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The non-fungible token sector of the cryptocurrency market is one of the hottest trends in the 2021 bull run, and despite a bearish first-half environment, it continues to attract increasing attention in 2022.
NFT markets such as open sea Continuing to see millions of dollars worth of transactions transacted daily, it underscores that there is no shortage of demand for NFTs even in bear market conditions.
Projects like CryptoPunks and BAYC have risen to prominence as blue chips in the NFT ecosystem, but with thousands of other collectibles available for purchase, it can be difficult for even the most experienced gem hunters to find long-term winners.
Here are five things to consider when researching NFT projects:
1. Look at the people behind the project
Many consider the people behind a project to be the most important consideration when buying an NFT, as past performance is often an indicator of future performance.
Seeing which projects they have done in the past, the level of success of each, and their experience in the NFT industry can provide valuable insights into the long-term viability of the project.
Browsing the team members’ Twitter pages and LinkedIn profiles also provides a deeper insight into the level of dedication to the project and the history of activity in the crypto space.
The ability to interact with team members on apps like Discord is even better, as it gives you the opportunity to see how passionate they are about the project and how helpful they are to community members. This is really about getting a better understanding of the personalities of your team members to determine if they are trustworthy enough for you to put your hard-earned money into the project.
Related: Here’s a Beginner’s Guide to Crypto, NFTs, and Metaverse
2. Analyze the project timeline
Having a nice timeline for some major developments planned for the future is a positive sign, as it shows that the project has at least one bigger plan.
Many projects today have very general “copy and paste” roadmaps that don’t provide much depth or substance, so if it looks like at least some effort has been put into crafting a unique long-term vision, that’s better than most projects. Be good.
Still, it’s best to look at the roadmap with some speculation, as it’s a tricky process with many unforeseen pitfalls that can derail even the best intentions.
Related: 5 Reasons to Get Started with DeFi
3. Check the quality of NFT art
Only a fraction of the NFT collectibles available will reach significant valuations and see any significant level of price appreciation for their owners. Keeping this in mind, it’s important to you to really like/like what you’ve bought, as you’re likely to be its owner forever.
Perception can be one of the most subjective things in the human experience, so it’s a disappointing setup to assume an item will do well because you find it aesthetically pleasing. The cryptocurrency market, known for its price volatility, is even more dramatic in the NFT space, so being content with the possibility of long-term holdings is crucial.
4. Evaluate the community behind NFTs
The strength of the community is one of the most important factors for the long-term success and viability of any project in the crypto ecosystem, especially NFTs. Due to the scarcity of each project compared to common cryptocurrencies, a handful of owners must work together to ensure their projects stand out and remain relevant in an increasingly crowded field.
Thanks to a dedicated community, BAYC has grown from an obscure collectible to a multi-billion dollar ecosystem. But don’t come to the conclusion that only a large community can build a good project. Even a small, passionate community can make a big difference.There are many examples of this, take a look at this relatively new project called star card On Astar Network, the community has less than 1,000 members, but the project is already prominent in the DOT ecosystem.
Entering NFT discords is a great way to see why other people like a project, and also to gain in-depth knowledge without much effort. Remember that when it comes to community, quality is more important than quantity, as dedicated community members will be with you through thick and thin. If the Discord group isn’t very active, or is mostly talking about price floors, consider it time to move on to the next item under consideration.
Related: 7 Things to Know Before Investing in Cryptocurrencies
5. Analyze the utility of NFTs
As encryption technology evolves and NFTs become more than simple JPEGs, a new factor to consider is the utility of NFTs.
Does it grant you any special privileges or access to exclusive content? Does it offer you a way to make money through future projects or other income opportunities?
NFT technology goes far beyond mere JPEG, and people are realizing it.A precise example is the aforementioned StarCards project: the team is building a project called Interstellar Exchangethe first NFT governance, provides a fantastic use case for NFT technology.
Now that the crypto market has entered a bear market and ushered in a new market cycle, the next generation of NFTs will have to up the ante to stand out from their predecessors and move the space forward.
At this point in the game, if the NFT project you’re evaluating only offers cool pictures with potential resale value, it’s best to keep going until you find one that will help bring extra value to your portfolio the most Importantly, you absolutely must own a piece of art.