Predictive Valuation of Non-Fungible Tokens (NFTs): Machine Learning Models in Decentralized Finance

This study examines the pricing dynamics of Non-Fungible Tokens (NFTs) in the secondary market using advanced machine-learning techniques. We construct a large dataset of Ethereum-based NFT transactions initially comprising over 500,000 raw blockchain observations spanning multiple NFT segments, including art, collectibles, gaming, metaverse, and utility assets, over the period from November 2018 to March 2023. Following data preprocessing, synchronization across data sources, and the construction of history-dependent features, the analysis focuses on a final analytical sample of approximately 70,000 transactions. To address the challenges of non-fungibility, thin trading, and high price dispersion, we develop an interpretable predictive framework that integrates domain-informed manual feature engineering, automated Deep Feature Synthesis, and dimensionality reduction via Principal Component Analysis. Three non-linear models—Random Forest, XGBoost, and a Multilayer Perceptron—are trained and evaluated using both random and time-aware validation strategies. The results indicate that XGBoost consistently achieves the highest predictive accuracy, both overall and across individual NFT segments, while historical transaction prices emerge as the dominant predictor of future prices. Segment-level analysis reveals substantial heterogeneity in predictability, with art and collectible NFTs exhibiting more stable pricing patterns than gaming and metaverse assets. Overall, the findings highlight strong path dependence and reputation-driven valuation in NFT markets and demonstrate that carefully designed machine-learning models can deliver high predictive performance without sacrificing economic interpretability.