What to look for in a good NFT project
Are you new to the NFT space? Don’t have any idea how to buy one or what to look for? What makes good projects better than others? Who should you be following?
If you are reading this, it’s probably because you’ve been poking around the NFT space and community and have some questions. Some of these “images” presented under the name of “NFT” sell every day for a lot of money … and hopeful this blog post will help you find your way around.
What is an NFT?
Before we go too far, let’s just take a step back and start with the basics. NFT stands for a non-fungible token, or in other words, behind these pieces of art are unique and non-interchangeable units of data that are stored on a digital ledger. These are powered by blockchain technology to establish proof of ownership. Like your typical pieces of art, NFTs are collectible digital assets that actually hold value.
Just like with any other investment strategies, it is important you all do your own research. I’m definitely not a pro at this NFT space so please take what I write below not as the source of truth.
2021 and beyond
Unless you are sleeping under a rock, you definitely know that NFTs and the Metaverse are on fire right now. Bored Ape Yacht Club and Cryptopunks have opened up a completely new digital sector of crypto collectibles.
2021 proved to be the year of massive adoption for the NFT market space. NFTs are more than just collectible pieces of art, many are now adding utility to them and are starting to be integrated within the Metaverse. CoinMarketCap reports that the sales from NFTs has reached over USD 19 billion. From these sales, 57% came from primary sales. The goal behind this is to get in early and then sell them for a profit. We know that not all NFTs will survive. We are in hyper mode right now and unfortunately, not everyone will make it.
But with all these NFT projects out there, how can one choose the one that will boom? How can you point out the ones that will make it from the ones that will flop?
There are no magic eight balls, but there are some basic strategies to help you along the way.
Get In Early, Get Out Big!
Finding profitable good NFT projects can be difficult. There are lots of things to consider and a lot of places to look. Hopefully this can help you narrow things down.
Bar none, Twitter is king and the place where NFTs live. It is one of the best places to learn about upcoming projects, discover its communities and keep up to date with certain projects. Finding projects on Twitter is really easy and it is also the place where you can market your own NFTs and collectibles.
By simply using the #NFT, #nftart, or #NFTCommunity hashtags, you’ll be finding yourself down the NFT Twitter rabbit whole where the NFT community is extremely active.
Leveraging influencers and other NFT thought leaders can be really useful to determine which projects they are following and interested in — usually a strong indication of a good project. This platform is where everyone talks about projects they like, dislike, what they’re buying, holding, and selling. Get Twitter!
To help you get started, here is a list by its blockchain of the 15 top NFT influences on Twitter to get you started:
- ohhshinny
- cryptobaristas
- j1mmy.eth
- RealmissNFT
- DeezeFi
- farokh
- NFT.NYC
- nounsdao
- BoredApeYC
- Dikasso_
- Max Maher
- The Wall Street Journal
- GaryVee
- NFT Times
- Meet Dave
Discord
Discord is a great place to find NFT projects but it is not always the easiest to use (how to use Discord). Every NFT project, community or influencers that respect themselves will have a Discord server. Discord is a community-oriented text/voice/video chat app with mostly private, invite-only spaces called servers. It is this special emphasis on communities with shared interests that make them stand out from other platforms.
Just like Twitter has its tight knit communities, so does Discord. This platform will allow you to dig deeper into projects and exchange with people that are part of that server.
Nansen.ai
We all know that data is king. Using data, can be a great way to find that next hidden gem. Nansen is an analytics platform for Ethereum, which combines on-chain data with a massive and constantly growing database containing millions of wallet labels. Jacob Van created a great blog post on how to best use Nansen and explained how Mevcollector turned 11ETH into 862ETH in just under 33 days.
Learn how to use data to your advantage with easy-to-digest graphs and analytics. You will be able to see what the current markets’ most influential buyers are buying and holding, set alerts and so much more.
RyzeNFT
RyzeNFT is an exclusive Chrome extension developed by Ryzensolutions team that is on a mission to make your life easier in the NFT world. Although this “add-on” is on the pricier side, you will definitely be getting plenty of bang for your buck.Why? Well this add-on includes features such as: rarity sniffer, drop detector, autoclick, tokens finder and way more.
Opensea
OpenSea is one of the most popular peer-to-peer NFT marketplaces to buy, sell, and create NFTs on web3. Here, users can watch OpenSea activities, watch trends, sales and recurring collections.
What to look for
If you are going to invest your own money into something, it only make sense that you spend time learning. The NFT space does take a bit of time but if you are willing to put in some extra efforts your chances of finding good projects increase dramatically. A good approach is one that investors would typically use to measure success for startups:
- Traction (social, discord, influencers, etc.)
