Podcast on "Market Microstructure of Non Fungible Tokens"
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Description
This podcast explores the dynamics of the NFT market by examining its structure, price formation, transparency, and susceptibility to manipulation. The authors, Mayukh Mukhopadhyay and Kaushik Ghosh, also discuss legal considerations surrounding NFTs, including their potential classification as securities under the Howey Test, intellectual property implications, and the impact of taxation. The paper concludes by highlighting the various potential applications of NFTs and emphasizing the need for responsible development and ethical practices within the growing ecosystem.
Connected to paperThis paper is a preprint and has not been certified by peer review
Market Microstructure of Non Fungible Tokens
Mayukh Mukhopadhyay, Kaushik Ghosh
AbstractNon Fungible Token (NFT) Industry has been witnessing multi-million dollar trade in recent times. With rapid innovation of the NFT market environment by technology, innovation, and decentralization, it is becoming hard to distinguish between genuine NFT from fads and scams. This article discuss the NFT market microstructure, with a focus on price formation, market structure, transparency, and applications to other financial areas. Market manipulation in NFT market with the context of wash-sale patterns has also been surveyed. The article concludes by providing pointers on due-diligence activity that can be adopted by investors to mitigate NFT trading risk.