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FP: Floor Price
Lowest sale price recorded on the blockchain during the determined time window
It provides the lowest sale price of an NFT collection, recorded on the blockchain during a given time window. While it is the simplest mechanism for determining a collection’s value, it is also not the safest, as it can be manipulated by malicious market actors.
As such, manipulations can have a drastic effect on apps built on top of a collection’s price feed, and therefore the right filtering mechanisms become imperative in order to produce market-representative prices.
Two common market manipulation techniques are wash trading and sweeping the floor.
Wash trading is a form of market manipulation where investors create fictitious transactions designed to look like legitimate trades.
On the other hand, sweeping the floor consists of buying a batch of a collection’s NFTs in the floor price range. As a consequence, the floor price based on the lowest ask price increases, which enables actors for instance to then sell at a higher price. This is usually done with automated bots.
By its very nature, a floor sweep impacts the floor price based on the lowest ask price, while the floor price based on actual trades data, such as is used at DIA, is not affected.
In order to supply dApps with more realistic and reliable NFT floor prices, DIA xFloor offers advanced methodologies for pricing: