The four steps of evaluating an NFT project
- Know what you want to achieve.
- Seek out a project.
- Do your homework.
- Purchase an NFT.
Know your goal
Consider why you want an NFT before you buy one:
- To save money on gas, try purchasing an NFT from a chain like Polygon or Solana. For further information, see my gas guide.
- If you want to help a creator or enjoy their work, you probably already have a project in mind.
- If you choose to invest, keep in mind that NFTs carry a significant level of risk. Many “blue clip” ventures are costly, and a large number of new projects fail. NFT investors must devote a significant amount of time to chase alpha (e.g., getting the latest intel on hot projects).
The advice below is essential reading regardless of your goal.
Find a project
Here’s how to locate a worthwhile NFT project:
- Look for projects that are currently popular. On OpenSea, CryptoSlam, and NonFungible, you can search for NFT projects by volume. You can also find popular projects at the last minute using premium tools like Icy.tools, Nansen, and Moby.gg.
- Collectors of NFTs should be followed. Top NFT collectors deal in enormous quantities of NFTs and are frequently the first to learn about new projects. Moby.gg, for example, allows you to view recent collector transactions. Collectors can also be followed on Twitter (follow the NFT topic to start).
- Join one of the NFT communities. To get the most up-to-date alpha on projects, join the NFT community. The Odyssey community is a great location to learn about NFTs (and it’s free). Most of the most popular NFT communities have a paywall (e.g., Metaverse, FWB, and CPG Club).
One thing is certain: if you receive a Discord DM about an NFT project, disregard it. That guy is most likely a con artist after your wallet’s seed phrase. When you join new servers, turn off Discord DMs.
Do your research
After you’ve found a project, look at its website, social media accounts, and community to learn more about it:
- What is the project’s mission statement? Do you have any interest in the mission?
- Who are the members of the project’s core team? Do you enjoy what they’ve done before? Do they have the necessary skills (e.g., designer, developer, community manager) to carry out the project?
- Is there a plan in place for the project to deliver clear usefulness over time? Are there going to be any fresh NFT drops, for example?
- Is the core crew involved in the local community? Are members enthusiastic about the project’s plans or are they merely interested in gambling on prices? How many people are involved in the neighborhood?
- Are NFT collectors commenting about the initiative on social media? When you search for the project’s name on Twitter, what do you find?
If the project has already been minted, you can seek further indications by visiting its profile on an NFT marketplace (for example, Wanderers on OpenSea):
- Is the project checked and verified? Scammers will sometimes create bogus projects with the same name.
- Owners: How many goods does each owner have? It’s a positive sign that the project isn’t concentrated in the hands of a few collectors if there are 2-3 things per owner (split items by owners).
- Minimum price: Is the floor price still in place? If there are a lot of floor listings, it’s a hint that the project is being abandoned.
- Rarity: The rarity of an NFT indicates its value. Collectors frequently (but not always) seek out the project’s rarest NFTs. Look up NFT rarity for Ethereum and Solana NFTs using rarity.tools and howrare.is, respectively.
Buy and NFT (or maybe not)
You’re ready to acquire the NFT once you’ve found a project that interests you and done your own research.
- For the first time, minting (producing) the NFT.
- Purchasing NFTs on the secondary market.