What Makes a Good NFT Project?

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Non-Fungible Tokens aka NFT is a term that is becoming more and more commonly used globally. What is an NFT? Essentially, it’s digital content (photo, art, video, audio, etc.) stored on a blockchain such as ETH (ETHERUM), SOL (SOLANA), CRO (CRONOS), etc. Once minted (originally purchased from the developer), each NFT is stored in a specific blockchain wallet. These NFTs can then be traded on the specific NFT marketplaces that support that blockchain wallet. For example, Opensea is an NFT marketplace that mainly supports ETH-based NFTs, Solanart supports SOL-based NFTs, Crypto.com marketplace supports CRO-based NFTs, etc.

Loaded Lion NFT bought by CRO2MOON for $120,000 USD

Certain NFT projects such as the Bored Ape Yacht Club, Crypto Punks, Loaded Lions, CloneX and more have been bought by many popular celebrities, athletes and even companies across the globe. These are just a few of the NFT projects that have come out for a relatively affordable retail value but now are seeing tremendous gains in price. Many of the most popular projects today are very expensive and have a high price floor (min. price to purchase an NFT) making it hard for people to acquire them. Rare NFTs from these projects can go for hundreds of thousands to millions of dollars.

Mutant Ape Yacht Club NFT bought by CRO2MOON for $60,000 USD

There are tons of new NFT projects that are being released every day. However, most of these projects result in buyers losing out on most if not all of their investment. Therefore, it is important to carefully analyze and research each project before purchasing any NFTs. But what makes a good NFT project? Here is a list I comprised of the most important criteria points I use when considering investing in an NFT project.

  1. Social Media and Following
    It is crucial to go through the different social media platforms of an NFT project to get a general idea of interest in the project. All projects should have a Website, Twitter and Discord. The greater the number of followers and members the better. More interest results in more demand for those NFTs. Personally, I prefer to go for projects with at least 20,000 followers or discord members.
  2. Team/Founders
    NFT projects will often have a section on their website dedicated to displaying all the founders of the project accompanied by a short bio or links to their social media. Here you can take it one step further and research a bit about their prior experiences and background. If a project doesn’t have any names or faces behind it similar to BAYC, then you must rely on the other factors in determining whether to invest in that NFT project or not.
  3. Roadmap
    The reason why projects like Bored Ape Yacht Club are successful and still relevant today is because their roadmap has great longevity to it. Meaning that the roadmap is constantly getting updated and the team is always working to build the brand and community. Analyzing the roadmap of a project can help you understand the vision the founders had for the project.
  4. Aesthetic
    The overall look and appeal of the NFT are also something to consider. Projects will often share sneak peeks of what the NFTs will look like before the minting phase begins. Unique and creative concepts often have a better chance of attracting attention and blowing up on social media. Crypto Punks was one of the first NFTs of its kind and was recognized for its unique appearance upon release.
  5. Whitelist
    A more common trend in projects releasing now is to do a whitelist. This is basically where members of the community can earn a guaranteed spot to mint the NFT by participating in giveaways, games and challenges. It is a way of both rewarding true supporters and also minimizing the possibility of potential bots from snatching NFTs on public release. It also helps encourage unique ownership and to an extent limits the influence a single individual could have on the markets.
  6. Incentive/Benefits
    NFT projects that rewards holders with incentive and unique benefits are a great way to attract and retain buyers. Benefits could include giveaways, airdrops, real-life events, merchandise, and more. Bored Ape Yacht Club gifted holders with an airdrop serum to mutate their NFT into a new Mutant Ape Yacht Club NFT. This was one of the most successful airdrops and resulted in an incredibly fast-growing community. Currently, the Mutant Ape Yacht Club competes with the highest volume traded projects ever.
  7. Volume Traded
    This is a very important factor when deciding how long to hold on to a project. Most projects will fall into similar patterns where at launch will have lots of sales and volume traded but after the reveal of the NFT, this is nowhere to be found. If the volume activity or sales are not rising over time then it may be hard for you to resell your NFT and at times you may not be able to at all unless cutting a big loss. You can also use and compare this information to similar projects to help predict price levels in the short and long term.
  8. Minting Price
    Generally, speaking majority of NFT projects are quite reasonably priced during the initial minting phase. The initial goal of every project is for the collection to be completely minted as fast as possible after launch. Projects that sell out quickly tend to be more valuable as there is a higher demand for them right off the bat. Personally, I wouldn’t invest more than 0.25 eth or equivalent to mint a project except for land NFTs. Pepsi’s Mic Drop NFT is a notable mention in terms of minting price as the NFTs were free and buyers only had to pay gas fees.
  9. Unique Ownership
    Unique ownership has to do with spreading the amount of NFTs released amongst as many different accounts and people as possible. The more diverse the ownership, the harder it will be for market manipulation. Unique ownership also helps build a larger community as more different people can hold that specific NFT.
  10. Endorsements/Sponsors
    Endorsements and sponsorships can help boost an NFTs community following and also drive up prices. Snoop Dogg is someone seen to have lots of influence in the NFT space. His partnership with Sandbox Games has created an enormous buzz around social media as people are willing to pay top dollar for plots of land next to him in the Sandbox metaverse. CloneX is another example of an NFT project that gained lots of attention when Nike announced they acquired them.
  11. Amount Released
    Projects can release various amounts of NFTs and still be successful. It’s all about knowing what is right for the product and community. A common trend with bigger name NFTs such as BAYC, Adidas, Big Time, etc. is to release more than the usual amount of 10,000. This is because those projects have lots of following and traction and want to capitalize on this by releasing a larger amount which will further grow the community. The Matrix NFT which was released on Nifty’s website was very successful even though it had released 100,000 NFT avatars.
  12. Rarity
    Many NFT drops that come out including the Loaded Lions, BAYC, Crypto Punks, etc. are all ranked based upon property traits. Different NFT projects will have different properties for their NFTs. The combination of all traits put together provide your NFT’s rarity score. This score can be used to determine ranking amongst the remaining NFTs in the collection. The higher the the rank of your NFT the more valuable they become.

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