Cryptocurrency NFTs and Digital Assets 2

Question 1

What is the 'floor price' of an NFT collection?

Accepted Answer

The lowest listed price for any NFT currently available in that collection

Answer

Floor price represents the cheapest NFT available in a collection on a marketplace, serving as the baseline entry point for buyers and a key market health indicator.

Question 2

What role does IPFS (InterPlanetary File System) play in NFT infrastructure?

Accepted Answer

It provides decentralized storage for NFT media files referenced by on-chain metadata

Answer

Because storing large media files directly on-chain is cost-prohibitive, NFT metadata typically points to IPFS — a decentralized content-addressed storage network — to host the actual images or files.

Question 3

What is 'wash trading' in NFT markets?

Accepted Answer

A seller buying their own NFTs repeatedly to artificially inflate volume and price

Answer

Wash trading involves transacting with oneself or colluding parties to simulate trading activity, misleading buyers about an NFT's demand and price history.

Question 4

What is a 'generative NFT' collection?

Accepted Answer

NFTs programmatically assembled from trait layers using algorithms, producing thousands of unique combinations

Answer

Generative NFT collections — like CryptoPunks and Bored Apes — use code to randomly combine visual traits (background, eyes, clothing) to produce thousands of distinct but thematically related tokens.

Question 5

What is 'token gating'?

Accepted Answer

Restricting access to content, events, or communities based on NFT or token ownership

Answer

Token gating uses ownership of a specific NFT or token as an access key, granting holders exclusive entry to communities, content, events, or features.

Cryptocurrency Practice Test

Cryptocurrency Practice Test

Cryptocurrency NFTs and Digital Assets 2