Tips to consider for investing in NFT project

These days, leaders and elites in various fields are all talking about the future and the connection between the real and virtual worlds, and currently, part of the future is with us. Digital currencies and the possibility of investing in the NFT project have become one of the building blocks of a bridge between the real and virtual worlds.

In this article, we are going to talk more about this communication path to the future and the virtual world and explain what NFT is and what are its types and how to choose the best option for investment from among the multitude of projects; So stay with us until the end of the article.

Concept NFT What is?

NFT Non-fungible token is a rare and unique digital asset. In simpler terms, an NFT is a digital receipt that proves ownership of a good and shows when you bought that good and how much you paid for it. What does the term likeness mean? Any product will be fungible if it can be replaced with a similar product. Therefore, fiat money is fungible or like; Because you can exchange a $1 bill for another $1 bill.

Similarly, digital currencies are like and exchangeable; But NFTs, as the name suggests, are designed to be non-fungible. Therefore, NFT cannot be exchanged for a similar item; Because each NFT represents ownership of a unique asset for which there is no interchangeable equivalent. So note that each NFT represents the ownership history of a unique asset, not the asset itself.

Read more: Getting to know 4 NFT applications in the real world

Getting to know the types of NFT

By now you probably have an overview of NFTs. Now, by looking at the different types of tokens and their different uses, you can take a closer look at this issue and make a more correct decision about investing in the NFT project.

Collectable art

The most common type of NFT is collectible artwork, which is also divided into several different categories:

• Profile Pictures (PFP): You’ve probably seen the NFT collection of monkeys, cats, penguins, cryptopunks, and more. These NFTs are used as social media profile pictures.
• Generative art: It is a unique art that the algorithm produces; But it has a special style like traditional works of art.
• Original Artwork: This model of NFT has the most in common with analog art; Because artists create unique works and turn them into NFT. A work like “every day; “Beeple’s Everydays: The First 5000 Days” is the most famous example of this category.

Picture

Maintaining the copyright of photos has always been a serious problem for photographers. By registering the ownership of the work on the blockchain, NFT creates a kind of digital ownership document for the photographer, and by eliminating the middlemen, the artists benefit more.

Sports collections

If you’ve ever collected Pokémon cards or football players, you should know that NFTs are a more advanced version of these collectibles, and you’ll probably be interested in owning them. One of the popular projects focused on sports and collectibles is NBA Topshots, which sells video clips of iconic moments from NBA games..

Play

In-game items are another type of tradeable collectibles. for example, Sorare It’s a kind of fantasy football game where you can buy player NFT cards. There are many other blockchain and metaverse games where you can buy characters and items or even land.

Investment in real assets NFT project

If you own a property in the real world, you will also have a document showing your ownership; For example, a physical piece of paper that proves you are the owner. However, this type of proof of ownership and paperwork is being phased out. In the future, houses and apartments can be converted into tokens (NFTs) and these NFTs will replace traditional documents.

Music

Music NFT is the certificate of ownership of the original creator of the piece of music. In fact, artists active in this field can sell their music NFT token to anyone. At the same time, they will forever have the right to make any changes in the content of their works.

Read more: What are Film NFT tokens?

Tips to consider for investing in NFT project

Buying and selling and trading NFTs is different from other digital currencies; Because you are buying a valuable work of art that is presented to you in the form of a token. Therefore, in addition to aesthetic and artistic points, you must also consider technical and other issues. Next, we will review six important points that you should pay attention to before investing in the NFT project.

Invest in NFT projects you really like

As a general rule, always buy NFTs you really like. Think to yourself if this NFT goes down in value, would you still like it or would you just buy it for the potential profit?

Getting caught up in the idea of ​​getting rich overnight is really pervasive. We suggest that you do not enter the NFT field with this thinking. A survey shows that 82% of NFT buyers entered this field with the motivation to invest and earn a lot of profit. The interesting point in this survey is that female participants showed more attention to the artistic aspect of NFTs compared to men, and potential profit was their next priority for choosing NFTs.

