Non-fungible tokens (or NFTs) are becoming increasingly popular around the world. Many entrepreneurs have made a profit from NFTs, which are used to track ownership of digital assets such as music and art. Two of them have gone on to become billionaires.
Meet Devin Finzer and Alex Atallah – the founders of the New York City-based blockchain startup OpenSea. They are also the first billionaires in NFT. OpenSea’s peer-to-peer platform allows users to create, buy, and sell NFTs. OpenSea receives a 2.5% commission on each sale. Its recent funding round valued it at $13.3 billion, up from $1.5 million six months ago. Forbes estimates that founders who hold 18.5% of the company are worth approximately $2.2 billion each.
The son of Singaporean billionaire Peter Lim, Kiat Lim has teamed up with Elroy Cheo, a scion from the family-owned Mewah International’s edible oils company, to launch ARC’s private digital community. NFTs are used to authenticate memberships in the app, including Asian entrepreneurs, venture capitalists and Web3 developers, cryptocurrency experts, social influencers, and Web3 developers.
One of the most challenging parts of diving into NFT ventures is choosing the right project for you. Most frequently, crypto enthusiasts are confused about how to find the best NFTs to invest in and how to assess the upcoming projects. This article will guide you through the main aspects of NFT project performance and indicators that prove the worthiness of your investment.
Know your goals
Think about why you want an NFT in the first place before you decide to buy one.
Here are some of the goals that many NFT beginners consider:
- To save gas, you might consider purchasing L2 chains such as Polygon or non-ethl L1 chains such as Solana.
- You should probably already have a project in mind if you are interested in supporting the artist or the art. Find similar projects with higher turnover potentials.
- NFTs can be risky investments. Many of the “blue-clip” projects are costly, and many fail. NFT investors must spend their time hunting alpha (e.g., getting the most current project information).
Finding the best NFT projects
There are many ways to find exciting projects. However, it does require time and a bit of research from your side. Here are our recommendations for your research:
- You should look for the most popular projects. Trending projects can be found on OpenSea and CryptoSlam.
- Follow NFT collectors. The top NFT collectors trade large quantities of NFTs and are often the first to spot hot projects.
- Join NFT communities. To get the most up-to-date information on NFT projects, you can join NFT communities.
Following social media platforms like Twitter, Discord, and Reddit will be extremely useful. For instance, one of the best NFTs to invest in emerged recently is AdRunner – a metaverse advertising platform which is addressing its community through the above-mentioned channels only. Missing out on these platforms essentially means losing essential information for your next investment decisions.
One of the most important pieces of advice to keep in mind is to not respond to any direct messages (DMs) from someone on Discord regarding an NFT project. This person is most likely a scammer trying to steal your wallet’s seed phrase. When you join new servers, turn off Discord DMs. Discord DMs regarding new NFT projects are 99% frauds.
Do your research
To understand a project and social handles, you should check all the communication channels they have: website, social media channels, blockchains where their products can be found and any other media exposure.
Below is a short checklist of what you should pay attention to when looking for the best NFTs to invest in:
- Mission: What is this project trying to accomplish? Do you find the mission appealing?
- Team: Who is the core team behind this project? Are they able to use their skills (e.g., designer/developer, community manager)? Do they have any proof of previous work? Are you happy with what they are tweeting?
- Roadmap: Does this project have a clear plan to deliver utility over time? Are there new drops planned for NFT owners, for example?
- Community: Are core team members active in the community’s life? What percentage of the community is active? Is the core team excited about the project’s vision and actively participating in the discussion or speculating about prices?
- Social: Is the NFT collector talking about this project? What activity can you find when you search Twitter for the project’s name?
To find additional signals, you can check the NFT marketplace profile of the project if it has been already minted (e.g., Rarible). Then go into further technical details:
- Verification: Has the project been verified? Scammers may create a fake project using the same name.
- Owners: How many items per owner? Owners: How many items are there per owner? This is a sign that the project doesn’t have too many collectors.
- Floor price: Does the floor price hold? Many floor listings can indicate that people are trying to dump the project.
- Rarity: This is an indicator of the rarity and value of an NFT. Collectors are often drawn to the rarest NFTs in a project’s history. You can search for NFT rarity among Ethereum and Solana NFTs.
Invest in an NFT
After doing your research, you can decide whether you want to purchase the NFT.
Once the decision is made it is much easier to invest in your favorite NFT project:
- Minting (you could also make use of whitelists and presales)
- Buy an NFT on a secondary marketplace
You might consider buying multiple NFTs if you are sure about the success of a project.