How NFT Traders Use Polymarket to Bet Against NFTs

Buying and selling NFT’s is big business, but how do you bet against NFT prices? You can’t on Opensea, but here’s how to do it on Polymarket.

6 min readJun 14, 2022

While the crypto downturn of Spring 2022 may not turn out to be the worst crypto crash in the technology’s brief history, it is the first since the widespread proliferation of NFTs. NFT stands for “non-fungible token,” a tradeable digital asset whose unique metadata and identification codes are stored on the blockchain.

NFT prices have collapsed in recent weeks. In fact, you would be hard-pressed to find anyone who has purchased and still holds the digital collectibles who hasn’t seen their value depreciate, as NFT prices have fallen across the board. Even some of the most aggressively hyped and highly prized NFT projects-the likes of Bored Ape Yacht Club, We Are All Going to Die, and -continue to shed value.

But traders who bet against those NFTs in the weeks prior to the crypto crash have profited handsomely from their bearish trades. So how do you bet against NFTs? On most platforms, it’s difficult or impossible to profit from NFTs when prices go down. On Polymarket, the world’s largest prediction market, betting against NFTs is simple.

PRO TIP: Learn how to use Polymarket to trade on NFT’s, politics, crypto, current events, and more. Read here to get started on Polymarket.

Betting on NFT floor prices with Polymarket

For any given NFT collection, the ‘floor price’ is the lowest recorded sale price for any individual NFT from the collection. Certain NFTs in a collection with rare or desired features might fetch higher prices-for example, Bored Ape #2087, the most valuable Bored Ape of all time, sold at one point for 769 ETH, equivalent to $2.3 million USD. By comparison, the floor price of Bored Apes has never risen above 154 ETH, equivalent to $420,000 at the time of the all (May 1st). As of June 13th, the floor price for Bored Apes was around 74 ETH or $93,000.

Bored Ape #2087

If you think that the floor price of a given NFT collection will drop below the threshold specified by the terms of its market on Polymarket, and if the floor price dips it on the day that the market is set to resolve, the market will resolve in your favor and you will earn money by being right. For example, If you were certain that the floor price of would be below 5 ETH on June 13th, you could have bought NO shares for 60 cents a few days earlier. When the market resolved on June 13th, those NO shares were worth 100 cents, a 67% profit in just a few days.

goblintown market on Polymarket

Polymarket empowers traders with superior knowledge of NFT markets to bet on their performance, without exposing themselves to the volatility, hassle, and risk of theft (via hacking) that buying NFTs often entails.

Why can’t you bet against NFTs on OpenSea?

OpenSea, the most popular NFT marketplace, saw its trading volume plummet by nearly half between April and May, according to data from decentralized applications tracker DappRadar. With no end to the current slump in sight, interest in novel methods for turning a profit from NFTs continues to grow among web3 enthusiasts, frustrated by the sight of their plunging portfolios.

Web3 skeptics, some of whom think NFTs will end up being worthless, may also be interested to learn there’s a simple way to bet on NFT prices falling further. After all, a large contingent of investors believes there’s no substantial difference between the Bored Ape bubble of 2022 and the Dutch tulip mania of the 1630s, when a speculative frenzy over rare tulips caused such severe price swings that individual flowers ended up selling for more than the price of an Amsterdam mansion. A lot of people like to hate on NFTs-now they can put their money where their mouth is and turn a profit if their skepticism turns out to be justified.

One of the most popular methods for profiting from the declining value of an asset is known as “short-selling,” or “shorting.” In traditional short-selling, a trader sells a borrowed asset that he thinks is on the verge of depreciating, and then buys it back later for a lower price, pocketing the difference. In practice, this notoriously risky maneuver might only be feasible when it comes to fungible asset classes, such as traditional equities or popular cryptocurrencies like Bitcoin or Ethereum, for which one share or coin is equal in value to, and otherwise interchangeable with, all others.

Many have wondered why OpenSea does not allow traders to place short bets on NFTs. The reason is not simply that OpenSea prefers for people to bet on NFT prices going up. The reality is that it might be prohibitively difficult to create a product that allows you to short NFTs given that every NFT, by definition, is unique and not interchangeable with others like it.

Shorting requires you to temporarily borrow an asset from a willing lender. It would be difficult to persuade someone to lend you an NFT for the purposes of short-selling it, without pledging a very high amount of another asset as collateral. There’s also a very high likelihood that, if the intended issuer of the NFT believes your prediction that it will soon lose value, they will simply sell it themselves in an attempt to preempt taking a loss. Finally, the person to whom you sell the NFT to could choose to hold it hostage and demand that you pay them any price they want, since they know that you are on the hook to buy it back from them.

With the stock market, short-selling is made possible by the existence of a professional stockbroker, a trusted intermediary who can facilitate and oversee the lending of an asset from one of his client’s portfolios to that of the short-seller. The web3 universe is still in the early stages of professionalization: most crypto and NFT traders are the sole custodians of their digital wallets, and therefore few corollaries to the traditional stockbroker exist . . . at least not yet.

Emerging protocols for betting on NFT markets

In the absence of the option to execute an old-fashioned short-sell on NFT marketplaces like OpenSea, a handful of new protocols have been devised in order to address the demand among traders to place NFT price predictions through secondary markets.

Mimicry, a derivatives liquidity protocol built on Polygon, allows traders to bet on markets that mirror the floor price of OpenSea NFT collections.

SynFutures’ NFT futures protocol makes use of a synthetic automatic market maker (sAMM) in order to constantly generate up-to-the-moment prices that mirror those of the relevant asset.

Both protocols are still in development. If or when the day comes that they are finally rolled out, their designs might pose considerable barriers to entry for the vast majority of crypto traders. For one, the futures markets built upon them never fully resolve to a particular outcome. Earnings and losses are distributed fractionally, on an ongoing basis. With no clear resolution timeframe, a trader might place a winning bet, though never earn profits if they fail to time their exit favorably. But perhaps most importantly, both protocols require traders to either stake or purchase a native token in order to place bets, a token whose own value could fluctuate wildly alongside macro trends in the crypto market at large.

Polymarket is the only fully operational way to bet on NFT floor prices through secondary prediction markets. Its markets resolve to unambiguous outcomes, payout quickly, and are flush with real liquidity. Bets are placed using USDC, whose value, being tied to the US dollar, is entirely stable from one moment to the next.

Another advantage is that the minimum entry price to Polymarket’s prediction markets is reasonably low; single shares always cost less than one dollar. This is a boon to traders who might have reason to believe that the value of a particular NFT will remain stable (or even increase), but who have preferred not to invest in them due to their high prices, or the oftentimes disconcertingly convoluted process of purchasing fractional NFTs.

Originally published at on June 14, 2022.