“Sweep the floor” or “Sweep the floor” is about detecting the best and most profitable floor price or minimum price in the NFT collections of any project in the industry.
As a result of the adoption, awareness and use of NFTs as speculative assets, several successful collections have been created, generating millions of dollars, such as Yuga Labs’ Bored Ape Yacht Club or Chiru Labs’ Azuki. In addition, since the creation of the non-fungible token markets, approximately $400 million in total sales have already been moved. Although the market has fallen since May 2022, the best collections remained around 70 ETH.
All this data and knowledge is piquing the interest of enthusiasts and investors who are looking for the next successful collection. This is where the business strategy I’m going to talk about today comes into play: “Sweep the floor”.
At NFTexpress we are always at the forefront of news or developments that arise in the NFT ecosystem and we notice how this industry behaves similarly to the commodities market (supply and demand), but there is a big difference and that is that the market for non-fungible tokens is decentralized, one of the most positive features for users who want to buy digital assets without the need to provide sensitive and private data to centralized entities that run the risk of suffering different vulnerability problems.
On the other hand, the floor price is the fundamental metric in the non-fungible token market and pricing in NFT collections is organic. Consequently, this means that if the project gains public attraction, more people become desperate to buy the assets in an NFT collection, which generally consists of 10,000 non-fungible tokens, and the more users buy, the higher the floor price rises.
At the time of writing, the “Doodles” collection is first in terms of the volume obtained in the last 24 hours and it can be clearly seen that its floor price, i.e. the minimum price of an NFT for which a user is willing to sell, is 8.25 ETH. Considering that the NFT markets operate 24 hours a day and 7 days a week, the floor price of any project can increase or decrease rapidly.
What affects the floor price of an NFT collection?
It is worth noting that although price floors can increase or decrease rapidly, this is an infrequent occurrence. One of the best tools to research and keep in mind when “sweeping the floor” is NFT PRICE FLOORNFT data aggregator, an NFT data aggregator that aims to track minimum prices, volume, sales, among much more data from the NFT collections that appear in the market.
Rock bottom prices are easily triggered by the purchase of NFTs by a celebrity, company or even by the announcement of a partnership between collections and organizations.
For example from the NFT PRICE FLOOR tool we can see that on March 12, 2022 the floor price of Meebits increased by 45% reaching 6.1 ETH.
Yuga Labs, creator of the renowned Bored Ape Yacht Club collection, had announced in their Official Twitter that it acquired the CryptoPunks and Meebits collections, both projects owned by Larva Labs up to that point. Think of it as Nike announcing the purchase of Adidas. Obviously the valuations of the three collections in question were bound to skyrocket dramatically.
On the other hand, the trading volume which as you can see in the image was at 529,726 ETH is a sign of the interest in the NFT collection and just like the minimum price, the trading volume is incited by different events, collaborations and social media announcements by the collections.
Consequently, if the volume is high it is a clear indication of high liquidity and means that there are more potential investors or users willing to buy or sell the NFT at certain price levels.
Floor sweeping = FOMO
FOMO which comes from the acronym of “Fear of missing out” or in English “Fear of missing something” is used repeatedly in the ecosystem of NFTs and any financial asset. In the market of non-fungible tokens the FOMO aims to constantly look for the next successful collection, i.e. to choose the NFT that is top-notch before it is.
This is where the commercial strategy of sweeping the floor comes in.
Floor sweeping NFT
The “Sweep the floor” concept focuses on NFT buyers being able to purchase the NFTs at their minimum price and this can be achieved if the buyer closely follows the project before it is minted and released for public sale.
Tools such as NFT Calendar o NFT Drops Calendar are used to sweep the floor. Their usefulness lies in tracking upcoming mintages.For their part, the people behind the projects are often activated on social networks, usually on the Twitter and Discord platforms with the aim of gathering an army of FOMO.
Currently, the last clear example in the field of FOMO was goblintownwhich to my mind is one of the few 10,000 NFT generative collections that looks like every non-fungible token was handmade.
Both the goblintown community and its creators caused a great stir and in only 6 days since its public sale its floor price had gone from 1.3 ETH to 5.7 ETH. Currently the minimum price is at 0.98 ETH.
Another tool that floor sweepers use is the implementation of search bots that buy all available NFTs. These strategies that NFTs traders implement can attract profits, but it also consists of a huge risk because for example, if a trader sweeps the floor and then cannot sell the NFTs, he is left with the digital assets he got, but without any value.
In addition, beyond making a profit on future sales, floor sweepers in the NFT industry can save gas fees, since, transactions are bundled and counted as unique, but the reality is that there are dozens of non-fungible tokens.
Also, buying NFT in quantity by sweeping the floor can save approximately 40% on gas rates.
One of the tools to generate these benefits can be, for example, an NFT aggregator that offers several possibilities as I have described above. GEMA GEM aggregator, an NFT aggregator that offers several possibilities like the ones I described above.
While this tool is effective, it is still a manual mechanism that slows down transactions and causes merchants to compete in a race with the same ideas. As a result, NFT floor sweepers often use “automated sniper” bots that aim to detect collections in a pre-coin state. There are bots for each specific blockchain type, as, a bot that works on the Ethereum blockchain will not work on the BNB Chain. There are many such tools, here you can see a floor price bot for the Solana network in a GitHub repository.
The concept of floor sweeping in the NFT industry can be thought of as a classic trade that resells products. In this case, when applied to the digital asset ecosystem, more sophisticated tools are used instead of going to a corner to get the job done. However, when we talk about the potential profits and the tough virtual competition behind this industry of finding the next “gold” NFT, all means and tools that are allowed are used with the eagerness to win the NFT trading battle.
Finally, to clarify that this note is informative in nature and the content presented should not be construed as legal, commercial, investment or any other non-informative advice. The only thing I recommend is to do your own research and uses of tools and applications, as, any wrong activity done may put your funds at risk. Do not use or interact with smart contracts without knowing their provenance or intentions.
Written by Rodrigo Catalan (TW: @RodrigoCatalanB) for NFT Express.