NFTs are one of the foundations of web3. This series will introduce NFTs through 30 short articles, allowing everyone to understand and master the relevant knowledge about NFTs from scratch.
Alright, in the previous sections, we learned about various NFT markets and the classification of NFTs. Now, let's think about which NFT to buy.
I believe that anyone reading this article is at least someone who takes NFTs seriously. Those who just want to buy an NFT wouldn't bother learning so much and would simply search for a post on how to buy NFTs and start the process. So, I can assume that you, who are currently reading this article, want to delve deeper into understanding NFTs rather than blindly following the trend and buying one.
Just like in life, there are three big questions: "Who am I, where do I come from, and where am I going?" Buying NFTs also involves three big questions: "Should I buy, how do I buy, and what should I buy?" Thinking about these questions is a good thing as it allows us to have a clearer understanding of our needs and demands. For each person, the answers will be different.
Each of us has different personal circumstances, preferences, and risk tolerances. Therefore, when it comes to what NFT to buy, I really can't give an answer like "Buy XX, it's good." One useful concept is to "purchase something you like and can afford within your consumption capacity," and not to buy something you can't afford.
Now, if you want to become a professional NFT trader or want to make money by speculating on NFTs, I can only say that it is a highly risky endeavor. Most people will fail in such a game, as it is a game for capital and professional traders. I'm not saying this to tell you that "NFTs can't make money," but to remind you that this is a high-risk game. You need to stay rational and be prepared to face the risks.
Although I can't provide a specific shopping list, I can give you a framework to evaluate NFT projects. When we have enough understanding, we will naturally make choices that suit ourselves.
1. What unique advantages or innovations does this NFT have?#
- Does it have new gameplay?
- Does it have different mechanisms compared to other NFTs?
- Does it have excellent artistic content?
- Does it have good community management? etc. Understand why this NFT is good and why it is worth buying.
2. Team composition and experience.#
People are important. In the crypto world, although there is a certain level of anonymity, I still want to emphasize the importance of people. When you buy an NFT, it's like buying stocks in the NFT project. The potential for the project's development is determined by the project team. Learn about the team's composition, their past project experiences, and the experiences of the main team members.
3. Project details.#
- What is the purpose of this NFT? To build a community? To create a brand? Why are they doing this NFT?
- How is the foundational work? Is the external promotion rational or overly emotional?
- Is the roadmap clear? Mainly look at whether the goals with deadlines have been completed and how they were completed.
4. Ownership situation.#
Go to platforms like OpenSea and Dune to learn about the ownership situation of the project. Who are the famous holders? How many whales are there? How many people hold the entire project? If a large number of NFTs are held by a few people, the growth of this project is worrying and carries significant risks.
5. Trading situation.#
Look at the price changes, trading volume, and liquidity of the NFT over a week, a month, and a year. For projects with low liquidity, except for classic NFTs (like punks), most NFTs require risk prevention.
Alright, we've briefly discussed what NFTs to buy and shared some thoughts around this question. NFTs are great, and we need to objectively and rationally face them. We need to understand that they are a manifestation of the value of a project and represent the value of the project.
Avoid blindly following the crowd (FOMO). If you're investing in NFTs, increase your risk prevention awareness and place an order only after thoroughly understanding the project.
If you want to learn more, you can find me in these places:
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