Ever wonder how NFT traders can make such incredible returns in a very short period of time? Are you a lucky trader or can there be strategies to maximize your investment? This article will show you how to use simple steps to locate the best NFT projects. This article will show you the essential points to be aware of to avoid being scammed.
Introduction to NFT Projects
Non Fungible Tokens (or digital assets) are built on blockchain. These NFT collections are usually digital art. Some of the most well-known NFT projects are CryptoPunks and Bored Ape Yacht Club.
The most effective NFT projects go beyond simply collecting art. They build strong communities around their projects. They do this by engaging with their users via social media such as Twitter and Discord. The NFTs also offer additional benefits, such as access to community spaces, giveaways, and live events.
NFT Project Research: How to Research NFT Projects
While you may be lucky enough to find NFT projects that are successful by accident, it is possible to do better and get great projects in a quicker time frame if your diligence is thorough. NFT investors and traders stress the importance to thoroughly investigate a project before you invest in it.
Due diligence requires multiple steps. First, review the white paper (or roadmap) for the project. This white paper outlines the goals the creators want to achieve with the NFT Collection. The white paper usually outlines the creators’ vision and mission for NFT collection. It usually includes the company’s plans for growth as well as a breakdown of the technical aspects of the collection.
It is also important to check the collection’s social media presence. It is difficult to assess the value of a project if it doesn’t have a social media presence. It should therefore have a sufficient following. Engagement is as important as size. It is essential that the project be active on all platforms and interact with users.
Continue reading: How to assess the value and worth of NFTs
Transparency is the key. Transparency is key. If the founders of the project are available, it’s easy to see their work history. This information is necessary to make sure the creators can keep their promises. This allows you to review past projects created by the same creators. You might not want to make long-term investments if the creators are known for abandoning projects in the middle.
Analysis of the Roadmap for NFT Project
It is important to have a long-term plan in order to decide whether you want or not invest in a project. This is the first step in your research into NFT collections. It is crucial to understand what you should look for in a roadmap.
It is important to remember that some items on the roadmap will be milestone-based and others may be time-based. Integration with the metaverse can take some time, so it will be given a date. Merch releases, on the other hand are dependent upon the number of members that the project has. Therefore, merch might not be released until the threshold is reached.
A project plan usually includes:
Information about NFT drops – This includes the date and time of the drop along with the price and quantity of tokens being distributed.Technical advancements – The roadmap should highlight the expected dates for revamping the tokens, or adding new features and functionalities. Upcoming events – Every successful project offers special events to the community. These events can be held in virtual or real-life. Merch Release – It is essential to make people feel at home in a group. Airdrops – Many NFT projects offer rewards for being members. This reward comes in the form additional NFTs that are free.
Twitter is a great platform for NFT projects. Twitter is used by most of the NFT and crypto community to connect with new collections and find news about the industry. This is why digital artists and other project creators use Twitter for their marketing. This allows their community to grow, which in turn increases demand and value for the project.
Inflated follower numbers and low engagement are two things to watch out for on Twitter. Let’s say there are two collections of 10,000 NFTs that can be mint. The social media account for the first project has approximately 30,000 followers. However, it receives around 100 likes and tweets per post. The second project, on the other hand has 15,000 followers and gets more than 5000 likes or retweets per post.
The second project is a better option in this instance, since the first project might have gained followers that give the impression of a larger community.
Discord: The Best Platform to Find NFT-Projects
Discord, a messaging app, allows you to create large groups of more than 500,000 people. It’s the best app to create invite-only communities for NFT communities. Discord is used by most NFT communities to create member-only zones.
Some projects might have both a private and public section in their discord. You can interact with other users who are interested in the project by joining their channels. You may have access to information earlier than on other platforms. Community moderators regularly post announcements about NFTs.
It is important to have high engagement between followers and creators. However, engagement within the community can also increase interest in a collection.
Use the Best Tools to Identify NFT Projects
OpenSea
OpenSea, the largest NFT marketplace online, is a great place to discover about the most important NFT projects. It ranks projects on the Ethereum and Polygon Klaytn blockchains.
You can track sales of different NFTs which will allow you to see the current status of a project. OpenSea can also show you the price history of various projects with their highest and least sales.
Rarity.tools
The most important factor that influences the price of an NFT is its rarity. Rarer NFTs have a greater profit potential.
Rarity.tools allows you to determine the rarity of an NFT. It assigns a rarity score for each token by using the characteristics and traits of NFTs within a collection. This allows you to compare your NFTs with others in a collection.
Icy.tools
This subscription-based platform provides real-time data about the most popular NFT project. It provides market patterns and metrics such as floor price and volume traded.
You have access to data that would otherwise be difficult to find. It allows you to easily access sales trends, token rarity, and custom alerts.
How to Avoid NFT Scam Projects
Do Your Own Research
You should always verify any claims. NFT trading is not for everyone. There may be NFT experts whose opinions are trustworthy, but it can be costly. It’s safer to inspect a project yourself than relying on others.
Be on the lookout for gas fees
Although this isn’t a scam, it can lead to you losing a lot of money if you don’t pay attention to gas fees. A processing fee is required for every transaction on a blockchain. This is called the gas fee.
The traffic on the network determines the fee. Those who pay more for gas gain priority. These fees may be several times higher than the NFT that you wish to purchase. Pre-mint your NFT to avoid paying unnecessary fees.
Rug pulls, Pump and Dump
NFT creators may not keep their word. After making money from the initial NFT minting, they abandon the project. This can lead to a significant decrease in the value of your collection and could result in huge losses.
You can avoid this by checking the previous projects of the same creator. It is best to avoid people who have abandoned projects within a short time after they launch.
void Impersonators
Many people attempt to copy a collection that becomes popular. Many others tried to imitate the Bored Ape NFTs’ art style, passing it off as their own collection.
You should ensure that you only purchase NFTs from original collections or creators. You will end up paying a lot more for NFTs of lower value.
Continue reading: 5 ways to prevent your NFTs being stolen
Last Thoughts
NFT trading can seem daunting. Although it’s not certain that you will be able to buy the next CryptoPunks, there are some techniques that can help you make high returns and keep you safe. It is essential to put in the effort to protect your investments. Only then will you be a successful trader.
Hacks For Finding NFT Projects: Complete Guide To NFT Investing ZebPay.
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