Investing in NFTs: 5 Tips To Help To Identify The Best projects
NFTs- Non-fungible tokens
I'm sure you're aware of how popular NFTs have become in recent times. Every day, a sizable number of individuals invest in NFTs. However, if NFTs tickle your fancy enough to make you want to invest, it's wise to not do so blindly.
The conventional belief is that non-fungible tokens are here to stay and will play a critical role in sub-niches such as blockchain-based gaming, which is now dominated by the play-to-earn paradigm.
On the other hand, hundreds of NFT initiatives are being developed on a daily basis, and if you delved a little further into the NFT space, you'd have definitely noticed a spike in the number of scam projects.
With this in mind, I have compiled a few pointers to help you identify the finest NFT projects.
1.Community
When in search of an NFT initiative to invest in, pay attention to how the community projects the collection, and what actions they take to put it out there for everyone to see? Remember, representation is important.
In this case, BAYC is an excellent example. Here's why; it has a strong community that goes all out to support it. Almost everywhere you look, members are displaying their apes as profile pictures, on apparel, and so on. Remember, representation matters. So, if
Also, keep in mind that the NFT community is largely on Discord, and many of these projects employ bots to generate a false buzz in the community, leading you to believe they have a large number of users. Bots are simple to spot if you take your time and do your research.
Finally, participate actively in group conversations. Interact with the people in the Discord. By doing so, you can identify bots and also have a sense of the people you deal with. ”
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2.Art
When choosing an NFT collection, pay attention to the design. Citing BAYC- (BORED aPE yacht cLUB)yet again, the artwork is unique and catchy.
The point is, people have differing perspectives on art. CryptoPunks might not seem like the best artwork, but they may resonate with builders, CypherPunks, and so on.
Lastly, a flawlessly drawn NFT with all the intricacies may seem extremely lovely to you, but it may not be evaluated favorably by the community.
3.Volume and price
Contrary to cryptocurrencies, you must actually find a buyer for your NFT, You cannot just choose to liquidate(sell) your token with a simple click on your sell button.
Do your research, what NFT projects outperform the others in terms of volume and pricing? For this reason, prioritize projects with notably higher liquidity over those without. If you invest in an NFT initiative with a failing volume implies that you may have difficulties selling your NFT as quickly as you would like, until a buyer of course.
This indicates that projects with excellent liquidity should be favored over those that don’t for this exact reason. Getting into a collection with steadily declining volume means that you risk failing in selling your NFTs and being stuck with them until a buyer appears.
4.Exclusivity
If there are too many individuals vying to mint a particular collection, there's a good probability that many of them merely want to flip it for a profit and re-list it right away. Citing the Bored Ape Yacht yet again, it took around two days for the entire collection to be minted because it was somewhat restricted(exclusive).
5.Holders
If an NFT project is good enough, then it is expected to have a huge number of holders. Now, how do you verify this detail? Citing OpenSea for example. It is a transparent NFT marketplace that allows you to determine whether or not a certain collection is strong or dispersed.
Finally, here are other factors to look out for when seeking to invest in an NFT collection, however, we draw the curtain here today.
Please note that I am only writing based on my research. I strongly recommend that you do your research.
Please keep in mind that I am simply writing based on my findings. I highly recommend you do yours before investing as well. Thank you so much for your time.
Thank you for reading
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