How do NFTs get their value?

The foundation of how NFTs get their value is akin to any other economic asset. The more limited the supply, the higher its value.

Add uniqueness and the ‘one-of-a-kind’ narrative into the mix, and you get Beeple’s $69 million Everydays - The First 5000 Days.

According to Hugo Chang, from Columbia Business School, there’s a simple formula that can be used to define the value of an NFT.

Value of an NFT = Utility + Ownership History + Future Value + Liquidity Premium

Euro 2020 NFT tickets, for example, have low future value but high utility – the ability to use it for watching matches. A IRL application.

NFTs from SuperRare, on the other hand, have low utility, but ‘medium’ future value.

How would you value a NFT? Which projects have the most potential to increase in value over time?