- Team (people invested in the success of the project)
- Sales (# of sales and price movement in recent days/weeks)
Let’s go a bit deeper into some of these elements which you are on the hunt for that next NFT gem
Road Map Or White Paper
An NFT Roadmap is a document that maps out the goals and strategies of an NFT project you are currently looking into, in order to communicate its long-term value. NFT roadmaps usually include key project milestones, short and long-term goals, and plans for marketing and growth. It is the same as with regular businesses. It needs a clear vision and mission. We need to look at how it is built up and how much effort was given to putting the pieces together. Is what they want to achieve even feasible? Follow your gut… if it seems like it does not make sense, then it probably won’t.
Founders
Founders and creators play a huge role in the success of a project. I think it’s important to understand that when you invest in a non-fungible token, you are actually investing in the human behind the project. Transparency is key. The founders of these projects need some level of transparency in order to build trust with their possible future investors. Transparency will provide clarity on what the project actually is and how they are going to achieve it. Once you’ve started poking around, ask yourself if this is the type of project you would like to be associated with, and would learn from. Are they in this for a quick flip or are they in this for the long haul?
Social Presence
This is obviously a no-brainer, but still something we need to pay attention to. A project without visibility will have issues finding some owners which means that social media presence is of the utmost importance — not just the number of followers that back the project, but also their tone of voice and activity. Look for the amount of followers on their social media accounts. Look for continuous engagement and activities from the founders and followers.
Community
A lot of the NFT market place is really community-driven. A good NFT project will have a healthy community following them. The ones with the most engagement are usually the projects which will be the most successful. NFTs are more than just owning a piece of art, they are being part of a community, where a culture has been created, and culture creates a following. The Bored Ape Yacht Club is a prime example of this effect. They created a culture — a following where people wear their merchandise and flaunt it with pride.
A project with a great community will speak with passion about the project. This should be seen as a good indicator that the project has a good potential for succeeding.
Reach
One of the final elements to look into is the project’s reach. Be on the look-out for the number of followers a project has. If a project only has a handful of followers, it is usually not a good sign and a clear indication you may want to stay away from it.
If there are a lot of people following the project, this typically means that they are willing to put their image on the line that they built for several years. This is a good indicator of a legit project.
Signs of a good project
Now that we know where to look for projects, what to look for in a project, let’s take a look at some basic elements that represent signs of a good project.
- 10k + Twitter followers and a great development team (@FastFoodPunks or @RumbleKongs are just a few examples)
- Engaged online community (@LazyLionsNFT does this really well)
- Multiple sales in the past days, with the floor price rising
- 10k Discord members
- Strong project roadmap
An obviously good sign of a strong project to look into is who’s backing it? Global celebrities or influencers standing behind and purchasing an NFT like @StephenCurry30 buying 4 @RumbleKongs. Although this is a good sign, please be careful with this one. Celebrities are often gifted NFTs so that the project looks good.
When they do things out of the ordinary is another good sign to look into. @FastFoodPunks raised $600k for charity, got a ton of respect in the NFT community and is now looked at as a Blue Chip NFT project. They also got some pretty good mainstream press around this project.
Daily tactics
- Turn on your Tweet notifications for each project you follow, and their sales bots to track updates.
- Check in on each project’s Discord to get an overall sentiment of hodlers.
- Check the sales page and floor price. Dips are ok but looking for movement.
As you can see, there are lot of pieces to look into. Many people new to the NFT space will often gravitate towards the project identity. The project — or as I like to think of it, the brand — is arguably one of the most important pieces to the NFT puzzle. The brand is what draws people in and keeps the demand for their assets high.
Conclusion
No one should question that NFTs are here to stay. Many new projects keep being developed as more and more companies throw their hands into the ring. Social media platforms, influencers, and even big-name brands such as Budweiser, are all beginning to incorporate NFTs into their business.
Finding the right NFT project for you and your long-term investment portfolio is not easy and will require work. Stick to these three simple rules: find what you like, do your research, and never spend more money than you can afford to lose.
The Crypto space is volatile and comes with zero certainties. For your NFT purchase to go up in price will be a matter of popularity, hype, going viral, rarity and many other things that get together. However if you manage to find collections early on, find the very rare ones, and it goes viral, there is a good chance you could make a great return out of it.
Pascal Potvin is a Design Principal, a Crypto and NFT enthusiast. He is all ears for your take on anything design, Crypto or NFT, feel free to connect with him on Linkedin.
