How to know a good NFT to buy.
Two days ago,I was discussing with a friend about the potential of NFT in the crypto world. He asked me a question that got me thinking.
What was his question you did probably wonder? His question -How do you know a good NFT to buy or invest in ? It got me thinking because some people might not know how to detect a good NFT to buy.
This prompted me to write this article. One thing I always advocate when it comes to buying or investing in cryptocurrencies is that you should have the knowledge of what you are investing in.
Before we proceed, what is NFT?
NFT simply means non-fungible( they have disctinctive value)token.That means it's a unique and non-interchangeble unit of data stored on a digital ledger using blockchain (either ethereum, Solana or polygon) technology to establish proof of ownership.
https://www.google.com/amp/s/www.airtrights.me/en/nuova-asta-nft-di-christies...
According to Matty@DCLBlogger everything digital can be NFT such as art, subscription,access, discount card,game cards, virtual card, domain name,meme, identity,3D models,virtual land,virtual let etc. Literally anything. NFT industry is growing day by day. New projects spring up every day and this where it is crucial as an investor to know those parameters that determines a good NFT project.
These parameters are:
1.The Roadmap of the NFT:
it is always good to check the road map of any NFT. This will help you to know or ascertain what the founders have in mind for the future. It is like a 'whitepaper' of the NFT. This is usually seen in the discord account of the NFT.2.Utility:
This refer to the use case of the NFT . What the NFT can be used for. It is what gives the NFT value. There should be something the NFT offers or does that can attract investors.Some times, an NFT project can partner with a gaming industry where you play to earn.3.Rarity/unique:
The more rare and unique an NFT is,the more the value it will accrue due to its scarcity and perculiarty. This usually increases the price of the NFT.4.Number of items:
This refers to the number of NFT in circulation. This is essential because the amount of NFT in circulation determines how fast the price can go up or not. It is just like the total supply of the NFT.5.Floor price:
This is sometimes referred to as the price floor. It is the lowest price of any NFT. So as an investor you should look at for the floor price because it helps determine how viable the project can be.6.Volume traded:
This refers volume of the NFT traded.How much is sold and bought during a period of time. This can be checked from their opensea account, Twitter account and discord group.Supply and demand bring value, it is necessary to find a project with high volume and low floor price .
Remember when there is limited supply with more purchases floor prices increase just like in fungible tokens.
