A Guide To Buying The Right NFTs

What To Look For When Buying JPEGs

What I look for in NFT Projects:

  • First and foremost, let’s not beat around the bush. We want to make money. We want to buy projects that will increase in value from the time we bought them. I don’t want you to think I’m some out-of-touch idealist who thinks that people are buying NFTs without this being their primary motivator. That’s ok.
  • Support projects that are committed to creating a better Metaverse. The Metaverse is the social layer for Web 3.0. I’m going to talk a lot about this. We want to create a better social layer than the current — 12-YEAR-OLD GIRLS KILLING THEMSELVES AT ALARMING RATES — Web 2.0. This is actually our chance to create a better social network. Please bring that into your heart. Let’s do this with consciousness and awareness. Let’s support transparent, value-driven projects.

First, The Risks

Buying these is not like stock trading and it’s not even like crypto investing. NFTs aren’t fractional which means they have far less liquidity. This means that price moves are dramatic and harsh. Your NFTs will likely fluctuate 25%-100% daily. Keep your cool. Keeping your cool is a lot easier if you don’t have your mortgage on the line…

My NFT Strategy:

Some of my rules for buying NFTs:

I always buy at least three NFTs of the same generation. You don’t want to be caught in the soul-wrenching process of deciding if right now is the time to sell that rapidly increasing (or decreasing) NFT.

  • The first is sold to cover your investment — that means I want to sell it when it’s at about a 3–5x.
  • I sell the second one at or around a 10x.
  • The final one is just the sprinkles on top. I hold that one and I hope I get rich.

Do I mint NFTs?

I don’t worry too much about the mints. If I come across them I come across them. But it’s simply not possible to look at everything, and there’s so much garbage. So I’ll browse, but I’m comfortable with the fact that we’re so early, any solid buy today is a good buy, even if it’s not at mint date.

How do I analyze an NFT Project?

You should absolutely read this insightful thread. I’ve incorporated many of her points into my own analysis process.

Metrics

I want to make sure that the fundamentals behind the project check out.

Team

In many cases, the teams are anonymous which makes analyzing them hard. In that case, I am looking at their community engagement, their professionalism, and their vocalized vision. I always reach out to the team, both to ask questions and to just get a sense of their commitment.

Community

I am looking for dedicated, positive, motivated communities. I want to see community members identifying with their NFTs. That means fan-art, printing their NFTs, adding to the lore, attending and organizing meetups, and just generally being involved with the project. The bottom line is that it should be clear that there’s some value associated with being a part of their community.

The Art

This is really important. The art should be visually appealing, interesting, dynamic, and eye-catching. However, it is very important to focus on the art of their “floor” NFTs, the basic ones that most people are buying. They also need to be dynamic and diverse. If they all pretty much look the same, the whole project will suffer.

Utility

The NFT should serve some type of utility. Airdrops are nice, but what value will those airdrops provide? Airdrops to worthless NFTs will also be worthless.

Vision

I’m not calling this a roadmap because what most projects call a roadmap is basically a vague outline of their future operations. But that’s what we’re buying into – a vision. A vision of what this organization will be, what it will stand for, how it will use its money. I want to know that the team is in it for the long term, and committed to that vision on more than just a purely monetary level.

A Little Unsolicited Advice

I love unsolicited advice so I imagine you do too. I think that the most powerful investment mindset you can have is to truly internalize that how much money you have now is how much you’re supposed to have and that how much you will make is also set. This allows you to approach each investment decision without baggage and clinging to past decisions, or fear about the future — the two enemies of clarity.

Conclusion

That’s really it. Follow me for my analysis and thoughts. Drop me a comment. Let me know if there’s a project that I should look at, but give me something constructive to go, don’t just shill me.

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