Individuals and businesses have expressed interest in the NFT space, as it is constantly expanding and developing new technologies. Social media platforms like Twitter and Discord are buzzing with NFT activities, from people wanting to join a project’s whitelist to a range of other events. With the spotlight on this space and the rapid changes witnessed daily, the ecosystem bears some semblance to the ICO rush of 2016/2017.
Many platforms are sprouting daily, with users racing to join in the hopes of flipping the NFTs for a tidy profit in secondary NFT marketplaces such as OpenSea. Before rushing into a project, it is crucial to analyze its use cases, founding team, partners, road map, and much more.
Some NFT projects provide their community members with access to exclusive features that non-members do not have. The utility of the project, as well as other factors, determines its value.
What are the signs of a good NFT project?
Founding Team
The founding team determines the success of a project. Some creators and founders such as the team behind Bored Ape Yacht Club have the necessary experience and reputation in the NFT space. When people invest in a project, they are investing in those behind the project. Immediately some notable faces in the space float a platform, people want to become a part of the community because of the past record of the creator.
Creators that have over time built trust in the NFT ecosystem are more likely to float successful NFT projects. On the other hand, some founders are avoided because they are known for merely flipping the NFTs for-profit and ditching the platform. Are the founders transparent about crucial areas in the project?
Whitepaper
Projects, both in the NFT and crypto spaces, release whitepapers that detail their aims, plans, and use-cases.
Usually, a whitepaper has a roadmap, which highlights the potential milestones of the project, developments, and partnerships that will fuel the project’s growth.
When looking for an NFT community to get involved in, consider those with feasible goals and features in the whitepaper. Those that claim that they intend to build a castle in the sky may end up leaving once the sales are over and their NFTs have been flipped for a profit.
Community
Every successful NFT project has a large community of active holders. A healthy community is essential, and their level of participation reflects this. Assess the level of enthusiasm for the project in the community. Does the community create a culture? Do people communicate with one another? Do the founders allow NFT holders to discuss project-related issues?. A vibrant community boosts the value of their NFTs. A heavily censored community might not be a good fit.
Social media following
Though the NFT space is growing in popularity daily, it is highly illiquid, especially when there is little or no social media following. A social media presence is essential for every NFT project, particularly on Twitter and Discord.
A potentially successful platform will have an active following of users who interact on their social media platforms. When analyzing a social media channel, evaluate the degree of activity and the number of followers. Some projects have hacked the trick of using bots to increase their social media following, though this can be verified by assessing their activity level.
Rarity
The demand for NFTs is based on their uniqueness and peculiarity.
Rarity can be linked to the founding team, underlying assets, unique elements, demand level, and much more. Rare NFTs draw more public attention.
Bored Ape Yacht Club, for example, is considered rare owing to its demand, scarcity, utility, existing holders, trading volume, popularity, and other factors. Tools can be used to determine the rarity level of NFT projects.
Potentialities
While analyzing a project, it is crucial to check its potentialities. Platforms with positive potential have room to grow in size, features, and demand.
The creator’s and community’s activity levels are indicators to assess a project’s potential.
Some communities push for massive adoption of their project by partnering with other leaders in the space, contracting developers to create unique features, and carrying out regular activities.
How to find potentially successful NFT platforms
Knowing the signs of a good NFT project is as important as knowing where to find them. Becoming a member of a potentially successful community may come with perks. At the moment, enthusiasts are looking for the next Bored Ape Yacht Club and Crypto Punks. Below are places to find early-stage NFT projects. As always, conduct due diligence before becoming a member of any community.
• Discord
Discord has emerged as a popular social media platform for NFT projects. One of the many reasons for its widespread use is a feature that allows the team to create sub-channels within the main channel. The sub-channels may offer features that are not required by everyone, hence the need for dichotomy.
Some Discord channels focus on highlighting both trending and discrete projects to join. During interactions with one another, enthusiasts can learn more about the NFT space, tricks to know, and much more.
Twitter has become a haven for crypto and NFT projects. Almost every platform has an account and community on Twitter. This social media ecosystem is the hub of both new and old projects.
It is easy to find enthusiasts talking about different projects, especially in the Topic section of the app.
Some Twitter accounts focus on analyzing new projects and their potentialities. It is important to detect whether the analysis is factual or merely a paid shilling attempt.
• NFT Marketplaces
NFT Marketplaces like OpenSea are great places to find new projects. OpenSea is one of the largest NFT Marketplaces, and it possesses an activity page that allows users to track new and trending collections. With the tools available, NFT enthusiasts can monitor the activity of different projects on the marketplace like their trading volume. Using the free tool offers an insight into the market demand of projects.
• Paid tools
Different NFT tools exist for specific purposes. Some are designed as data aggregators, collating data from different NFT Marketplaces such as OpenSea, Rarible, Mintable, and others and presenting the information in an easy-to-understand format. Users can customize their information using the dashboard. With the analysis, users can easily decide which project to invest in.
Some dashboards display the NFTs that big collectors are currently interested in. It could include a feature that allows users to set an alert that notifies them when a wallet purchases an NFT. This is known as copy trading, and it allows users to mimic the trading strategies of highly performing NFT collectors and traders.
Some of these tools are useful for NFT enthusiasts scouting for significantly undervalued NFT projects. They can easily search for rarity rankings.
An NFT Analytics platform may also have a snipping tool, which allows users to set a maximum price to buy undervalued NFTs once they are released to the public. Typically, the price of a tool is determined by the features that it offers. Paid tools may come with a free version with fewer features or an update period that can be used for a limited time.
• NFT-centric websites
Some websites focus on updating their viewers about upcoming NFT drops. Usually, project creators submit a request to those websites to feature them. In some cases, the listing is free, while in others, the project may be required to pay.
These websites are free to use and feature a collection of new projects. Before investing, NFT enthusiasts can conduct due diligence to analyze features based on the listing. Users can view the projects’ social media links on NFT-centric websites, allowing them to conduct due diligence.
In Conclusion,
- NFT space is expanding rapidly.
- It is crucial to do your research before getting involved in any project.
- The founding team can make or mar a project.
- The utility of a project is crucial to improving its value.
- Different tools abound to check new projects and analyze them.
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