SEOUL, Sept. 14 (Korea Bizwire) — Concerns are rising over investment in non-fungible tokens (NFTs), which have been gaining attention since last year, alerting investors that high fluctuation in prices and commission rates may result in a less-than-expected profit, a report said Tuesday.
The Korea Institute of Finance reported that the non-fungible features of NFTs strictly limit thir supply, exposing them to a risk of heavy price fluctuations led by biased demand from the fandom.
The report also said that NFT investment is highly hazardous, alerting investors that profits are not guaranteed and that they are just as likely to suffer from huge losses.
“Changes in fandom demand may cause prices to spike or plunge unexpectedly,” the report said.
As fragmented investment becomes possible, more investors may sustain losses caused by price plunges, the report added.
The report also said that it is customary for NFT developers to offer early bird purchases of new NFTs to their core followers at cheaper prices prior to their official release, calling the market an unlevel playing field.
“In a recent case of newly issued NFTs called The Sevens, there were more than 26,000 cases of failed transactions occurring within the first 60 minutes of the auction, generating commission fees of more than US$4 million,” the report said.
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