Don’t get it twisted; there are a lot of great NFT projects, and then there are even more horrible ones. If you want to be the next Crypto Punks and take your project to the moon, you need to read this article and get acquainted with some essential concepts.
In the following few paragraphs, I’m going to introduce you to 10 of the most important concepts (my opinions) on how to plan and execute a new NFT project and access other NFT projects.
Disclosure: I am not a financial advisor, and this is not financial advice. If you need financial advice, seek a qualified professional.
1. THE ARTWORK MATTERS MORE THAN THE HYPE
The artwork presented by a project is one of the most important aspects of a project that allows for the project to be noticed and can even be a selling point depending on the premise of the project.
As discussed previously in another article I’ve written, 11 Essential NFT Tips for Beginners, the early stages of NFTs have brought about a lot of copycat projects looking to capitalize on the hype, for example, Apes, Punks, Memes; the list is quite long at this moment.
Projects that include music are also grouped into this category because I’d like to think that AR is more of a design perk than a utility.
Though I will say that AR can be used in the form of utility, like how Meta (previously known as Facebook) showcased the ability to scan QR codes that allow the art to show up in AR/VR in the metaverse.
LET ME CLARIFY “UTILITY”
However, it does need to be said that a LARGE amount of development is halted due to the growth rate of Web 3.0 as a whole.
Using an NFT to prove ownership of big-ticket items such as cars or houses is on the timeline moving forward. But Web 3.0 isn’t ready to support that (yet). So as of right now, the list of Utilities that can be offered looks like this:
Common NFT Utilities:
- Access to Events
- Physical Items: Some NFTs by artists allow people to obtain the physical version of the NFT, like a print.
- Airdrops: It’s pretty standard for NFT projects to give holders additional NFTs and other rewards in the form of tokens, special NFT mints, or access to mints where a previous NFT ownership is required.
- Breeding: Play-to-earn (P2E) game Axie Infinity facilitates the players to breed new in-game characters. In addition to using the characters in the game, they can be sold or rented, offering the holders the potential to earn additional income.
- Fractional Ownership: Some NFTs allow people to purchase a fraction of an NFT. For example, imagine owning a fraction of a Blue Chip Beeple NFT.
- Staking: Financial gains are achieved with many NFT projects when the NFT is sold. Staking allows the NFT to be locked away into the project or another ecosystem to earn a passive income.
Side Note: This Utility list will grow quickly from this point on, with the rate of adoption increasing in 2022, and technological advancement.
But looking for these utilities on a project will generally (my opinion) increase resale value over time and grow a community faster.
2. Web 3.0 interface
Under the circumstances that I spoke about earlier, with the slow growth of web 3.0, this aspect of a project is still limited.
However, a development team that takes the time to craft a well-integrated NFT interface on a website speaks to a solid foundation to grow from, as well as prepare for the subsequent phases of the Web.
This will also decrease the possibility of getting scammed (hopefully).
Web 3.0 anonymous wallet logins and mass minting features on your own website are already being implemented. Nonetheless, they are features to be aware of, and you will see these features be piggybacked and utilized in different ways shortly.
After this, we have staking mechanisms like the “Faction Fleet” feature of the Star Atlas project. These mechanisms are great for displaying analytics and tracking user traffic and support. But also create a single point of contact where you don’t have to move your NFTs around to access different features or utilities.
In my opinion, websites like the Soul Dogs project and its browser-based metaverse “Soul Dog City” are pioneering the next phase for web 3.0 interfaces.
By having centralized access to every aspect of the project, you allow for much more user retention and make the project more accessible for EVERYONE.
3. An Absolutely DOXED Web Development Team (lots of experience with similar projects)
A fair share of NFT development teams like to stay anonymous, and truthfully, I’ve seen projects like that surpass projects with publicly announced teams with bios of past experience.
Dev teams with a lot of experience offer much to a Web 3.0 project. The experience they have does make a difference.
If a dev on a team was a part of a project that was not as successful as it could’ve been, it’s worth noting that that NFT project could have failed for infinite reasons. It would be a good idea to research dev team members as well as the possibility of redemption.
When it comes down to understanding the pace the project aims to work at, is just as much about the experience as it is about consistency and teamwork.
4. Proof of Commitment to Roadmap & Whitepaper
This might depend on the stage you end up finding a project or getting ready to invest in a project. But even in early phases, you can still spot any discontinuities from what the dev team says and what they plan to do versus what happens.
I will always recommend taking time to watch a project before investing, and if you get in before the first mint, to focus more on other items on this list.
Suppose the opportunity arises to catch a glimpse of the team’s commitment, PAY CLOSE ATTENTION, especially if something goes wrong because the recovery or the solution posed by the dev team will spotlight their care and attention to the project and its development.
If you’re creating project, transparency is important and putting out fires when they arrise will show the commitment you have to continue making the project successful.
Keep everything consistent.
