How to look for the right NFT project

2022-03-17, 07:38

1. 2021 has been an extremely important and pivotal year for NFT projects and assets.

2. There are a number of factors to consider when selecting an NFT project such as floor price, community, utility and more.

3. You can check out the Gate.io NFT auction platform for great NFTs.

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A Pivotal Year For NFTs

2021 was a pivotal year for NFTs. Countless new NFT projects flooded the market, different celebrities joined in the craze and spent crazy amounts of money to acquire some of the really sought-after artworks. Even in 2022, the NFT hype does not show any signs of subsiding. With more and more development in technology, new user-oriented marketplaces emerging and more artists and traders participating, the industry is set to grow further.

In such a rapidly evolving environment it is very difficult for newcomers to find a place to get started. Today, we help you by giving a brief intro about how you can choose the right NFT project and get going.

Understanding NFTs

By now almost everyone knows that NFT stands for a non-fungible token but what exactly does non-fungible imply? Simply put, an NFT can be any piece of digital art, media, music, video, memes, or in-game objects. These tokens are stored on the blockchain. Each NFT is totally unique and this exclusively is what makes them so valuable. Buying an NFT makes you the owner of this unique digital asset.

NFTs have really revolutionized the art world. Now artists do not have to rely on old fashioned ways to sell their work (like art galleries for instance). With NFTs they have a quick, easy, and secure way to monetize their work and receive the recognition that they deserve.

The best thing about NFTs is that they are not just limited to digital art. The utilities of NFTs are endless and there is something for everyone in this space.

Factors to Consider Before Buying an NFT

The first thing that you need before buying an NFT is some cryptocurrency in your crypto wallet. The most popular cryptocurrency for NFTs is Ethereum. Once you have Ethereum in your crypto wallet, you can head over to an NFT marketplace like OpenSea or LooksRare and make your purchase. Solana is also increasingly becoming popular as a cryptocurrency of choice for NFTs.

Some of the factors that you should consider before making your choice are:

Floor Price
The floor price of a collection is the lowest price that an NFT in that particular collection is selling for. This is not only relevant in terms of your budget but also indicates the performance of the project. If the floor price of the collection is rising then this is a good sign, if it is falling down very rapidly then it shows that the project may be losing momentum.

Creators and Team
This is an important factor. You must carefully look at the history of the team behind the NFT. It is better to back a team that knows what they are doing and have a good track record.

Community
All of the successful NFT projects have one thing in common and that is an active community. These projects communicate with their community via discord and other social media platforms. A healthy and vibrant community generally indicates that the project is a good investment.

Utility
An increasing number of NFT projects come with some real world benefits like access to social clubs, some exclusive content, or airdrops. This might be something worth considering when making your choice.

Roadmap
While some projects are simply collectable digital artworks, others continue to develop their projects and have big plans for the metaverse. Staying tuned to the official blogs of the projects will help you gather information regarding possible brand deals and where the project is likely headed.

How to Identify the Right NFT for You

Most experts are of the opinion that the best NFT for you is the one which you personally like. They suggest that it's better to own an NFT that matches your interests and you can really be excited about it. Rather than trying to figure out where the market is headed and which NFT may become the next big hit, it is better to own something that you can be proud of in the long run.

A generally accepted rule for investing in NFTs is that you should never go all in. Only invest what you can afford to lose. Not every project performs as expected and it is wise to tread carefully. Nevertheless, NFTs can be a valuable addition to your long term investment portfolio. The market is continuing to grow and major brands are stepping in the industry with their line of NFTs.

Lastly, when choosing the perfect NFT project for you, always do your own research before spending your hard earned money. And if you want to check out some interesting NFT projects right now, you can do so on Gate.io right here on our NFT auction platform.

Author: Gate.io Researcher: Chuk U.
Disclaimer:
* This article represents only the views of the observers and does not constitute any investment suggestions.
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