Ever since Crypto Punks and Bored Apes have become million-dollar collectables, Non-Fungible Tokens have exploded and become a staple part of the crypto investors diet. Buying your NFT can be a daunting task, but it doesn’t need to be. If you are a complete newbie to crypto and NFTs, welcome aboard and nice to see that you’re curious about this space.
Table of Contents
What is an NFT?
- NFT stands for non-fungible token.
- “Non-fungible” means that it’s unique and can’t be replaced with something else.
- NFTs are basically blockchain tokens representing a unique digital item.
- NFT can represent almost anything like art, graphics, music, videos, images, etc.
Why buy an NFT?
I recommend starting with the WHY before I show you the HOW and some possible strategies on how to be successful with NFTs.
So why should I pay for buying a silly-looking digital graphic? This is exactly what I thought before diving deeper and biting the bullet on my first NFT. But what I found is that an NFT is bigger than simply collecting a JPEG file. You are investing in amazing digital art or a project that has a solid roadmap that offers future utility (e.g. a metaverse, land or airdrops) for its community.
What should I look for in an NFT?
An NFT project must satisfy the following 5 criteria:
I am seeing so many people getting absolutely wrecked in the NFT space mainly because they are going with hype, and yes there’s a lot of hype! Therefore it’s best to do your own research and ape into high-quality NFT projects. This means it has to meet the following criteria:
Art is of course subjective but there is a clear distinction between good and bad art no matter what your taste is. It is essential to look for an NFT project with good art.
Founding team with experience
The founding team should have proven experience in the crypto and NFT space. This can be verified by their LinkedIn profiles Have LinkedIn profiles or clearly demo previous achievements clearly and have an experienced artist onboard. Avoid faceless characters hiding behind their stupid avatars.
The roadmap should be clear, concise, realistic, and having the keyword ‘metaverse’ is getting a bonus tick in 2022. It is important to check what the project delivered so far, and if their delivery was on time. Don’t be fooled with good art but no substance. The barrier of entry in the NFT space is super low with the key ingredients being make art, a website and smart contract. The projects that you should consider investing in should offer real outcomes, extend their brand, form utility and do it efficiently without the hype. I personally look for NFT projects that will deliver a game in metaverse, reward their long-term investors via airdrops to and/or offer real utility to benefit their holders.
Do popular social influencers follow them on Twitter? Does it get a mention by quality Youtubers who know the NFT space well? The project’s social media channel should have a positive vibe where the community is overall bullish about the project. Avoid any projects with a toxic or over hyped community. I always monitor the Twitter channel and jump into their Discord group before investing in the project.
Trading metrics gives a good vibe
Here are a couple of key trading metrics that I look for in an NFT project
- Floor price: The project’s floor price should have remained steady over the last down trend or bear market.
- Number of owners: High number of owners is good (eg. 6,000 owners per 10,000 items), so if one dumps a bag, it doesn’t drop the overall floor price.
- Number of sellers: You want to find projects where there is low number of sellers.
What this video from Coin Bureau for more information on the above checklist.
Study the trend
The general trend that I’ve observed over the last 12 months is that when crypto is up, NFTs are down and vice versa. People get bored during a crypto bear market so they ape into NFTs to try and get short-term gains.
As seen below via Google Trends, NFTs appear to be gaining a lot of traction and currently overtaking the crypto trend. Other than a crypto bear trend, another reason for this uptrend is the ‘metaverse’ narrative and improve accessibility to buying NFTs via the increasing number of platforms.
Other trends that I’ve noticed so far as follows:
- GIF/Jpeg projects are over saturated and good projects are harder to find.
- Rare NFT collections (like Crypto Punks) will continue to go up in value. People are not selling.
- Ethereum is popular but gas fee is expensive.
- Solana, Polygon and other ecosystems are starting to gain tractor.
- Buying and retaining play to earn NFT assets which can be used later may lead to life changing income.
- Major institutions like Facebook, Walmart, Microsoft and Google getting into the Metaverse space.
Where should I buy an NFT?
There are so many NFT marketplaces to choose from but there are my current top 5:
OpenSea is an Ethereum based NFT marketplace and also is by far and away the most popular platform currently. The downside of this marketplace is the high ETH gas fee when transacting and the lack of support. Competitors are coming so stay tuned!
Check out this guide for buying and selling NFTs via OpenSea.
2. Immutable X
Immutable X was launched in mid 2021 and is one the first layer 2 Ethereum based marketbase. The best thing about this marketplace is that there is no gas fee trading NFTs within the platform. This platform is still new and there’s a bit of water to go under the bridge for improving its features and usability to compete with a big player like OpenSea. Due to its current limitations, I feel the NFTs are largely undervalued and there is good opportunity to capitalise on solid projects.
More information on Immutable X can be found here.
3. Magic Eden
If you are looking for the most reliable NFT marketplace on the Solana network then look no further than Magic Eden. This fantastic marketplace provides easy access to snipe popular and upcoming NFTs, get detailed stats and has a launchpad where you mint new NFTs.
The Binance NFT marketplace consists of some exclusive collectables and upcoming play to earn gaming assets.
VeVe is an app-based marketplace for licensed digital collectables, and the first platform to offer NFTs from brands such as Disney, Marvel, DC, Pixar and Star Wars. The app is really easy to use and you can buy NFTs using your credit card.
New NFT platforms are coming up daily so I recommend staying ahead of the curb by tuning into the Aliens website.
I recommend checking all these platforms and setting up a balanced NFT portfolio for the future. I will share my personal strategy, tips and tricks in the next article so stay tuned.
If you want even more alpha, jump into our Lazy Society Discord server today. We do daily research on the latest NFT tools, airdrop setups, general crypto fundamental news and trading resources.New to crypto? Check this article on how you should always start with the Why? Then, click here for more articles on crypto.