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Valuing your Vault
Members can give a value to the squad that reflects the squad's assets. Before an “equity changing” action, such as opening a Funding Round or paying out a member, it is highly recommended that Vault Valuations are up-to-date.
Vault Valuations are a sum of the following: the total value of Ethereum & ERC20 tokens plus the manual NFT Valuation. By default, these valuations are measured in ETH.
Vault Valuation = Token value + NFT Valuation
While ERC20 tokens and Ethereum have liquid market values, NFTs have to be manually valued by the squad. Typically, a squad must update their NFT valuations before each “equity changing” action, like a Funding Round or Exit/Payout.
Valuing the NFTs that are held in your portfolio accurately is important for many reasons:
- Squads want to track their NFT portfolio over time.
- To raise new funds via a Funding Round, the squad (and new members) need to understand the pre-funding valuation the Vault is raising at
- In the case of an Exit/Payout, members need to understand how much ETH (or other tokens) they should be paid out in exchange for the equity % they hold.
Valuing publicly traded stocks and liquid ERC-20 tokens is objective due to their frequent trading while valuing a unique Picasso painting or individual NFTs requires a more nuanced approach. The limited sales of these items mean market prices may be outdated, and specific traits and rarity can complicate valuations. NFTs are less liquid and may have rare traits, resulting in fewer sale processes and difficulty determining a continuously updated market price.
While we suggest market prices for each NFT based on floor prices, last purchase price, and latest valuation (and soon appraisals from Upshot and NFT Bank), we recommend manually valuing each NFT, particularly grails. As the owners of the NFT, your squad will have the best understanding of what this NFT is currently worth.
Your NFT Valuation will always be the sum of the value of all NFTs in your portfolio.
You can also re-value your NFTs at any time via an Update NFT Valuation Proposal.
- 1.From the dashboard, go to the “Proposals” tab
- 2.Press the “Add proposal” button
- 3.Press the “Update NFT Valuation” proposal
- 4.The latest collection floor price will pre-populate the NFT (s). If that is unavailable, we will display the last valuation, followed by the purchase price. Values can be modified to reflect the squad’s perceived value of the NFT
- 5.Once valuations are complete, press “Next,” verify the updated values, then press the “Update NFT valuation” button.