Making money with NFTs is not a one-size-fits-all journey. A lot of it has to do with how much crypto you have to begin with. I am most familiar with Open Sea, so most of my experience will relate to my time there, on Twitter, and in Discord servers. I will tell you from the beginning that what works for me, may not work for you, so DYOR.
These overall principles will work for either big or small wallets. You can just get there faster sometimes with deeper pockets. Of course, you can also lose so pay attention:
- Get involved in communities. Some people only rely on YouTube influencers, but the problem with that is most all of them are being paid to promote the projects that they hype about. Of course, that hype can lead to success, but there needs to also be substance in the project. Getting involved in the communities is the best way to get the feel of the vibe. Here is what I look for in a community:
- Approachable leaders with some level of transparency. If the developers and team leaders are never in the chat, I’m out. If no one on the leadership team is doxed, I’m out. Now the idea of being “doxed” has negative connotations for some, but we use the term in the NFT space to say, “This is who I am and you can trust me.” Don’t expect too much personal info, but there at least needs to be something.
- A well-run Discord server is important for many NFT projects. Size isn’t everything here. People often pay for fake members. Hyped up videos add lots of numbers. Rather than numbers, I look for quality conversations and fun.
- Look for art that you like. The PFP (profile picture) craze is here to stay folks. People love NFTs that fit as a social media profile picture. Many of the most successful projects are running with that theme and having a lot of success. Most of the successful PFP projects are large collections produced by generative art software—from 3000 to 10,0000 (or even more).
Besides PFPs, there are many other popular NFTs. Some look like pieces of art you would hang on your wall. Others are video or audio clips (or both).
- Look for collections with themes. If you find a collection that has no unity or continuity, it probably will not sell very well.
- Look at the history and data on Open Sea. For new projects, there will not be much data. But if you see a project that has been on the marketplace for a long time and still has no data, forget about it. Also, if you see a project that has gone downhill for a long time, forget about it. Upward curves are nice (unless they are hitting an all-time peak) I like a series of ups and downs so I can buy the dip. If you find a strong and supportive community in a new project trending up or an established project with ups and downs, that is a good sign. The bottom line is you want to get something that looks like it will carry resale value.
- For large projects, make sure there is a roadmap that is clear and one that you can support. The roadmap tells you where the leaders plan to take the community with the project. It is usually found on their website or Discord server.
- Look for projects with utility. The roadmap with let you know about this. For example, some projects have a "genesis" collection that rewards holders with free airdrops of NFTs down the road. Others have some sort of means to reward holders by letting them earn crypto from a community fund.
If I find a project with a supportive community, good art, a strong roadmap, and good leadership that seems trustworthy, I try to get in at the ground level. Here is what has worked for me:
- Get on a whitelist. This is the group of people selected to mint early on the project for a reduced rate. You would mint on an external site and then your NFT will show up on a secondary Marketplace like Rarible or Open Sea.
- If you cannot get on the whitelist, there is often a public sale that is shortly after the whitelist sale. This can be quite competitive. You have to have money in your Metamask wallet and ready to go, for really large projects. How many you buy for an early mint is up to you, your budget, and how well you think the project will do. I like to at least get 2 if I can afford it.
- If you cannot get a whitelist spot or mint on the public sale, watch the floor price on the marketplace right after. Often people are content to make a very slim profit or they get scared and sell low. This is a good time to buy.
- Buy two or more NFTs per project if you really believe in it. When the project goes public, there will usually be a rise in value of the NFT. Sometimes that value goes way up fast. Other times it takes a few days or weeks to take off.
- NFTs are more like real estate than simply buying and selling crypto on an exchange. The upside is much higher than buying crypto. Often when the crypto market goes down, the NFT market goes up. But you must have a buyer. You can't just sell at will.
I was recently in a project (The Noodles) that took 3 weeks to take off. When it did, the floor price (lowest available NFT) went from .03 to .50 Eth in about 12 hours. Crazy. I know. I woke up that morning, saw the value and quickly listed and sold one. I was holding two others. At this point, I have won no matter what happens. I chose not to list all three because I wanted to hold and see what happened. The prices dipped for about a week back to .2, then took off again and peaked at .75 Eth. I sold another one. That was fun. Then on the next dip, I bought another NFT. Then the project dipped more. Now I am holding. No need to panic. I have already made a decent profit. I will not sell now no matter what unless it goes much higher.
I'm in another project (Bored Ape Mining Club) on Polygon that rewards you for holding one of their genesis apes. Periodically, they airdrop holders free NFTs. Their next airdrop will be 80s themed apes. Its a fun little group. You will not retire early on this project, but it is a safe place to learn about the NFT world and eventually make a little crypto on the side. Their apes are selling around .01 Eth
I wish that I could tell you that every one of my NFT ventures was successful. Some have not been. I actually spent 1 Eth on an NFT that tanked. I lost it all. That one hurt. That was early in my NFT journey. That is why I advise being conservative until you get the feel of the NFT space and the communities.
I said it before and I will say it again, DYOR, but maybe these tips will help you if you are getting started on this fun journey.