Ever wondered how to tell good from bad NFT collections? Why some are sold extremely expensive, while others hardly get any attention? We clarify!
Listen to me! This is by far the best NFT collection you've ever seen. Buy two of these NFTs today and you'll be rich in 5 months and never have to work again.
What initially sounds like a “how to get rich quick guide” usually ends in disappointment and hopelessness. After the dust has settled, you realize relatively quickly: the money is gone. Well, what else would you have done with it? The money has to go to the economy.
The NFT collection doesn't even have to be a scam. Maybe the NFTs just weren't good, maybe it was the artist - or was it the weather? That's why we want to show you which criteria you can use to evaluate an NFT collection, so that you too can keep an eye on potential profit makers in the future.
Buying NFT: What do I have to pay attention to?
As with the successful cryptocurrencies, there are certain criteria for NFT collections that you can use when making your decision. This is not a hundred percent guarantee of success or profit, but it does offer some clues. We start with the most important of all aspects, the
Community
You might think: That's complete nonsense, all the Twitter followers are just bought anyway. However, apart from these fake “community members”, there are also the real ones who are committed to the project and enthusiastically tell their friends about it so that they can tell their friends, etc.
A community doesn't just appear out of nowhere, but of course has to be raised by the founders of the project. I
In often months of diligent work on the channels Discord and Twitter, which are customary for crypto, attempts are made to bring his vision closer to the community. On the other hand, in the case of projects that are already established on the market without real interaction in the community, the question arises to what extent these members are not simply bought.
With the example of the Bored Ape Yacht Club (BAYC), the NFT monkeys, you can see how important the members really are . With over a million followers on Twitter, 171,000 members on Discord and an incredible number of comments and reposts, the BAYC is one of the most successful projects in the NFT space.
The price of a monkey currently starts at 76.5 Ethereum – 659,000 Ethereum have already been traded. Whether a “normal” member can still afford it is another question.
The founders were the first club to develop a unique vision with goals and a story behind it. Tens of thousands of people were emotionally captivated by the millionaires-to-be sitting bored in their yachts and talking about business. Which, in a few lines, also brings us to the next point.
It's the kind of emotion and vision that people want to see in order to like a project and join the community.
Other ways to activate its members are Twitter Spaces, Discord Events or “Ask me anythings”. All of these methods inspire trust in people. After all, that is what the blockchain is all about: “trust”.
The vision and the goals of a project also include the fulfillment of the previously set goals. While the term roadmap isn't always as specific as it is with "usual" crypto projects, following it shows a certain dedication to the project. Continuous promises of developing features are good. But sticking to this in the time you have given yourself is even better .
The BAYC is once again the best example of this:
The team was able to fulfill every single point of the roadmap that was only published in September 2021 - the community was always enthusiastic. Starting with the mobile game, through the Otherdeed Metaverse to the APE Coin. With a market capitalization of 1.5 billion US dollars, it was even able to rank in the top 40 of all cryptocurrencies.
A new trend in NFT collections not having a roadmap can work, but the probability is significantly lower than in the opposite case. In April, Moonbirds was able to sell all NFTs in a very short time without really having a roadmap . The NFT birds are currently still trading from 12.5 Ethereum. The most expensive Moonbird changed hands for an incredible 350 ETH.
The decisive criterion is that the roadmap is adhered to by the team - after all, this leads to an enormous increase in trust, which has a positive effect on the community.
The artist himself
Why is a Beeple selling for $69 million? An Angry Ape but only for $200? Another criterion for evaluating the price of an NFT is the artist. It's no coincidence that NFTs from well-known artists and studios are trading for significantly more money.
In this system, the beneficiaries are primarily those artists who were already able to establish a name for themselves at the beginning of the NFT boom. Just like the makers of BAYC: Yuga Labs.
The example of Beeple shows that an artist does not necessarily have to be known in the NFT space. Although he began in 2007 with his masterpiece "Everydays" - before that he was mainly known for his video animations. He created these for advertisements for top-class artists such as Louis Vuitton, Apple and Justin Bieber.
So it's mainly those who are already known in their mostly artistic profession and who gather a lot of fans around them. In such cases, the community can fall back on a huge trust base and be sure that the artist already has a price on the market.
In the cases of "classical art" there is usually no roadmap, since the subjective feeling of the buyer is in the foreground. The more buyers subjectively consider the work of art to be “expensive”, the higher it is
What better factor to evaluate an NFT than the price itself?
Especially in the early stages of a project, this can be the most difficult criterion, because who can guarantee that the Mint price of 0.1 ETH is really fair now? The criteria already described are excellent here.
In the case of collections that are already established, there is often a “floor price” (minimum price) for a collection, which you can use to see the long-term price trend. If this price trend develops positively over a longer period of time, this is an indication of increased demand for this collection.
In addition to the floor price, you could also consider the average price of a collection, as this represents the midpoint between supply and demand.
The following example based on the “World of Women” collection:
NFT volume development
Although the price has risen since the collection went on sale, it is well below the all-time high of around a year ago. This may also be due to the bear market in the NFT and crypto markets at the moment.
Like price, volume plays a significant role. An increasing volume with a simultaneous price increase is seen as a healthy development: there is brisk demand on the market.
Because what do you as an investor get out of a 10 ETH expensive NFT if you can't find a buyer later?
Using the four evaluation criteria, you should be able to distinguish a good collection from a bad one. We still have to warn you, because practice makes perfect. Many successful NFT traders have learned the hard way in the beginning! But at least you now know “whether you will get rich quick in a few months or not”.
Disclaimer
All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at their own risk.
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