NFTs are one of the foundations of web3. This series will introduce NFTs through 30 short articles, allowing everyone to understand and master the relevant knowledge about NFTs from scratch.
Alright, in the previous sections, we learned about various NFT markets and the classification of NFTs. Now, let's think about which NFT to buy.
I believe that friends who have read this article are at least serious about NFTs. People who just want to buy an NFT wouldn't bother to learn so much and would simply search for a post on how to buy NFTs. So, I can assume that you, who are currently reading this article, want to have a deep understanding of NFTs rather than blindly following the trend and buying one.
Just like in life, there are three big questions: "Who am I, where do I come from, and where am I going?" Buying NFTs also involves three big questions: "Should I buy, how do I buy, and what should I buy?" It's good to think about these questions as they can help us understand our own needs and demands better. For each person, the answers will be different.
Each of us has different personal circumstances, preferences, and risk tolerance. So, when it comes to what NFT to buy, I really can't give an answer like "Buy XX, it's good." There is a useful concept: "Buy something you like and can afford within your consumption capacity," and don't buy something you can't afford.
Now, if you want to become a professional NFT trader or want to make money by speculating on NFTs, I can only say that it is a highly risky endeavor. Most people will fail in such a game, as it is a game for capital and professional traders. I'm not saying this to tell you that "NFTs cannot make money," but to remind you that this is a high-risk game. You need to stay rational and be prepared to face the risks.
Although I cannot provide a specific buying list, I can give some frameworks to help us evaluate NFT projects. When we have enough understanding, we will naturally make choices that suit ourselves.
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What unique advantages or innovations does this NFT have?
- Does it have new gameplay?
- Does it have different mechanisms compared to other NFTs?
- Does it have excellent artistic content?
- Does it have good community operations? etc. Understand why this NFT is good and why it is worth buying.
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Team composition and experience.
People are important. In the crypto world, although there is a certain level of anonymity, I still want to emphasize the importance of people. When you buy an NFT, it's like buying stocks in the NFT project. The potential for the project's development is determined by the project team. Understand the team composition, the team's past project experience, and the experience of the main team members, etc. -
Project situation.
- What is the goal of this NFT? To build a community? To create a brand? Why are they doing this NFT?
- How is the foundational work? Is the external promotion rational or overly emotional?
- Is the roadmap clear? Mainly look at whether the goals with deadlines have been completed and how they were completed.
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Holder situation.
Go to platforms like Opensea and Dune to understand the holder situation of the project, such as famous individuals, how many whales there are, and how many people hold the entire project. If a large number of NFTs are held by a few people, the growth of this project is worrying and carries significant risks. -
Trading situation.
Look at the price changes, trading volume, and liquidity of the NFT over a week, month, or year. For projects with low liquidity, except for classic NFTs (such as Punks), most NFTs require risk prevention.
Alright, I've briefly discussed what NFTs to buy and shared some thoughts around this question. NFTs are good things, and we should objectively and rationally face them. We need to understand that they are manifestations of the value of a project and represent the value of the project.
Avoid blindly following the crowd (!FOMO). If you are investing in NFTs, increase your risk prevention awareness and place orders only after sufficient understanding of the project.