties: Introduced in 2017 by Dapper Labs, CryptoKitties was one of the earliest successful NFT games on the Ethereum blockchain. At one point, the demand for CryptoKitties was so substantial that it caused significant congestion on the underlying Ethereum blockchain.
- Curated NFT marketplace: A platform that exclusively offers NFTs carefully selected and rigorously screened by the platform. Notable examples of curated NFT marketplaces include SuperRare and Nifty Gateway.
- Degen: Slang for “degenerate,” denoting an NFT trader who engages in speculative token acquisitions.
- Diamond hands: Describes the practice of holding onto a digital asset, such as an NFT, regardless of external pressure to sell, with the anticipation that its value will appreciate over time.
- Drop: An NFT “drop” refers to the date when an NFT collection becomes available for minting on a blockchain.
- ENS: An abbreviation for “Ethereum Name Service.” These are NFT domain names facilitating simplified and personalized Ethereum wallet addresses ending in “.eth,” replacing lengthy combinations of random characters.
- ERC-20: The standard for fungible tokens on the Ethereum blockchain.
- ERC-721: A token standard on the Ethereum blockchain tailored for NFTs, enabling fundamental functions for tracking and transferring NFTs.
- ERC-1155: Sometimes referred to as the multi-token standard, ERC-1155 represents an updated version of the ERC-721 code. It permits batch transfers and encompasses a blend of fungible, non-fungible, and semi-fungible tokens.
- Flip: A term signifying the acquisition or minting of an NFT at a low cost, followed by rapid resale on the secondary market for profit.
- Floor price: The lowest price at which a buyer is willing to acquire an NFT within a specific collection. Often used as an indicator of a collection’s popularity, although holders of a project can manipulate the floor price to create a perception of greater value.
- Fractional NFTs: The process of dividing an NFT into smaller components, enabling multiple individuals to invest in a particular digital asset. This procedure involves creating fungible (ERC-20) tokens linked to the underlying non-fungible (ERC-721) tokens.
- Fungible: Pertains to a token’s interchangeability with another token. In contrast, non-fungible denotes a token that cannot be replicated.
- Gas fees: A transaction fee on a blockchain paid to network validators during NFT trades.
- Generative art: An art form employing autonomous systems or algorithms to randomly generate content, gaining popularity among NFT collectors and creators through platforms like Art Blocks.
- Gm/gn: Abbreviations for “good morning” and “good night,” frequently employed as greetings among NFT traders on social media.
- HODL: Originally stemming from a typo of “hold,” HODL has evolved into an acronym for “Hold on for Dear Life.” It serves as a term of encouragement among traders, promoting the retention of NFTs regardless of market conditions.
- JPEG: Short for “joint photographic experts group,” this standard format for digital images is often used for art NFTs.
- Liquidity: Denotes the capacity to exchange your NFT for cash.
- Metaverse: Immersive virtual realms that frequently utilize NFTs.
- Metadata: A dataset describing the attributes of an NFT, often including its description, total supply, traits, and creation date.
- Mint: The process of transforming a digital file into an NFT by recording it on the public ledger of a blockchain. This conversion converts art, video, or audio files into verifiable NFT collectibles.
- Mooning: Slang terminology for a rapid increase in the value of an NFT or cryptocurrency asset.
- Music NFTs: NFTs linked to audio files.
- Non-curated NFT marketplace: Also known as “open NFT marketplaces,” these are platforms where anyone can purchase, bid, and mint NFTs. Prominent examples of open NFT marketplaces include OpenSea, Rarible, and LooksRare.
- One-of-one (1:1): Describes an NFT that is unique and available only as a single edition.
- Open Edition: Refers to an NFT that can be minted in limitless quantities within a predefined timeframe.
- OpenSea: Launched in 2017, it ranks among the largest NFT marketplaces.
- PFP: An abbreviation for both “profile picture” and “picture for proof.” The term alludes to the utilization of NFT avatars as profile pictures on social media. Many collections, including CryptoPunks, adhere to this style and are often distributed in batches of 10,000 NFTs with varying rarity traits.
- Play-to-earn: A category of blockchain games employing NFTs to represent in-game assets, also sometimes referred to as “GameFi.”
- RTFKT: Pronounced “artifact,” RTFKT is a London-based studio that gained widespread attention after sports apparel brand Nike acquired it in 2021. RTFKT is renowned for its sneaker NFTs and its PFP collection, CloneX.
- Rug Pull: Signifies a common scam in the crypto sphere where project creators vigorously promote it and then vanish with investor funds.
- Royalties: Fees expressed as a percentage paid to the creator of an NFT project each time an NFT is sold.
- Sniping: A term denoting techniques used to identify an NFT listed below its actual value.
- Sweeping: Also known as “sweeping the floor,” this involves acquiring numerous NFTs within a collection, often at the project’s floor price, in the hope of increasing the project’s overall value.
- Smart contract: A program stored on the blockchain that automatically executes when specific conditions are met, eliminating the need for an intermediary. NFTs are minted via smart contracts, which can assign and transfer ownership upon NFT sale.
- Soulbound tokens: Non-transferable NFTs linked to an individual’s identity.
- Traits: The various characteristics distinguishing NFTs within a collection. NFT collectors often categorize NFTs based on attributes to assess their rarity and value. For instance, only nine CryptoPunks exhibit alien traits, making CryptoPunks with alien features more valuable than those with human traits.
- Tokenize: The conversion of real-world, tangible assets into digital form for trading, often accomplished via NFTs. Examples include land deeds and physical goods.
- Utility NFTs: NFTs offering tangible real-world benefits or experiences. For instance, certain NFTs serve as event tickets or provide access to private social media channels.
- WAGMI: An abbreviation for “We All Gonna Make It,” an optimistic phrase commonly used within the NFT space. Conversely, NGMI stands for “Not Going to Make It” and expresses a pessimistic outlook toward an NFT project.
- Wash trading: Refers to the practice of buying and selling an NFT between two parties who are either the same or collaborating to manipulate trading data.
- Wearable NFTs: Clothing or accessories sold as NFTs that playable avatars can wear in blockchain-based games.
- Web3: A term coined by Ethereum co-founder Gavin Wood in 2014, referring to the next evolution of the internet, characterized by decentralization, blockchain technology, tokenized economies, and user-controlled data.