How to Buy into an NFT Community Collection
0x47e3
May 11th, 2022

Tldr;

  1. The Basics
    1. Twitter, Discord, Website
    2. Blockchain
    3. Multiple NFT Marketplaces
    4. Roadmap
    5. Whitepaper
  2. Tokenomics
    1. Floor Price
    2. Current Value
    3. Valuation of the Collection
    4. Growth Potential
  3. Community Engagement
    1. Founders
      1. Self Doxed
      2. Involved
    2. Members
      1. Minimal Politics
      2. Welcoming
      3. Involved

Foundational Stuff

Before we start analyzing spreadsheets and constructing graphs, there are a few preliminary checks to consider. Does the project have a good brand that appeals to you? Do you like the technology the project uses? Do you believe in the project’s mission?

Twitter, Discord, Website

Every important PFP(Profile Picture) NFT project has a web presence. Twitter is useful for discovering new NFTs and seeing what the different spaces are talking about. Discord has been used to organize communities with the feature to have exclusive chats for members. The last thing that I look for is a website that describes the project’s purpose and plan.

Blockchain

Where the NFT is made makes a world of difference. Ethereum is the main network that people use today, containing around 80% of all NFTs(source). One of the main problems with Ethereum are the transaction fees, known as Gas, which can cost hundreds of dollars which has led to a few alternative chains. Polygon is a Layer 2 solution that charges zero gas using PoS(Proof of Stake) technology. Another cheap and fast, non-ethereum based, blockchain is Solana.

Full disclosure, my company Arthentic uses Polygon to mint NFTs for our artists.

Multiple NFT Marketplaces

The next thing to look at is how many NFT marketplaces the project is listed on. The top marketplace is Opensea with over 600K users. Other important marketplaces include Rarible, Nifty Gateway, and LooksRare. Marketplaces are constantly evolving so make sure to pay attention to any emerging competitors. 

Roadmap

Every good project should have a plan and NFTs are no different. As a potential investor, you should know where the project is headed, and what financial rewards you’ll receive. Roadmaps are usually found on the web page and linked in the discord.

Whitepaper (Optional)

While a lot of NFT projects don't have a whitepage, this detailed document shows the project is a serious contender for investment opportunity. This detailed document will have research to back up their roadmap and calculations of expected returns for members.**
**

Tokenomics

Floor Price

How much does it cost to enter and buy one NFT? This is the floor price. It’s important to consider that many projects have membership tiers, where holders of a specific number of NFTs get more exclusives.

Current Value

How much money has already been raised by the project? This is the number one metric for finding out how popular the project actually is. If most of the NFTs have been bought, that’s a great sign the enterprise will take off.

Valuation of the Collection

How much money is the whole collection worth? Is the total value worth what the project proposes to do? 

Growth Potential

Is the project going to rocket off? This is based on both popularity and potential. If there’s a lot of hype but the project doesn’t do anything, or the project is fantastic but has no following, don’t invest in it. These projects may improve in the future, but it’s a risky investment. NFTs that have a clear path to financial growth are the only collections worth looking at.

Community Engagement

Founders

The leaders of your NFT project should be known and involved. Self-doxing is the term for when the creators of the NFT reveal themselves to the public. If you know the creator’s real identities, you’re less likely to get rug pulled.

Members

Everyone wants to join an inclusive community, if they aren’t welcoming why would you get involved? Check twitter and discord for how the community acts with each other and the outside cryptoworld.

Conclusion

To find the best NFT projects requires a lot of involved research. Hopefully I’ve broken down my method so you can discover amazing communities to join. I’d love to hear about your journey, so please connect with me on twitter!

Arweave TX
142kRf4E0H9dAR3YqE53ZK5vCTgkuGURivB7MC3lsWI
Ethereum Address
0x47e3f1434a0495AEfb8E4AF8486a6862Cd904082
Content Digest
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