Primary Market and Secondary Market
The primary market is where a new asset is sold directly by its issuer for the first time; the secondary market is where that same asset is subsequently resold and traded among other holders.
The primary market is where a new asset — such as a newly minted NFT, a newly issued token sale, or a newly listed security — is sold directly by its original issuer to buyers for the first time, with proceeds from that sale typically flowing to the issuer itself. The secondary market is where that same asset is subsequently bought and sold among other holders afterward, with proceeds from those later trades flowing between the buyer and seller directly rather than to the original issuer.
This distinction matters for understanding where value actually flows: an issuer generally only captures proceeds from primary market sales, which is part of why mechanisms like NFT royalty standards (see Kaavon's "EIP-2981 (NFT Royalty Standard)" glossary definition) exist specifically to let creators capture some ongoing value from secondary market activity they wouldn't otherwise receive at all. The relationship between primary and secondary market pricing, such as a mint price compared to a secondary floor price, is also commonly used as a signal of how demand for a given asset has evolved since its original issuance.
Examples
- An NFT project only receives proceeds from its primary market mint sale, not from any later secondary market resales, which is part of why royalty mechanisms exist to let creators capture some ongoing value.
- Comparing primary market issuance pricing against current secondary market pricing is a commonly used signal of how demand for an asset has changed since it was first issued.