Non-fungible tokens have gained traction worldwide. The NFT industry has surpassed a worth of around 40 million dollars. And the industry is expected to expand even more in the coming years. The much-anticipated Metaverse is yet another industry related to NFTs that has earned billions of dollars. People are buying lands, avatars, and digital collectibles. These assets will eventually become part of the Metaverse. The demand for NFTs and Metaverse is going high. With the increased demand for NFTs, scams, hacks, and phishing attacks have also increased. Hence, it is very important to consider the legitimacy and authenticity of the NFT. Detailed research and understanding of the best NFT marketplace are needed to make a wise decision.
The first step
The first thing that you would do before buying any NFT is collecting information and doing your research about the project.
Getting Information from Reliable resources
Some NFTs get sold out as soon as they are dropped in the marketplace. This happens because people get updates and information through reliable sources like news websites and sometimes even social media. The sources provide information regarding upcoming or new NFT and Metaverse projects. Even before the official announcement is out, people use these sources that give a compiled version of these important news pieces. However, relying on social media and news is not always advisable. Directly visiting a marketplace, understanding the market, and getting information will make things easier.
Things that decide the authenticity of NFTs
1.The legitimacy of the team
The most important signs of the credibility and dependability of an NFT project is the credibility and trustworthiness of the team. If the team offers a rich experience, a track record of launching successful NFTs in the past, and a deep understanding of NFTs, then probably that is the project you must invest in.
If a team has launched NFT projects and NFT marketplaces, then these teams deserve a higher magnitude of attention because they have the potential to do a project far better than the previous ones because of the learning. However, cryptos and NFTs come with their risk. You might not be able to land on the NFT that would give you immediate results, but the team, with its expertise and experience, will be able to build an NFT ecosystem that will be sustainable and robust in the long run. Thus, before investing, one must be well informed about the pros and cons.
2.A Clear Roadmap
The road map is the most important component of a project’s dire vision and mission. If the project has a clear roadmap and it does not seem too far-fetched, then you should probably consider investing in that project. Be cautious of the projects that promise unrealistic and exorbitant returns and benefits in the very short term. In other cases, some NFTs will promise true, self-sustained, and interactive Metaverse and other possible objectives in a year. Such a roadmap should considered a tangible one.
Another aspect to consider is if the roadmap is centered around the community and not self-centered. A clear roadmap that satisfies both these conditions can be regarded as credible and dependable positive signals that would guide you in investing in the NFT project.
An NFT project should act like a community-center. It shouldn’t focus on just numbers. Such NFT projects will insist you complete your KYC/AML formalities while giving you access to the NFTs and information about them. If an NFT project lets you fund your wallet and buy NFTs without completing the verification, you should consider this a red flag. The company and the founders are responsible for the legal and compliance formalities.
4.An active community
Building community has nothing to do with the numbers. It does not matter if they have 10 or 1,00,000 members on the discord channel. They can even have more than 1 million likes on their Twitter handle. But these numbers does not make sense. The community needs to interact with each other and should be able to form a mutual support system for each other.
The launching brand should take the initiative in ensuring that the community stays active. They could reward (irrespective of it involving transactions) irrespective of participation. If a community, fr example, the Discord server has more than 100,000 members on the fifth day of the project, the community probably has not grown as organic as it should have. However, the community is more active if there is gradual, sustainable, and organic growth.
5. Parameters that are specific to numbers.
If you visit an NFT marketplace, you can see the floor price. If many people try to sell the NFTs at floor price or below it, the NFT collection is not that attractive. That might probably be the reason why people are dumping it. NFT marketplace platform will also display a particular NFT. In some cases, you might have to depend on external elements to validate early. Certain NFTs are rare and extremely collectible. If there is one person who’s holding a huge number of NFTs, then probably it is a bad sign. If that person decides to sell all his NFTs, then there will be a huge alteration in the demand and supply, affecting the project’s results and its foundation.
In the sea of NFTs, you only deserve to get the best. It would be best if you learned from your mistakes and choices to make the best choices. If you want to be diligent and meticulous in your decision, you should consider considering all the above points. Though NFT is still in its nascent stage, they are highly likely to be game-changers in various industries and fields.