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NFT Pit Avoidance Guide: Don’t forget to do your own research before buying



Original title: "How to Research NFT Projects"

As NFT enters the mainstream, more and more artists and project parties have begun to join the NFT field. Since the beginning of 2021, the monthly trading volume of OpenSea, the largest NFT trading platform, has experienced explosive growth. Among them, the popularity of new projects such as Meebits, Bored Ape Yacht Club, and Ghxsts is one of the main reasons for the substantial growth in trading volume.

However, it should be noted that NFT projects emerge in endlessly, but not every project can usher in success. The ending of most projects is that no one cares about them after the primary market sale ends, lacking long-term vitality. Therefore, when we buy NFT, we need DYOR and do our own research.

Data: NFT sales reached $292 million in the past week: According to data from, NFT sales reached $292 million in the past week alone. The top 5 are Bored Ape Yacht Club, The Sandbox, CryptoPunks, Art Blocks, and Decentraland. (business insider) [2021/12/8 12:58:22]

This article is written by William M. Peaster, the author of Bankless, on how to DYOR NFT, aiming to help everyone find better NFT projects and avoid stepping on the pit.

Rhythm BlockBeats translated the full text as follows.

This four-letter acronym is often used in the DeFi field. The crypto economy is like a wild west. In the end, you can only rely on yourself to research those projects in the crypto field and understand their benefits. After the ins and outs, put your money into it.

The average decline of the NFT concept sector today is 4.01%: Jinse Finance and Economics shows that the average decline of the NFT concept sector today is 4.01%. Among the 26 currencies, 4 rose and 22 fell, among which the leading currencies were: DEP (+5.63%), BONDLY (+2.22%), and NASH (+1.42%). The leading currencies are: NFTX (-15.00%), RARI (-12.34%), SLP (-11.79%). [2021/9/11 23:17:50]

Recently, I came across a tweet posted by trader Alex Krüge, in which he wrote a list of operations on how to DYOR when it comes to DeFi tokens, as follows:

The decentralized trading platform DAOfi launched the NFT fragmentation project On March 17, the decentralized trading platform DAOfi announced the launch of the NFT fragmentation project In order to solve the NFT liquidity problem, DAOfi will encourage artists to fragment NFTs using the ERC-721 standard into ERC20 tokens, and DAOfi's bonding curve will provide liquidity for buyers and sellers of these ERC20 tokens. [2021/3/17 18:52:03]

Recently, I have been researching the DeFi field and the NFT ecosystem, and these steps can help me delve into the DeFi project, which is a great help. Also, my interest was piqued because I thought we could use Alex Krüge's suggestion to look into those NFT projects as well. So in order to make it easier for everyone to study NFT projects, I made some changes to the above list of suggestions.

The average increase of the NFT concept sector today is 7.04%: According to Jinse Finance, the average increase of the NFT concept sector is 7.04% today. Among the 16 currencies, 10 rose and 6 fell, among which the leading currencies were: SAND (+105.67%), SLP (+25.99%), and MANA (+16.54%). The leading currencies are: LAR (-22.30%), MIX (-17.23%), ENJ (-16.00%). [2021/1/22 16:46:09]

And what I need to add is that these research steps can help you understand the newly born NFT projects, which is more effective and necessary. In addition, for those projects that have been born for a long time, you can also use this model to Research it.

For projects in the encryption field, Twitter is a battleground. It doesn’t matter whether they are new or old, almost all high-quality projects will manage their Twitter accounts carefully, and by carefully managing their Twitter accounts, it will be easier for them to connect to some higher-quality resources. In addition, you also need to look at their official website. In most cases, your interaction with the DApp is carried out on the official website, so you need to check it carefully.

Some NFT projects will disclose the list of their team members, but some will remain anonymous, and some project parties will even disclose part of it and part of it anonymously. There is no reference standard for the analysis of the team, it mainly depends on whether you are familiar with these people, their reputation, what projects have been done before, and so on.

You need to understand how the NFT for this project is stored. Whether it is completely on-chain storage, decentralized storage through IPFS, Arweave, etc., or completely stores its metadata off-chain. This is related to the security of your NFT. If a project uses full off-chain storage, if you want to collect it, you can only trust the project party not to do evil, which is very dangerous.

Generally speaking, NFT projects will establish a Discord or Telegram group, and when you want to know about this project, joining these groups is a great way, in which you can feel the pulse of the entire project community , mood and vitality. Moreover, these communities are also good places to conduct secondary market transaction negotiations later.

Although what you need to know is that a person's own point of view may be one-sided, you don't have to rely too much on someone's opinion, and you don't have to overly myth a person, but in order to understand the project situation more comprehensively, conduct a discussion with these NFT holders It is necessary to simply communicate or pay attention to their views. You can search-zce by Twitter hashtag or Reddit.

You can track the trading activity of NFT projects using tools like OpenSea’s ranking page and NonFungible’s Market History Center, which gives you an idea of how these projects have performed both recently and historically.

Additionally, if the NFT project you are researching has its own native token, here are some steps you can take to better understand the fundamentals of NFT-centric assets.

CoinGecko is a great cryptocurrency market data dashboard that makes it easy to find various fundamental metrics about coins. In addition, it also pays great attention to the tokens of new projects, so basically all the tokens you want to know can be found on this website.

Market value refers to the value of tokens that are circulating in a project, fully circulated market value refers to the total value of all tokens in the project after they are fully circulated, and transaction volume refers to the funds traded through these assets in any day, week, month, etc. quantity. These are some of the core metrics you need to focus on when understanding any crypto asset.

What can the native tokens of NFT projects do in the NFT ecosystem? Staking, governance or something else? How many investors have already invested in the tokens and what are their costs? These questions can help you better gauge whether you should invest your money in the program.

You need to do your own research to find the most correct path in this water full of unknown treasures and dangers. The good news is that basically all of the above information is freely searchable on the web, and everyone can become a top-notch NFT researcher by digging deeper and sharing their knowledge.

Original Author: William M. Peaster


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