NFT Art Marketplaces and Trading Mechanics Questions and Answers

Question 1

A collector is trying to buy a popular, newly-released NFT on a secondary marketplace.
They notice that the price they paid was slightly higher than the price they clicked on just moments before.
What is this phenomenon called?

Accepted Answer

Slippage

Answer

Price Impact

Answer

Gas War

Answer

Floor Fluctuation

Question 2

An NFT project wants to sell 5,000 items from its collection and ensure a fair and efficient price discovery process, while also mitigating the risk of a gas war. They decide on an auction format where the price starts high and systematically decreases over time until a buyer accepts the current price. Which auction type did they choose?

Accepted Answer

Dutch Auction

Answer

English Auction

Answer

Sealed-Bid Auction

Answer

Vickrey Auction

Question 3

Which of the following best describes the primary function of an NFT aggregator platform?

Accepted Answer

To pull listings from multiple NFT marketplaces into a single interface for easier comparison and purchasing.

Answer

To provide decentralized storage for NFT metadata and assets.

Answer

To create and deploy smart contracts for new NFT collections.

Answer

To offer insurance policies for high-value NFT assets against theft or loss.

Question 4

A trader is analyzing the on-chain history of an NFT collection and notices a wallet that has bought and sold the same NFT multiple times in a short period, each time at a slightly higher price. This activity has artificially inflated the collection's trading volume and average sale price. What is this manipulative practice known as?

Accepted Answer

Wash Trading

Answer

Airdropping

Answer

Floor Sweeping

Answer

Shill Bidding

Question 5

What is the primary purpose of the EIP-2981 standard in the NFT ecosystem?

Accepted Answer

To create a universal, on-chain way for NFTs to signal royalty payment information to marketplaces.

Answer

To enable the batch transfer of multiple ERC-721 tokens in a single transaction.

Answer

To allow smart contracts to be upgradeable after deployment.

Answer

To define the metadata structure, ensuring compatibility across different wallets and platforms.

Question 6

A decentralized NFT marketplace does not use a traditional list of buy and sell orders to facilitate trades. Instead, it relies on liquidity pools and a mathematical formula (like x*y=k) to determine asset prices based on the ratio of assets in the pool. What is this type of trading mechanism called?

Accepted Answer

Automated Market Maker (AMM)

Answer

Off-Chain Order Book

Answer

Peer-to-Peer (P2P) Matching

Answer

Central Limit Order Book (CLOB)

A collector is trying to buy a popular, newly-released NFT on a secondary marketplace.They notice that the price they paid was slightly higher than the price they clicked on just moments before.What is this phenomenon called?

A collector is trying to buy a popular, newly-released NFT on a secondary marketplace.
They notice that the price they paid was slightly higher than the price they clicked on just moments before.
What is this phenomenon called?