The rising popularity of non-fungible tokens (NFTs) is attracting thousands of new investors to hot projects and enriching NFT platforms such as OpenSea and Nifty Gateway along with creating a new class of NFT millionaires who got in on the ground floor of some of the most iconic drops. But how do you find the next Bored Apes or CryptoPunks before they go viral?
What is an NFT?
An NFT is a non-transferable unit of data that is stored on the blockchain. NFTs can be linked to any reproducible digital item, including audio, video, and images.
Because NFTs have a wide range of applications, their popularity has skyrocketed. These tokens promise digital collectibles ownership and the possibility for any user, including projects, to create an NFT on a blockchain.
So, many designers and artists have begun to work on NFT projects in an effort to create unique digital items while also earning money as a result of their development. Through the process they learned how to promote NFTs in order to increase value to the tokens and make a profit from their sale. In this respect social media such as Twitter and Discord are key in getting the word out and creating buzz.
What causes NFTs to be valuable?
Cryptocurrencies and related technologies are revealing novel methods of earning money. Millions of dollars are being invested in crypto assets in order to profit and become richer. Since NFTs are a recent development they were not the first choice of investors, yet now everyone seems to want to ape in.
The number of applications for non-fungible tokens is growing. For example, users earning free tokens by playing games and exchanging those tokens for real currency or other valuable assets. Non-fungible tokens can now be used in a broad variety of situations, which drives further adoption and investment.
NFTs empower artists and creators
Many artists and creators have used NFTs to sell their work online. To reach profitable markets, this token eliminates the need for an agent or broker. Tokens can be created by the artist in order to sell ownership of his artwork to investors.
Non-fungible tokens are one-of-a-kind and cannot be forged. The creators only have a few non-fungible tokens. Their scarcity increases their value, and many people want to own these digital collectibles.
The value of NFTs can rise significantly over time, and people are already selling their NFTs at high prices. These resaleable tokens have grown in value as digital assets. New NFT projects emerge on a regular basis.
You can own a rare NFT that can be resold for a significantly higher price than the original price paid. That is how investing in profitable NFT projects may help you make a lot of money.
How to locate valuable NFT Projects?
Pay attention to the following factors if you want to find the best NFT projects on your own
– Does the NFT have Utility?
NFTs gain value when they are linked to valuable things in the real world. When creators use these tokens to represent physical items, they gain value in the digital world. Ask yourself, what will this be used for? What other uses could it have?
Many designers use NFTs to represent spells, power-ups, and other items in video games. These tokens are used by gamers to purchase resources, character clothing, and other items.
An NFT is pointless if it can’t be used in the real world. When a token is useless, demand will be low. When it is linked to important items, its demand rises. As a result, look for NFTs associated with popular items.
– Is it Rare?
An NFT project that offers rare tokens is always a good investment. Renowned artists are now using non-fungible tokens to represent their works of art. Paintings and other works of art are one-of-a-kind. NFT projects sell these items to art enthusiasts via their tokens. You can use the token to purchase such in-demand items and then resell them at much higher prices.
– Does the Project have a Strong Community?
The larger the community, the more investors and buyers will flock to the NFT project. The size of the community can have a significant impact on the project’s popularity. When thousands of users talk about and promote these rare tokens, demand for them will rise. So, if you have an NFT from such a project, you can sell it at a profit!
– Partnerships and Expansion
Look at the project roadmap to see if any planned partnerships with other projects or brands are on the horizon. Adidas recently bought a Bored Ape and now there is linkage between these two brands. This is the kind of synergy you want in a project and an NFT.
Because of its uniqueness and large community size, the NFT project you choose should grow quickly. Due to limited supply and rising demand, the token should become increasingly scarce. When the time comes to sell your token, you should have no trouble finding buyers. The token’s scarcity and popularity will automatically increase its value.
-Who is the Team?
Who is the team behind the project? Are they public (fully doxed) or hiding behind fake names and avatars? A good team will not be scared to show their names and faces. They fully believe in the project and are all-in. You will want to make sure that the artist and the team have a successful track record and in the best case an existing following. Check their work and project history. Do you think they have the skills to make the project successful? Do they put rewarding the community first or are they only interested in their own profit? A great team will always find a way to lead the project to success.
The above-mentioned factors may take some time to evaluate. To find the most profitable NFT projects, use sites like Upcoming NFT that provide comprehensive information on upcoming NFT projects and drops. Also check the aptly named NFT Calendar for up to date info on projects that are creating a buzz.
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Jay Speakman is a technology writer based in San Francisco, California. He writes on the topics of blockchain, cryptocurrency, DeFi and other disruptive technologies. Clients include Avalanche, Be[in]Crypto, Trust Machines and several blogs devoted to blockchain gaming. He will not rest until fiat currency is defeated.