top of page

Which NFTs to Invest in? Guidance on how to select projects.



Introduction


The year 2021 was undoubtedly "the year of the NFT." From Bored Ape Yacht Club on Ethereum, to Solana Monkey Business on Solana, there has certainly been no shortage of projects and they have been the talk of the town. With the huge number of projects launched, however, it can become difficult to tell which projects are solid and which are designed to make 'cash'. In fact, one of the main questions that Cryptohubble analysts are asked is "what makes a good NFT project?", ''which NFTs can I invest in?".



We've mentioned various NFTs projects over time, analyzing them and discussing them with members of their respective communities, creators included. However, we have never given you a straight answer to this difficult question.


The purpose of this report is to discuss the key aspects of NFT projects and primarily, to try to answer the question

"What are those aspects that make a project solid and reliable?"


DISCLAIMER: THIS IS NOT FINANCIAL OR INVESTMENT CONSULTING. You alone are responsible for any decision and you alone are responsible for the results.


The projects behind the NFTs



Community-Driven

There are different types of projects in the NFT landscape.

Most of them are based on their community, as in the case of Solana Monkey Business (SMB) mint on the Solana blockchain.


In fact, the community of owners (collectors) has created the MonkeDAO, a DAO with the aim of cooperating, sharing information and opinions for the benefit of their project, to grow in monetary level and visibility. Another similar example is CyberKongz on the Ethereum blockchain, where the project is completely decentralized and managed by the owners through voting within their DAO.



People love to feel part of something, especially if they can also benefit financially from it. NFTs communities are born for this reason. Note that the stronger the community, the more FOMO (fear of missing the opportunity) will be perceived by all those who are not involved in the project, causing a direct effect on the evaluation of NFTs, just like in crypto projects.


Building a solid community, creating that sense of involvement for those who are part of it, is identical to the concept of brand loyalty. Brand loyalty in fact is defined as the positive association that a customer/retail feels towards a specific brand or product.

Let's face it ... We all have a favorite brand.


This is the number one factor that transforms an NFT project from a simple "JPEG" to a sought-after and legitimately valuable resource. NFTs therefore pivot a lot on brand loyalty by taking the status of "belonging" to the next level:

By owning that NFT associated with a strong and "exclusive" community, you essentially become part of that brand. That's why there are so many NFT profile pictures (PFPs) on Twitter, Discord, etc. You can think of NFTs as a membership card to an exclusive club that no one can take away from you, where members take pride in being a part of it and demonstrate it daily on social platforms.


Going back to the MonkeDAO example, in order to join that club every member must own at least one Solana Monkey Business. There are only 5,000 SMB NFTs and they have all been minted. This means that in order for a new member to join the MonkeDAO community, they will need to purchase an SMB from an existing owner. By adding value to the project and the community, there will be fewer and fewer owners willing to part with their pixelated monkeys, as it would mean selling their membership card, thus abandoning the community and its benefits.



Gaming NFTs (play to earn)

Beyond the community concept at the center of it all, many NFTs projects have use cases that go beyond access to an exclusive club or DAO. An example of this is the use of NFTs to represent characters, items, properties, trading cards, and more in a video game. Innovation is particularly important in this area, in fact, many play to earn video games have emerged in recent years that use blockchain technology within their system. The play to earn is a blockchain-based game structure that, using nfts and governance tokens, rewards users through rewards: the more you play the more rewards and nfts you get.


Many play to earn games already exist, one of the most established is Axie Infinity: an online game built on the Ethereum blockchain, players can earn Axie Infinity Shards (AXS) cryptocurrency by playing.


AXS tokens can be traded on many of the major cryptocurrency exchanges, such as FTX or Crypto.com. The game uses creatures in the form of non-fungible tokens (NFTs) that can be bought, sold, traded, and bred to fight each other and earn AXS tokens.



Although with different features, even our beloved The Sandbox is a play to earn game. Users in fact have the opportunity to receive rewards in $SAND and get nfts, completing missions in the game.


Gaming NFTs with the formula of play to earn are now on the agenda, so it is important to know how to select the projects where it is worth investing their funds. We have been monitoring for some time a series of play to earn projects that we find interesting, some of which are already available in beta version while others have yet to be released. We will deepen in the coming days each of these projects, for now we will just tell you what they are:




Utility-based NFT

Another example of an NFT project is a utility-based project that creates value for NFT miners and owners by providing "utility" to the token. If a project creates a "use" for the NFT, demand can increase and with it, the incentive to hold the token. There are many projects that offer incentives and benefits for owning one of their NFTs: a good example is GenesysGo's Shadowy Super Coder (SSC) collection on the Solana blockchain.


GenesysGo offered some incentives and benefits from the beginning to mine and hold (keep) their SSC collection:


Once all 10,000 NFT SSCs were mined , GenesysGo offered all nft owners free use of the GenesysGo RPC network until the end of 2021.


In addition, anyone in possession of a Shadowy Super Coder NFT at the time of airdrop received 10,000 GenGo tokens: this is equivalent to the full allocation of 100 million seed tokens.


For projects that have already established a community (as in the case of GenesysGo), providing incentives for their NFT owners and rewarding those who contribute to the project is essential to maintain and strengthen their community. In fact, the team behind the project decided to offer their ecosystem tokens directly to their NFT owners, in this way they have essentially decentralized their protocol and its governance, adding additional value to their NFTs.


It's this kind of utility and incentive program that ensures that the community maintains brand loyalty while attracting new users who otherwise wouldn't have heard of the protocol.




Useless NFT

We've talked in depth about what makes a project an attractive value proposition. However, the report wouldn't be complete without discussing some alerts that everyone should have in mind.



This above is a great example of a shameless money grab. What does Snoop Dogg need to make an NFT? Yes, he's an NFT fan, but what does he know about creating and managing an NFT community? What happens after the mintage? Snoop Dogg certainly won't be on Discord or another platform interacting with the community. The only potentially valuable outlet is the artist. However, as you can see from the marketplaces, Snoop Dog has already created 2 collections of NFTs.


Creating art, undermining, copying and pasting, undermining again....

I don't blame him: it's a profitable business model that works to date, but what's left for miners and owners?


We can make some comparisons between all these NFTs projects and the ICO craze in 2017/2018: look where most of those tokens are now. So we wonder where the floor price of these NFTs will be in 6-12 months? We simply find it ridiculous that having 2 NFTs projects is considered a strength.


These types of low IQ "projects" are meant to exploit and abuse a celebrity's name: "if Snoop Dogg is involved, it must be a good project! He makes good music!"




Comments


Iscriviti alla Newsletter

 

Grazie per l'iscrizione!

Latest Articles

bottom of page