Even as there is an evident decline in interest for NFTs and the sales are reported to drop more than 90 percent in the recent months, more NFT Projects appear on the market.
“Analysis by the website NonFungible, first cited by the Wall Street Journal, found that NFT sales fell to a daily average of 19,000 this week, compared to 225,000 seven months ago” - Independent.
With so many NFT collections on the market it is hard to sort out the promising ones and adjust investment strategy to get the most value. The NFTScout team has prepared a list of basic tips to consider while checking NFT projects. You can check the best NFT projects lists as well as more information on NFT quality and analysis on the website.
Let's first clear out the terminology.
What are NFTs?
Non-fungible tokens (NFTs) are digital assets that are not interchangeable with other assets of the same type. NFTs are unique and therefore can be used to represent items such as digital art, collectibles, game items, and other digital assets.
What to look for while evaluating NFT assets?
Here is a list of things to check and tools that will help with that.
Social activity and Community. Check the community that is built around the project and how engaged and developed it is. The loyalty of the community and its engagement level shows how well the project will stand in the long term. Make sure to check and analyse Twitter and Discord profiles of the NFT. The bigger the traction, the better.
A healthy newly launched NFT project should have a growing number of followers and activity across its media.
Team behind the project. Look at project founders and teams that work on the NFT project. The more credibility there is among the team members the better results they can achieve. Overall success of the project depends on how serious its founders are about long-term development.
Project map. The NFT roadmap outlines the planned development of the project and includes milestones for the creation of the NFTs, growth of the project, and marketing developments related to the project.
Project quality. Check the size and quality of the NFT collection. Pay attention to the utility that the project provides (if any) as well as the range of traits and attributes generated for each token.
Collection rarity. Part of the quality of the NFT project. The more rare tokens are in the collection the more valuable it gets.
Check the NFT project that you consider buying in rarity analysis tools like Rarity.tools, Raritysniper or similar.
To summarise, the key things to look for when evaluating an NFT project are: social activity and community behind the project, the founding team of the project, the project map and it’s stated goals, the quality of the project in its rarity and diversity.