Show me your NFT and I tell you how it will perform: Multimodal representation learning for NFT selling price prediction

TL;DR

This paper introduces MERLIN, a multimodal deep learning framework that predicts NFT selling prices using only images and textual descriptions, outperforming traditional financial feature-based models.

Contribution

The novel MERLIN framework combines Transformer-based language and visual models with graph neural networks for NFT price prediction, independent of financial data.

Findings

MERLIN achieves high accuracy in NFT price classification.

It outperforms baseline models based on financial features.

Experimental results validate its effectiveness for profitable NFT investments.

Abstract

Non-Fungible Tokens (NFTs) represent deeds of ownership, based on blockchain technologies and smart contracts, of unique crypto assets on digital art forms (e.g., artworks or collectibles). In the spotlight after skyrocketing in 2021, NFTs have attracted the attention of crypto enthusiasts and investors intent on placing promising investments in this profitable market. However, the NFT financial performance prediction has not been widely explored to date. In this work, we address the above problem based on the hypothesis that NFT images and their textual descriptions are essential proxies to predict the NFT selling prices. To this purpose, we propose MERLIN, a novel multimodal deep learning framework designed to train Transformer-based language and visual models, along with graph neural network models, on collections of NFTs' images and texts. A key aspect in MERLIN is its independence on financial features, as it exploits only the primary data a user interested in NFT trading would like to deal with, i.e., NFT images and textual descriptions. By learning dense representations of such data, a price-category classification task is performed by MERLIN models, which can also be tuned according to user preferences in the inference phase to mimic different risk-return investment profiles. Experimental evaluation on a publicly available dataset has shown that MERLIN models achieve significant performances according to several financial assessment criteria, fostering profitable investments, and also beating baseline machine-learning classifiers based on financial features.