How to find promising NFT projects
You can engage with the NFT market in many different ways. Based on your trading and investing strategies, there are specific factors that you should pay attention to, before jumping into the world of NFTs. In this article we will review some ways to find promising NFTs for long term investing.
The first thing to pay attention to is the community. If an NFT project has an organic community growth, it is probably a legit project. The more the community cares about the project, the higher the chances that it will be successful in the future.
There probably is an underlying reason when a project has many organic unique holders and it might be a sign for future profitability. Societies and communities have “word of mouth marketing” which means they will talk about the project to the like-minded people and the audience and fans of the NFT collection will accelerate; The more the demand, the higher the price. A helpful tool for finding out the number of unique holders is?Dune Analytics’ NFT comparison dashboard.
Due diligence is one of the most important steps in any kind of investment. When the team behind a project is transparent and easy to follow on social media, it is a good sign. On the other hand, anonymous teams are a bit worrying.
Every promising NFT project should have a roadmap; if they don’t have one, then it means there is no extra future value for the investors. Scam NFT projects might have a roadmap with extraordinary goals which are impossible to be achieved. Having realistic goals on the roadmap is a good sign.
the NFTs might come with royalties and rights of something; for example, the copyright of a song. This can be a promising NFT as well because there will be passive money in the future. The more famous the song gets and the more it gets bought and played, the more profit you will get as a royalty owner.
People interact with NFTs in many different ways. Some do day-trading, swing-trading and some keep the NFTs as a long-term investment. When there are many people who have not sold the NFT collections in a long time, we say the diamond hands balance is high. It might be a sign that the collection will be profitable in the future.
Be careful about social media. When an NFT project is getting a lot of attention on Twitter, it doesn’t seem like a good time to step in and invest because the NFT price has already started going up.
If the NFT comes with exclusive perks as utilities such as access to private parties, Metaverse events, physical item claim, NFT airdrops, access to VIP private events and future exclusive NFT sales it can be a promising project.
Market capitalization is another factor which should be taken into account when it comes to good NFT projects. Market cap shows how liquid an NFT is or how easy is it to buy or sell the NFT. We can achieve this number by multiplying the total number of holders by the average price of a single NFT. When the liquidity is low, it might be hard for you to sell the NFT and get your profit later on. The website?“rarity.tools”?shows the market cap of different NFT collections. Another factor that you can check on this website is the trading volume. If it increases, it shows the growing interest about the project which is good for investing and if the volume is decreasing, it means the interest is fading.
The rarity of an NFT is very important. NFTs are different in terms of attributes. It is advised to use a rarity pool before jumping into a collection. The rarer the NFT, the more valuable it will be. The NFT craze started in 2021 but some NFT projects started long before that and it makes them more valuable than the new ones.
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Even though the main purpose of the NFTs is to support the creators and the ownership legitimacy; these digital assets can be used to make a lot of profit. Find your suitable trading and investing strategy, pay attention to the concepts mentioned above and have fun making money with NFTs!
About Crypto Diva
I’m already in the Future… Meet me there! Blockchain Technology is my passion and I have dedicated my career and research path to DeFi. My ultimate goal is to encourage more female professionals in the DeFi industry.
As the Marketing Manager of?Paycer Protocol, I’ve got the privilege of being in close contact with CeDeFi experts who are creating the foundations the future financial world. I love to make the impossible possible and i’m willing to go the extra mile for that. Be my companion in my DeFi journey and I’ll show you everything.
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