Guide To NFT Investing – How To Find The Best NFT Projects

The rapidly growing and changing pace of digital artwork and collectibles has created a breeding ground for scammers and other people anonymously out for your money.

It is not only sad for new projects trying to build a reputation, but also for the people that lose their money from being scammed.

With several NFT projects in circulation, choosing the one that will boom or flop can be difficult. There is no magic crystal ball you can use, but there are some basic strategies that can help you find decent or even great projects.

White paper or Road map

A good way to check the authenticity of a recently found NFT project is the White paper or Road map.

An NFT White paper is a document that maps out the strategies and goals of the NFT project you’re currently interested in to communicate its long-term worth.

NFT road maps typically include plans for growth and marketing, long and short-term goals, and key project milestones. As with a regular business, it needs a clear mission and vision. 

One needs to consider how it is built up, what makes it special from others and how much effort was given to fitting the pieces together. Are their goals feasible or not? Are they overpromising the stars and the moon? If they are, it’s usually a red flag.

Community

Generally, community-driven projects are the most successful. A culture has been created within a community, and culture creates a following.

A good NFT project should have a healthy community following. The most successful projects are typically the ones with the most engagements. Investing in an NFT project means being a part of a community; it is more than just owning an art piece.

It is a good indicator of a project with potential success if a community passionately speaks about it.

Shared values and culture are key for a successful NFT project.

Social presence

Although this is a no-brainer, it is still something one should pay attention to. Thus far, NFT projects are mainly online, which means that having a social media presence is of utmost importance – not just the follower backing of the project, but also their activity and tone of voice.

An NFT project without social media visibility will have issues with finding owners. Do they have a Discord channel, Twitter account, or even Telegram? Where are they present? Is their Discord a simple version, or does it have a professional structure with developers?

Look for activities and engagement from followers and the founders and the number of followers on their social media accounts.

Be careful of projects that have artificially inflated their social media followers. One way to see this is by monitoring the amount of engagement versus the number of followers. If there is a huge discrepancy between the Twitter followers and Discord members, for example, it could signal a red flag.

Doxxed team

Creators and Founders play a huge role in the future success of an NFT project. It is crucial to understand that investing in an NFT means investing in the teams (humans) behind it.

Utter transparency is key!

Project founders need to have some transparency to build trust with potential investors. Several owners hide behind anonymity and run away when problems like a mixup with the transfer of ownership and metadata arise.

Transparency clarifies what the project is and how the founders will achieve it. Some questions to ask are; what kind of people are they? Is this the type of project you want to be associated with? Are they in this for the long haul or a quick flip?

Marketing

The marketing of a project is of utmost importance. It is best to invest in projects with active marketing activities and a plan to reach out to a wider audience. It is usually not a good sign if only a small group knows about a project. This will drive the value of the project downwards when there are no frequent sales. A good long term project will focus on growing its presence even after the NFT launch has ended.