In recent days, nonfungible token pricing platform PawnHouse has become a highly sought-after project, receiving capital from top investment firms such as Huobi Ventures, A&T Capital, Spark Digital Capital and Crypto Times.
NFTs possess enormous market potential and numerous applications. Compared with fungible token assets, NFTs can have personalized, irreplaceable traits, as well as possess unique value. However, because of the unique nature of each NFT, the circulation of NFTs has been limited. There are uncertainties as to their value and total potential supply, causing hesitation among investors. What the market needs now is an NFT pricing infrastructure that can provide consensus-driven pricing. This can establish broader market confidence in NFTs across the board.
PawnHouse proposes the concepts of “private value” and “common value,” which can help investors make sense of how to value NFT assets. Private value refers to the final deal price at which a buyer is willing to provide at a particular time, independent of other bidders’ valuation. However, there are still uncertainties on whether an asset can gain more value and rapid circulation at present valuations.
So, how does PawnHouse price NFT assets and support their liquidity? By utilizing the Nobel Prize-winning simultaneous multi-round auction format, PawnHouse has more data to solidify accurate pricing. Under this model, multiple auction rounds and quotes from rational participants can help generate the highest deal price (the private value), as well as an effective price range (the most concentrated range of quotes, or common value) at the same time.
This innovative cross-border application applies real-world-tested pricing theories to the NFT field. Within this, it also introduces the two concepts of what PawnHouse calls “consensus value” and “price consensus.” Both help solidify a more accurate valuation of an NFT’s price by identifying data in the present and forecasting for the future. For example, the price consensus of NFT assets indicates the consensus range for the asset, whereas the “highest deal price” shows the highest private value accepted under the current scope and the “price range” displays the effective quotation information of the market for this type of asset overall.
Because both forces help users grasp a more holistic price perspective, assets priced through PawnHouse can get the highest private quotations on the market. At the same time, the price range data obtained under this mechanism will also help calibrate future prices for this particular asset, as well as others similar to it. To reiterate, PawnHouse combines the concept of “consensus value” with NFT asset pricing and builds a price range for NFT assets by obtaining more effective market quotation information. In addition, through its binding incentive mechanism, the information provider and NFT asset form a mutually beneficial relationship that creates usable value and incentivizes the accuracy of asset pricing.
PawnHouse’s v1.0 has already launched and users can provide price quotations for NFT assets in the form of NFT-collateralized loans. In the future, PawnHouse will look to incorporate multidimensional price information to reflect asset values. Effective pricing has become a critical factor in establishing NFT liquidity and solving this problem will motivate more investors to participate in the NFT market. This will profoundly impact the circulation of NFT assets and will enable the market to determine more complex NFT asset circulation patterns. Because of all this, constructing NFT pricing infrastructure has become a key requirement for capital deployment. Projects that can provide NFT assets with effective quotes set by the market consensus will significantly accelerate the evolution of the NFT ecosystem.
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