NFT Marketplaces and Trading Mechanics 3 — Questions and Answers
Question 1: What is 'sweeping the floor' in NFT trading?
- Removing low-quality NFTs from a marketplace
- Bulk-buying the cheapest listings in a collection (Correct answer)
- Reporting fraudulent listings to the platform
- Setting a new floor price as a seller
Correct answer: Bulk-buying the cheapest listings in a collection
Sweeping the floor means purchasing multiple lowest-priced NFTs at once, which raises the collection's floor price.
Question 2: What happens to an NFT listing when a collection is 'delisted' from a major marketplace like OpenSea?
- The NFT is burned and destroyed permanently
- The NFT still exists on-chain but loses visibility and trading volume on that platform (Correct answer)
- The NFT is automatically transferred to the creator's wallet
- The smart contract is voided
Correct answer: The NFT still exists on-chain but loses visibility and trading volume on that platform
Delisting removes the collection from marketplace search and discovery, but the NFT remains on the blockchain and can still be traded elsewhere.
Question 3: What is a 'reserve price' in an NFT auction?
- The gas fee reserved for the transaction
- The minimum price the seller will accept for the NFT to sell (Correct answer)
- The maximum price a bidder can offer
- The price at which royalties are calculated
Correct answer: The minimum price the seller will accept for the NFT to sell
A reserve price is a hidden or disclosed minimum threshold; if bidding doesn't reach it, the seller is not obligated to complete the sale.
Question 4: How do marketplace aggregators like Gem or Blur benefit NFT buyers?
- They create new NFT collections automatically
- They allow buyers to purchase NFTs from multiple marketplaces in one transaction (Correct answer)
- They provide free NFT insurance
- They offer zero-royalty minting
Correct answer: They allow buyers to purchase NFTs from multiple marketplaces in one transaction
Aggregators pull listings from multiple platforms, letting buyers fill carts across marketplaces and save on gas by bundling purchases.
Question 5: What is 'bid sniping' in timed NFT auctions?
- Canceling a bid at the last second
- Placing a winning bid in the final moments before an auction ends (Correct answer)
- Reporting another bidder for suspicious activity
- Automatically matching the highest bid
Correct answer: Placing a winning bid in the final moments before an auction ends
Bid sniping involves placing a higher bid seconds before auction close, leaving little time for competitors to respond.
Question 6: On Ethereum-based marketplaces, what is 'WETH' and why is it used for NFT bids?
- A wrapped version of ETH that enables making offers without actively monitoring the sale (Correct answer)
- A stablecoin pegged to ETH's price
- An ERC-20 governance token for OpenSea
- A layer-2 version of ETH for cheaper transactions
Correct answer: A wrapped version of ETH that enables making offers without actively monitoring the sale
WETH (Wrapped ETH) is an ERC-20 token equivalent to ETH that allows pre-authorized bids on NFTs, so the funds are ready when a seller accepts.
Question 7: What does '1/1' mean when describing an NFT artwork?
- The NFT was minted on January 1st
- A unique, one-of-a-kind piece with no editions or copies (Correct answer)
- The first part of a multi-part series
- An NFT with a 1% royalty rate
Correct answer: A unique, one-of-a-kind piece with no editions or copies
1/1 (one-of-one) means the artwork was minted as a single unique token with no duplicates, maximizing its scarcity.
NFT Marketplaces and Trading Mechanics 3
What is 'sweeping the floor' in NFT trading?