How to Analyse NFTs - NFT Research Guide

As the popularity of NFT art continues to skyrocket, finding new and trustworthy projects is becoming an increasingly difficult task. Here is a checklist for when you’re doing research for any crypto or NFT project in 2022.

1. Doxxed NFT Team

First of all, make sure that the team is doxxed. This will minimise the chances of getting scammed as having a doxxed means that the team has put their own reputation on the line. Furthermore, having a doxxed team allows the team to collaborate with alpha groups, top-tier NFT influencers and other NFT projects as having a doxxed team is typically a strict requirement for collaborating with big names in the industry.

It is your money that is involved, so validate that these people really exist. Look out for fake teams, as it is very easy to use an online face generator to create a team that at first glance looks doxxed, but in reality does not exist.

Secondly, ask yourself: how successful the founders were in other projects, and what kind of previous experience might they have with NFTs. By conducting a through background check, You might sometimes find that the team has been previously involved in a scam NFT project and it can save You a lot of money.

Investing in the right people is a major factor for success. 

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2. 3D NFT Artwork

The artwork has to be appealing. The NFT designs should preferably be innovative, eye-catching and three dimensional.

3D artwork is a great marketing tool. If you can’t find anything new or eye-catching, stay away as the project is most likely going to fail. 3D Art is also another requirement for collaborating with alpha groups, NFT projects and influencers.

Also, try to pass from derivative NFT projects - the ones that look very similar to the most popular ones.

For example, Kaiju Kongz is a derivative of a highly successful project - Kaiju Kongz. It has to be said, though, that even Kaiju Kongz can be considered a successful NFT project that sold for over 746 ETH volume.

This goes to show that there are no concrete rules when it comes to the NFT world, and everything is different.

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3. Roadmap and NFT Utility

You want to look for unique roadmaps.

If you see projects with the same roadmap, you are less likely to hold it long-term.

Try to stay away from roadmaps that are percentage-based. The roadmap should be something you execute regardless of how much you sell.

Also, try to avoid lottery-based roadmaps. For example, projects that hold too many giveaways. Giveaways should never be the only source of promotion. Those rewards usually come from the mint funds of holders.

4. NFT Supply & Burn Mechanism

Low supply means more demand. The bigger the demand, the higher the floor price.

A great example are genesis collections. Genesis collections are typically a red-flag in the space of NFT-s.

Some NFT projects are also using something called a burn mechanism.

A burn mechanism prevents holders from selling their NFTs for prices that are under the burn price. These burn prices can typically be found on the social media pages of NFT creators.

For example, Kaiju Kongz used the burn mechanism to prevent the floor-price from dropping after the initial NFT mint.

5. NFT Mint Price

Again, the lower the price, the sweeter the deal.

An ideal mint price should be below 0.1ETH, but it really depends on the project. Mint prices should be set in accordance to the demand, so if there's a lot of demand, the mint price should also be higher.

Bored Ape Yacht Club didn’t charge 0.2ETH for their mint - so there really is no reason for others to do so.

6. Mint Structure

A good sign of a healthy NFT project is that they allocate most of the supply to their Whitelisted members. Typically, you should try to find projects that whitelist around 80% of their total supply.

Having around 80% of the total supply reserved for whitelists allows for the project to hold giveaways and to attract more attention, which in the end gives them a better chance of selling out the entire collection.

7. Marketing Strategy

The best marketing tool should be the artwork and roadmap. If those two are there, the project should grow organically without any problem. After all, innovation & branding drives attention, not marketing budgets.

Mark Cuban has once said: "If I only had more money for marketing, I could build a brand, then everyone will come rushing to me and buy". Except, that never works. Marketing dollars never build brands. Product satisfaction and execution build brands."

This is especially true in the NFT space where there are thousands of competitors.

Furthermore, collaborations between famous projects or even celebrity-backed projects. If you see that a project is working with large influencers & other sold-out NFT projects in it's early stages, then it might be a good sign that the project is backed by a well-connected team and that they are going all-in with their marketing.

However, many garbage projects often collaborate with anything and everything. You should look for projects that can attract high-value collaborations only.

Furthermore, if an NFT project is listed on an NFT calendar website, such as NFTrelease.app, then it might be another great sign of a well-developed marketing strategy.

8. NFT Community

First and foremost, make sure that the community really exists, and it's not fake.

To verify the community of an NFT project, check their Twitter followers, Twitter likes, Discord Size, Discord online members, Discord chat reactions.

Some projects even go as far as hiring a team of discord chat activity members to drive up the conversation in their Discord which in turn attracts new investors, thinking that the community is very active.

Always verify that the conversations held in the Discord are genuine conversations, not random sentences going back and fourth by the same members.

9. Keep These Things in Mind When Minting

Here is a checklist of what You should keep in mind when the NFT project is starting to mint.

- Never be the first one to buy during mint! This allows others to test that the project is safe, and good to go.

- Prefer to mint as late as possible while making sure you are able to mint in time. This ensures there is a high chance of the project selling out.

-Look at secondary sales. If people buy a lot on secondary markets during the WL sale, it is a good sign as they are bullish about the project. 

For more tips and tricks about cryptocurrency and NFTs, check out Coinboosts.