How To Do an NFT Research Before Starting a Project
Though NFTs have been around since 2014; 2021 was the first year that they broke through into the mainstream, disrupting the art world and industries beyond it [1]. Over the span of 12 months, not only has the term permeated the broader culture and made digital asset ownership a more widely-known concept, but the industry has also surged to billions of dollars in monthly trades [2]. In the blockchain universe, 2021 would most likely be known as the year when non-fungible tokens (NFTs) were introduced to the masses as the trading volume crossed $23 billion. Based on a report by decentralized application discovery and analysis platform DappRadar, NFTs growth is 230x from just $100 million in 2020 [3].
So, do you know what is NFT? It is a digital item that can be bought and sold using blockchain technology. But, NFT is not fungible, making it a different type of asset. A sale does not necessarily involve the transfer of the object depicted by the token. Buyers will get a certificate of ownership of the NFT, registered on the blockchain. You have to keep it safe in a digital wallet [4].
What do we need to do before starting the NFT project?
You may have read recently how Beeple sold an NFT for $69 million. While that amount is maybe a bit excessive, it drives home the fact that it’s possible to earn an income with NFTs [5]. But before any creation of NFTs, planning needs to be done before launching and selling your NFT project; because it will save you from possible mistakes in the future.
First of all, before defining the concept of your NFT project, you have to decide what kind of community you will target. Remember that a strong community makes an NFT project successful and popular, so prepare about the demands your targeted community will ask for. Next, plan out the main concept of your NFT project by exploring different NFT projects from the internet and looking at their specifications. Then, you can explore other NFT collections. But, you have to remember that every NFT items need to be unique as it can not be replicated [7].
After deciding your concept and exploring different NFT collections, then you can choose your own content style. It should match your targeted audience as their preferences directly impact the success of an NFT project. Then, choose an attractive yet well-defined project name so the audience would get some idea at first glance about your NFT project. Last but not least is defining your project details of NFT, including timelines, pricing details, and distribution of your NFT items [7].
How can we find out that the NFT project is a good one?
Furthermore, we know that not all NFTs will survive. So, how can we choose the one that will boom? Finding profitable good NFT projects can be difficult. There are lots of things to consider. You can find NFT projects throughout Twitter Space, Clubhouse, etc. At Clubhouse, you can join the discussion about NFT, join Q&A sections, and have the opportunity to interact with the NFT founders. All the discussions are basically live-streamed audio (no video) where self-appointed moderators begin a conversation, during which time they can bring any of their listeners onto the stage as speakers [8]. Because we know that explaining the NFT project by chatting is not enough, and it’s better if we use audio like the clubhouse app. These platforms will allow you to dig deeper into projects and exchange with people that are part of that server.
Moreover, to find good projects of NFT, you need to put some extra effort into that. A good approach that investors would typically use to find good NFTs are, 1) Traction (discord, social, influencers); 2) Team (people invested in the project), and 3) Sales (sales and price movement) [9].
We need to look out for the NFT roadmap that contains the goals and strategies of NFT projects in order to communicate its long-term value. It needs a clear vision and mission. It is also important to know the human behind the project. The founders of these projects need some level of transparency in order to build trust with their possible future investors. Then, you should look out for the community of that NFT, because a lot of NFT marketplace is community-driven. The ones with the most engagement are usually the project which will be the most successful [9].
Study Case: Bored Ape Yacht Club (BAYC)
Let’s take a look at a study case about one of the NFT projects and how we know whether it is a good and profitable NFT project or not. You must know about the Bored Ape Yacht Club (BAYC). In the BAYC, there are 10,000 apes, each with different “properties” varying fur types, facial expressions, clothing, accessories, and more. BAYC is the second biggest NFT project of this kind, behind only CryptoPunks. So, what makes Bored Ape Yacht Club valuable? [10]
When famous people own an NFT, it makes others want to own one too. For example, Jimmy Fallon bought a BAYC and for weeks after used it as a profile picture on Twitter, that’s brought hype on sales, which gives the rising sales volume and also price [10].
Moreover, BAYC also created the Bored Ape Kennel Club for offering owners the opportunity to “adopt” a dog NFT with traits that mimic those of the Bored Apes. It keeps the owners interested. Furthermore, owners could mix their Bored Ape with the serum to create a Mutant Ape NFT. Both Kennel Club and Mutant Ape NFTs sell for a lot, and the Mutant Ape Yacht Club collection’s price has risen in recent weeks [10].
The most important thing is the community of BAYC which has organized meetups in New York and Califonia and there also have been Bored Ape get-togethers in Hong Kong and the UK. Selling your ape is not just selling an NFT, but a community passes too. Owning a Bored Ape NFT gives you full commercial rights to it, and holders are taking advantage of that in some creative ways [10].
Conclusion
Many new projects keep being innovated, and more and more companies throw their hand into the ring, including Enevti.com. Social media platforms, influencers, are all beginning to incorporate NFTs into their business [8]. Before starting your NFT project, you need to do some research, such as knowing your target audiences, planning out the concept, and also defining your project details. But, not all NFTs will survive, so there are some indicators to consider to find out the good project of NFTs, i.e. looking for the traction, the team, and NFT sales.
References:
- https://www.artnews.com/list/art-news/artists/2021-year-of-the-nft-1234614022/cryptopunks-the-og-nfts/
- https://decrypt.co/88636/biggest-crypto-story-2021-nft-boom
- https://www.financialexpress.com/market/nfts-generated-over-23-billion-in-trading-volume-in-2021-amid-craze-for-digital-assets/2390144/
- https://www.livemint.com/technology/nfts-much-hyped-but-how-do-they-work-11639884308143.html
- https://www.pcworld.com/article/561152/new-year-new-you-sale-learn-how-to-make-money-with-nfts-for-just-20.html
- https://www.prestigeonline.com/th/pursuits/art-culture/beeple-nft-art-christies/
- https://medium.com/ember-nft/how-to-plan-an-nft-project-186f2edaff1a
- https://www.theartnewspaper.com/2021/03/05/can-clubhouse-recreate-those-art-world-conversations-we-are-all-missing
- https://uxdesign.cc/what-to-look-for-in-a-good-nft-project-c865e52009c5
- https://www.cnet.com/how-to/bored-ape-yacht-club-nfts-everything-you-need-to-know/
- https://panbeta.com/2021/12/30/nft-bayc-worth-will-increase-34-different-collections-fall/