5. Community Support
Getting into projects too early could contort precisely where the project support lies. Basically, you have no idea.
However, there are a few things you can look at. Let’s say you look at a project (hypothetically) with a 7,777 NFT mint limit, and there are 30,000 people in the discord before they even announce the mint date and price. Then let’s say it’s about to mint, and that 30,000 increases rapidly.
Regardless of what the numbers are, it will be evident how the community views this project as well as the dedication to the project.
This could be in the form of views, investment of time, retention of new investors, etc. This factor, as you might think, is the factor that makes or breaks a project.
Listening to the community is another key for success.
Scams and Spam
It’s worth noting, too that, the amount of spam and scam messages you get about a project also speaks to the popularity of the project (as unfortunate as that is).
That also means you need to check socials for bot accounts (not real people).
Be aware that some projects have created a fake following to draw in interest and in the end do a rug pull and run off with all the money hat the project made.
I would also suggest (for new people) looking for projects that have a whitelist pre-mint, public mint, and then wait to get marketplace sales going. This is much better than projects where the mint is just open and the
Obvisouly, if you are developing an NFT project don’t scam with the old “bait and switch technique” and try to reduce the amount of scams and bots in your socials.
6. Improvision & Addition of a New or Creative Spin to What Might Already Exist
Because we are still a bit early with not only the projects that have “stood the test of time.” The competitiveness of the market still exists in a way that everyone is looking to improve and stand out to get attention and investment.
So, a good project could just be about making improvements upon a system that was good but could be better.
Generally, and as I’ve said in this article, the number of Apes, Punks, and Doge we currently have is ridiculous. Those are cries for attention and not similar to a project that has good new art but an improvisation on a DAO or staking system you could find with a popular project.
7. Consistent Public Marketplace Sale Volume
Obviously, this also is a statistic you can only see after the public sale. But if you arrive late to a project, marketplace sale volume can be a crucial indicator of not only community support, but also a measure of real-time popularity as well as past popularity.
But some discernment is needed because the volumes can stall out after the first mint or as the project is developing.
If you find yourself witnessing a lot of volume in a very short time, it would be best to wait because that points typically to increased volatility and might cause you not to be able to resell as fast as you want and basically be stuck with an NFT regardless if you’re going to keep it or not.
8. No Floor Sweeping
“Sweeping” is the act of buying up all the lowest priced NFTs on a marketplace to raise the floor price. Floor sweeping is generally seen as a good thing as it is intended to increase the floor price of a project in a marketplace.
If you don’t burn a certain amount while you are sweeping, you end up with really high prices that aren’t necessarily justified.
If a project you get involved with starts talking about sweeping and is trying to get its investors excited about it, I would look to sell, or if it’s put up to a poll for a community decision, perhaps VOTE NO…then again that’s just my opinion.
9. Collaboration With Other Projects
Projects that collaborate with others are set up to position themselves for success whether they make NFTs together or just do AMAs together (ask me anything).
Collaboration opens doors not only to other customer bases but also to create unique products that raise interest and solidify their standing within multiple communities.
Most of the big collaborations come from DAO or staking mechanisms. As many staking platforms now are releasing their own NFTs, which you may be able to stake for high returns.
An example of this is Honey DeFi, where Solana-based projects can stake through Honey and collect Honey’s native currency as passive income, with which they can do anything to create more income or use the income already gained.
Even still, as staking becomes more popular, it may be a good idea to get in with at least one to possibly grow with them.
10. Seed Investment
Projects that plan to expand into the metaverse or into any sector that might require a lot of funding will look for seed investors to help make the vision a reality.
As of right now, NFT startups have raised over $2.6 Billion in seed funding over the past year.
While the standard for smaller projects might only be a few million in total seed funding, achieving that opens up countless opportunities as well as attracting attention from more seed investment (which is why they raise money in rounds instead of one big event).
However, because of the big metaverse push going on right now with big companies diving head-first into the metaverse, (even McDonald’s wants in), there is a bit of a disconnect between the reality of what a project is worth and how much money people are willing to throw at it.
This creates a lot of situations where investors get left holding the bag in projects that build hype until they are overvalued, which is a dangerous place to be as an investor.
To avoid this, I would recommend looking into the full details of coins/projects on Coin Market Cap or any similar website or app to help compare valuations and reasons for differences or similarities.
As I’ll always say, education is critical and the most crucial first step to being successful.
NFTs are in their infancy and things change at a fast pace yet I believe the recommendations and opinions shared in this article are great stepping stones and hopefully set you up for success.
It’s always best to gather as much information as possible before making any serious moves or dedicating your time to a project that may or may not succeed. Keep learning! Here are few article I hand selected that you will find valuable nuggets of information:
- Why Do Artists Hate NFTs? 6 Common Reasons
- How to Get More NFT Exposure: 13 Effective Methods
- Do All NFTs Lose Value? The Facts Explained
Good luck out there and see you on the moon!