Identifying the best NFT projects.
How do you identify early NFT projects specifically legit ones that go up in value? Here are my thoughts on what factors I look for in projects.
*Before we start, these are my thoughts and you should take it how you want to, disagree, agree or form your own opinion. This is not financial advice.
How do you identify the next big successful NFT project?
How will you identify the next NFT project that will go up in value? I will explain some of the factors that I look for when investing in a project.
So, I’ve been in the space for half a year now, and I’ve seen projects come and go. I’ve missed successful projects and also been caught in some rug-pulls, but all of these help me learn to pick the next NFT project to go for. I ask myself many of these questions and seek for an answer before investing in a project:
Who created this project?
When was it created?
Who has bought from this project?
Where did it come from?
These are vague questions but answering all of them will help lead to more knowledge about the project.
However, I believe there is one thing you should always keep in mind. The NFT space is now in the stage of mainstream coverage with massive celebrities and influencers looking into it now — meaning we will see a rise in projects, especially from people you may not know about. A large influx of people results in the legit projects being hidden by many others / undetectable.
Do I know the creator?
If I do, this is already a bonus. A project selling out can be due to the person who runs it entirely. If people trust the creator, they may also trust the vision of their projects. This is a key-point and was something I specifically had in mind when I created my own NFT collectibles project earlier this month.
When was it created?
You have to understand the market before getting into it or risk falling into the trap of being dumped on. Is it still at the primary stage or the secondary? Is the market thriving because it still at the early stages? Will you wait for it to calm down before buying into it? These questions result in you thinking long-term for the project. Know what you are investing in, but the timing of your entry is also crucial.
Who has bought from this project?
Do you know them personally, or have you heard of them? Answering this will enable you to avoid complications of buying something with no value. This heavily ties in with the second point where you don’t want to get dumped on, what if a known-flipper owns over 20% of the supply?
Where did this project originate from?
I hope you understand to find a legit product/service; you should always do your research as this is the main factor to avoid falling into a “rug-pull”. Many of the points listed above also link together to “understanding the creator” and understanding the tech behind it. Not every NFT collectibles project may be on the same blockchain, some may be on Flow or WAX. You should know how much control you have over your NFTs and how easily you can access them.
NBA Topshot is a good example, it is on the Flow blockchain, many will deposit money to buy packs, and when they miss out, they don’t realise they have to wait weeks for their funds to return due to KYC.
How long will the project last?
Look at the project’s roadmap and what they plan to achieve. Is it possible? and are they striving to do it?
I will show you a graph that perfectly showcases the current phases that NFT projects are going through right now, by my good friend, Matty.
Drop him a follow as he mentions a lot of information about the NFT space for free with frequent threads & blogs.
This can change over time but look for how long the project can last by looking at the two main things: incentives & community.
The creator can provide incentives and bonuses for the value of a project to keep increasing whether they add a full-fledged phase to it like a game or give benefits to holders somehow. One example of this is NFTREES.
The community can be the promotion it needs; no incentives required other than marketing the project to other people. It shall need no explanation of what the future looks like along as they know the past behind it. One example of this is CryptoPunks.
Case study: Hashmasks
Being in the space throughout the past months, everything is always connected, and if we take one example into account — Hashmasks. Here is a small case study on Hashmasks from my PoV as it’s grown.
This project has been one of the biggest to date yet in the NFT space with giant FOMO mechanisms and also one that I missed out on. This project is a personal favourite of mine, primarily due to the easter-eggs; remember this:
“You will inevitably miss projects. You can’t be in every project.”
Hashmasks have so many different mechanisms combined into one to increase FOMO for customers; here is one below. Only 16,384 Hashmasks exist, and they were sold in the format of a specific amount of NFTs on sale for 0.1 ETH and then increasing by how many were sold.
People will feel like they are missing out on the primary market, so it’s better to buy it now instead of purchasing it from the secondary market later at a hiked price. They don’t want to miss out, especially when they notice the community talking about it relentlessly.
Your Hashmask was unknown to you for some time & you received $NCT tokens to change the name if you purchased a Hashmask. People made over x10 if they bought in at Phase 1 when selling their $NCT tokens, they could have also made hundreds of thousands of dollars if they were lucky and got rare attributes on their Hashmask. The highest sale of 1 Hashmask sold for 420 ETH — $726,000+ so financially, Hashmasks was an excellent project to enter.
This is the current most successful NFT collectibles project (short-term), and we have to consider many factors such as will it last?
People will mainly be in these projects for financial gain. The NFT market isn’t necessarily like the Crypto market for all these coins where “holding” is the game. You need a healthy market to strive especially if you want to be here for the long-term. Hashmasks has many mechanisms and was executed properly, which has led it to its recent successes. However, this doesn’t mean if you did the same thing — you would be the next Hashmasks.
Each project has its own unique features, and with the space being so new, Hashmasks has hit the nail on the head with this one. The community is robust on this one with many involved in beautiful findings, further marketing the project.
Where do I find these projects?
This is a common question and one that will continue to be asked the NFT space gains more traction. We had already seen a $1.5M sale for an NFT collectibles item (virtual land on Axie Infinity) less than 2 days ago. We’ve also noticed celebrities such as Lindsay Lohan, Soulja Boy and even Mark Cuban entering the space. Additionally, Crypto influencers such as Cobain openly mentioning NFTs will result in a massive influx of people very soon; we can shortly expect the mainstream to enter the industry. Projects will pop up every minute but to even find out about them, is like finding about an ICO early.
Following the right people on Twitter, being in the right discords, talking to experts in the industry and even following notable addresses on etherscan. I always speak about future projects that are coming up on my Twitter and provide reasons why I think they are likely to pop-off.
There is no proven method or guidebook you can use to find all the best NFT projects and this will forever be a difficult thing to do. Every recommendation is bound to be biased in some sort of way so If you fail to diversify your sources of information, it may lead you away from certain projects just due to your lack of exposure. DO YOUR OWN RESEARCH. My own personal method of looking for good NFT projects will be on my discord soon if people really want a starting point. The main thing would be to create a social profile, lurk in Clubhouse, join the discords for top/og projects and follow the big NFT influencers/collectors. Many projects can simply be found by following wallets for top NFT holders; etherscan makes it extremely convenient to track ERC-721 tokens.
Take your own path. Discover the projects and then research to find a long-term project, to find a short-term one that will grant you financial freedom, to find something innovative, or whatever you would like.
More importantly, create projects if you want to be involved in the space. Become a *curator.