Trying to look for a good NFT project? NFTs are becoming more attractive to investors looking for easy ways to earn cryptocurrencies. In January 2022 alone, NFT sales reached an all-time high of $7 million. At the beginning of the year, we saw a massive increase in NFT trading after celebrities, and popular brands on the internet took significant steps to join the NFT space.
Now, the sales itself is already fascinating for retail investors like you. But how do you start? How do you find the projects that will give you the best returns? In this blog, we’ll introduce you to what you should look for when investing in a good NFT project.
Why invest in NFTs?
No technical knowledge is required
Investing in NFTs provides investors with several benefits. The first one is being able to invest in them without having technical knowledge about cryptocurrencies. We all know that cryptocurrencies are technical because of the underlying blockchain technology. But, investing in NFTs doesn’t mean that you have to master all the technical aspects of blockchain. The good thing with investing in NFTs is that you only have to look into the project and decide from what you see or observe.
Another thing is that NFTs serve as collectibles, which means that they are like art in the real world. Collectibles increase in value over time. You don’t have to frequently trade them to earn profits because the longer you keep them, the more money you gain. So, NFTs are suitable for long-term hold too.
Lastly, investing in NFTs welcomes you to supportive communities where you can make friends, share your stories, and learn together. The NFT community is generous and friendly. Some groups of people are opening their doors to NFT newbies who want to learn more about Web3, blockchain, NFTs, and other technologies surrounding it.
How much can you earn from investing in NFTs?
Now, you might want to know how much you can earn from investing in NFTs. The answer is that it depends on many factors, such as the number of NFTs you invest in, the value of the projects, and the period you hold your NFTs.
The more NFTs you invest in and the longer you keep them, you can earn more money. However, note that it will still depend on the value of the projects you invest in. Even if you have several NFTs, if the project isn’t that valuable compared to other projects, your earnings might not be as high as you expect.
This is why it’s important to learn to spot good projects as you invest. Don’t waste your money on projects that don’t provide value to their holders.
Things to look for to spot a good NFT project
Planning your investing strategies before putting your money in NFT projects is essential. Some NFT investors lost their money for not preparing and formulating their investing strategy. So, if you don’t want to lose your hard-earned funds, check these things to look for a good project.
The team behind the project
The team behind the project needs to work hard to bring the NFT collection up. Researching who the team is behind the project will help you filter out bad projects and possibly avoid scams. According to some NFT holders and investors, you need to look into the identities and experiences of the people behind the NFT project. As much as possible, they should be “doxxed.” Doxxed means documented in the NFT space.
When looking at the team, you have to consider who they are and what they do outside NFTs. Good teams are composed of skilled, competent, and professional people in the field. However, this doesn’t mean that having more minor experience building projects will not make a good team. After the initial assessment, the rest will depend on the consistency of their efforts.
Roadmaps are the documents that will tell you the plans of the NFT projects in the long run. This is where you can find the direction of the projects. So, even if the project launch doesn’t happen yet, if the roadmap is complete, you can already see the missions and milestones of the particular project you are interested in. With this information, you can personally assess whether you want the direction of the NFT collection or not.
Note that most projects in the NFT space update their roadmap from time to time as the team sees fit. There are instances where good opportunities come in, and the team needs to adjust to meet the community’s satisfaction. Sometimes, the community tells what they want to happen in the project, and if the plan gets voted on, it will get included in the roadmap.
Another thing to look for is the utilities of the project. In the NFT space, utilities are things that benefit the users. They are basically the usage of your NFTs. Some projects allow the use of NFTs to access exclusive clubs and events, NFT merch, virtual concerts, and more. The utilities will depend on the team. Everything is connected to the roadmap, and all utilities for the holders are also reflected there. Like roadmaps, you may also find utilities changing, depending on the short and long-term plans of the project. Once you invest, make sure you are always updated.
Consistency will depend on the team of the NFT project you want to invest in. While researching the project, observe if the team posts announcements or hosts events from time to time. Usually, interactive activities hype the community, making holders stay for longer periods. So, choose a project team that is consistent and true to their words.
Finally, transparency is important, especially when funds are involved for the community. Some NFT projects also manage DAO–decentralized autonomous organizations. When there is DAO, there is a treasury that needs to be managed well for the benefit of the community. Transparency can be done through announcements or giving holders access to the project’s wallet address to check the transactions happening from time to time. Choose a project that doesn’t lie to the community. From here, you’ll trust that what they do on the project will benefit the holders.
Newbies often struggle in choosing a good NFT project for themselves. But, keep in mind that NFTs aren’t always for everybody. You may win or lose. The important thing is you’re doing your responsibilities as an investor to ensure that your money is invested into the right people to run the project.