Consider NFT efficiency

If you doubt the artistic value of NFT, consider its application. Ask yourself what this NFT project can be used for. For example, NFTs are being used these days from funding motion pictures to launching educational platforms. This new technology can also be very useful for gamers.

NFT can be used to access the community, various events, video game assets, etc.; Therefore, the efficiency of NFTs is considered an important criterion in their selection and purchase.

Invest in a rare NFT project

NFTs are often offered in bundles. For example, consider Bored Ape Yacht Club or MekaVerse or PEACEFUL GROUPIES. These NFT collections consist of artworks in NFT format, each with different characteristics.

Sometimes more features equals more NFT value; But sometimes this is not the case, and simpler avatars like Monkey Castle’s basic NFT or Bud Ip are more valuable.

Therefore, if you want to determine if an NFT is worth buying, you should first check the rarity of its properties and look for the NFT with the least similarity to other members of the set. You can see these percentages in the Properties section of the NFT page.

Additionally, checking the properties of an NFT is a great way to verify its legitimacy. Many scam accounts upload copies of popular NFTs; But they cannot copy the Properties section. Therefore, as a security measure, monitor this section.

Read more: What is NFTfi?

Check NFT seller credit

Like Twitter or Instagram, official NFT sellers in markets like OpenSea have a blue verification mark (tick) next to their username to prove that they can be trusted and that their account is not fake. So if you’re looking to buy from a reputable seller like World of Women or Cool Cats NFT, make sure their account is verified.

However, a seal of approval is not always a sure-fire proof of a seller’s legitimacy; Because many reputable NFT sellers operate on certain platforms; But they don’t have a confirmation sign; Just like influencers who haven’t got a blue badge on social media yet. So, if you want to buy from an unverified account, be sure to check the Token Properties section as a backup.

You can also check the seller’s social media accounts to see if they have real followers that can verify their legitimacy.

Read more: What is F-NFT or Split NFT? A different way to buy Gentile Tokens

Consider NFT market fees

When you trade cryptocurrency or buy NFT, you will be charged a fee. For example, Open Sea charges a 2.5% transaction fee from sellers; But NFT buyers do not need to pay transaction fees. This is true for most NFT markets as well.

Meanwhile, some platforms charge fees from both sides of the transaction; For example, Rarible charges a 2.5% commission from the buyer for each transaction. So, before you buy, make sure you are aware of the fees involved in your chosen platform.

NFT liquidity and market volume

NFTs have no specific liquidity; Therefore, you cannot easily convert NFTs into money at any time like cryptocurrencies. This may be problematic for those who invest in NFTs with the goal of making a profit.
In addition to liquidity, it is also important to consider the market size of the NFT industry. At the time of writing, the NFT market size is approximately $40 billion, and this number will increase or decrease depending on the type of NFTs traded.

As you know, the NFT market is still in its infancy. Just a few years ago, hardly anyone was talking about NFTs and selling digital artwork was unheard of. Although this area is in the focus of many people’s attention today, there is a possibility that the popularity and interest of users in non-traditional tokens like many products will subside overnight. Therefore, if you want to buy NFT as a long-term investment, be sure to pay attention to these points.

How to invest successfully in NFT project?

To choose and invest in an NFT project, focus on the following points:

• Design quality
• Development team
• Number of followers
• Community or community of enthusiasts
• Lots of transactions
• Rarity of NFT
• Current price of NFT
• Supported platforms
• The road map of the collection

Important dates such as airdrops and recent events and rewards and sometimes collaborations and partnerships are other important points to consider.

Conclusion

In recent years, NFTs have managed to gain an important place among users. Currently, there is no end in sight to the continued growth in value and desirability of NFTs.

In addition to all the positive events in this industry, there are a lot of fraudsters working in this field and their goal is to make money from the ignorance of users. For this reason, you should be more careful when investing in the NFT project and consider the points we mentioned earlier.

Frequently asked questions