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NFT Drops This Week

Sep 15, 2022 10:04 AM

One of the most exciting times for many upcoming NFT projects is when they finally announce a planned date for when an NFT project drops, when a mint is set to take place and when a project progresses further on its roadmap or the goals set for it on its white paper.

However, with so many NFT projects available to invest in, which NFTs are worth investing in this week that could potentially make a positive return next week or further into the future?

Whilst there is no way of predicting the future of any project, given the huge range of variables surrounding the NFT market, there are certain commonly found factors that tend to be found in successful projects that are often lacking in less successful drops.

Here are some ways to determine which NFT projects you should invest in a drop of, and which ones you should simply drop.

Identifiable Founders

This does not necessarily mean that the founding members of an NFT project need to have been “doxxed” (ie have their real identity be publicly available), but it does mean that project founders and members should have an online presence and a way to verify their purported abilities.

An NFT project should list the members that are involved and ideally link to a social media account or portfolio of work, particularly if the project has somewhat lofty ambitions and goals, as many NFT projects do.

That is not to say that every anonymous project is destined to fail (or, conversely, that every project with identifiable administration is destined to succeed), but if there is no proof that the people who are organising the project can do what they claim, caveat emptor.

A Clear, Communicated Concept And White Paper

You need to know right from the outset what you are actually investing in, and the key to that is a clearly explained and demonstrable concept, as well as a white paper that clearly highlights the background, goals, how these goals will be achieved and the ultimate end product.

If the end goal is to have a set of NFT artworks, the aesthetic or speculative element of the investment needs to be made clear, but if the project is more elaborate, such as a crypto-based metaverse, a blockchain game built on NFTs or access governed through NFTs, this needs to be made clear to investors.

If the white paper is filled not with actionable goals but fantastical ambitions, this is a substantial red flag for the potential viability of the project.

A Transparent Roadmap

Typically, most crypto projects, including NFTs, launch with a white paper that explains the background behind a project, what it aims to do, and typically includes a roadmap of progression with expected timescales for particular milestones to be completed.

Not having a roadmap at this point is a red flag, but a bigger red flag is a bad roadmap that is either overly vague, entirely unrealistic with its expected timeframes or filled with promises that are at best optimistic and at worst fantastical, this is a project to avoid.

This is doubly true if the roadmap is already obsolete with features delayed or abandoned.

Conversely, a project with a realistic roadmap that has already proven to be on schedule is more likely to make it.

A Strong Community

Many NFT projects live and die by their community, both investors and people who communicate and in some cases evangelise for a project.

Defining what makes a good community is difficult and often means interacting with supporters of the project on Discord, Twitter and other widely used platforms.

In some cases, it is about having a positive community spirit, a vibrant environment and a general spirit of welcomeness and invitation. In other cases, such as more structured projects like Axie Infinity, it is about how interested parties can interact, invest and play to earn.

Communication between founders and investors is also an essential quality here, and the more secretive a leadership group is, the more your suspicions should be raised.

An Original Idea

Whenever an idea becomes successful, a lot of people will attempt to capitalise on this success, but whilst early on in the history of NFTs some of these copycat projects would also find success, at this point few of the clone projects will find success.

Instead, look for ideas that are original, unique, desirable, and you are ready to get in on the ground floor.

Bored Ape Yacht Club succeeded not because it was a bunch of apes with silly faces but because it stood out when it was initially minted. Axie Infinity succeeded because they took advantage of the marketplace for NFTs to create a unique form of game. Copying these two will not guarantee money.

Smart Contract Terms (And Dumb Contracts Too)

It is essential, even with a project you like and that has already proven its trust to you that you are aware of what you actually own and what you can actually do with it.

Most NFT projects have royalty payment percentages attached that are automatically taken from every sale, which means that once you factor in the marketplace’s percentage and especially processing fees, you can sometimes lose money on a sale even if you sell at a higher price.

Smart contracts can contain other terms as well, such as the conditions for sale (such as not being able to sell below a specific floor price) and what you are entitled to do with your NFT.

One interesting element of BAYC’s rights agreement is that people who own an NFT in the collection have the right to do with it as they like as a piece of intellectual property, so long as they can prove they own the NFT.

This ended up being a problem for actor and director Seth Green, who planned to work on an animated series starring his Bored Ape but it was put on hold until he managed to get it back.

There are sometimes other rules, such as requiring certain types of wallet, requiring other crypto tokens or NFTs to be owned to sell or a range of other factors depending on the nature of the project.