What is Sweeping the Floor in NFT?
Since the dawn of the first NFT called Quantum in 2014, many others have followed, and we’ve witnessed massive growth in the NFT landscape. Year-round, new NFT collections launch, attracting the masses.
Bored Ape Yacht Club (BAYC) launched its first NFT collection in 2021, garnering millions of dollars. Since then, investors have constantly been watching NFT collections with lucrative prospects. This is where the idea of sweeping the floor comes in.
Sweeping the Floor NFTs
Sweeping the floor in NFTs refers to purchasing NFTs at their floor prices. What is the floor price? NFT floor price is the lowest price to buy a particular NFT. It is the lowest price offered by the NFT seller.
Now, this is where the notion of sweeping the floor comes in. Floor sweeping involves purchasing minted NFTs at the lowest price set by the seller. An investor does not buy a single NFT. Instead, in NFT floor sweeping, you purchase an entire collection released by a particular project.
So, How Does this Work?
In standard cases, traders in financial markets operate with Fear of Missing Out (FOMO). FOMO is triggered when there seems to be a lovely project that every investor seems to be interested in. Investors generally fear missing out on such incredible opportunities. NFT projects, devs, and floor sweepers often want to maximize investors’ FOMO.
NFT projects will encourage some of its community members to sweep the floor. The projects do vast marketing inviting many participants for an NFT sale. The project will begin by announcing the minting dates for the entire collection.
Moreover, the NFT project will attract as much hype as possible for this new collection. They can do so using social media marketing on platforms like Twitter and Discord. Making the NFT collection trendy increases investors’ FOMO. The NFT project will also instantly announce the minting dates.
In their daily investment research, floor sweepers use tools like NFT calendars to identify NFT collections with upcoming mints. The investor will thoroughly research the project, make their decision, and even set reminders for the minting date.
If they deem the collection lucrative, the investor will deploy autonomous systems (searcher bots) to purchase all the NFTs immediately on mint. Remember, the process is automated and instantaneous, not to draw anyone’s attention.
Once they purchase all the NFTs, the investor may start planning to sell them off. Since the collection owner already built massive hype, many investors have FOMO. The demand for NFTs continues to go high while one individual or group controls the supply. This triggers enormous price surges for the NFT. The NFT collection holder can now sell the NFTs at massive profits.
Why Do NFT Investors Sweep the Floor?
There are many reasons NFT maximalists may choose to sweep the floor. The main reasons include;
Maximize Prices
The whole reason behind sweeping the floor is to acquire NFTs at their floor prices and sell them at high prices. Therefore, the primary motivation for sweeping the floor is gaining maximum profits.
Save on Gas Fees
The second reason investors sweep the floor is to save on trading fees. Ethereum blockchain is the largest home for NFT contracts. But, the biggest problem with Ethereum has always been the gas costs. The gas charges involved in NFT transfers are super high. So, how can you deal with it? Sweeping the floor! When you buy the NFTs in bulk, you save on gas charges.