Dear Bankless Nation,
When it comes to great NFT projects, we see talented creators, innovative mechanics, and vibrant communities as key strengths.
However, what are the characteristics of bad NFT projects?
What are the key danger signs to look out for?
Below, I’ve rounded up a dozen red flags for your reference as you research new NFT projects. Red flags range from negligence to outright manipulation.
List of NFT red flags
1) Excessive Mint Price
With endless creative possibilities, there is a lot of wiggle room as to what constitutes a “reasonable” NFT Mint price. There is no single right answer here. However, if a new team’s fees are much higher than their predecessors or similar projects, it’s a sign that they’re probably more focused on protecting your ETH.
2) Rough social media activity
An NFT project suddenly messaged you to direct your attention to the impending drop, and you actually saw a tweet about a few hours ago. Now you click on that collection’s profile and notice
1) None of your followers are following the item
2) For a new project, it has a very unusually large number of followers. These are red flags! Legitimate projects don’t get personal attention by DMing or using Web2 ads; they have their own appeal and don’t have to buy followers.
3) Floor price maintenance
Seeing project leaders discussing or struggling to maintain a certain NFT floor price? Then run away, run away quickly. They’re just running a financial plan with little real interest in cultural values or community. This insincerity can lead to all their troubles in the future, so be careful.
4) Abusing Discord
A huge reason for concern is that when the NFT team bans people from asking legitimate questions, it bans its Discord. You want to see projects that are inclusive and forthright, not combative and mysterious. There is no good reason for the team to abuse their moderation duties.
5) No audit
Audit reports from security companies are not perfect, but they do provide some basic security checks. If you’re in Web3, you want to use audited DeFi and NFT projects because unaudited infrastructure is easier to abuse or exploit. The problem is that every audit firm has been inundated with demand lately. Some new NFT projects don’t want to wait forever, so take the chance by launching unaudited infrastructure. Treat such items with caution accordingly.
6) Bad Design
A poorly designed project can lead to bugs, inefficient gas, exploitable mint, and more. Evaluating bad code, etc. is difficult for novices and a lot of non-technical experts, so following those who know more and learning from their judgment is key.
7) Poor quality artwork
If you come across an art project that looks like it was conceived and completed in under an hour by the Fiverr content farm, then maybe it is. So if the NFT team itself doesn’t take their content very seriously, why should you? Remember, there is a huge gulf between tasteful/charming/funny/weird minimalist work and kitsch nonsense. Judge for you, but in my experience the items in this range are self-explanatory
8) Whitelist for sale
A new phenomenon I’m starting to see is NFT teams selling their own NFT whitelists. Wow. This is money grabbing.
Are the creators of the new NFT collection saying their work is “blue chip quality” and will be the next Boring Ape Yacht Club (BAYC)? Does the project’s roadmap metaphorically extend to the moon, or does it claim to be the first NFT marketplace on the moon? Avoid pure rhetoric.
10) Completely anonymous team
There is nothing inherently wrong with having a completely anonymous team. People have a right to privacy, and in many cases, the quality of projects and codebases, etc., will speak for themselves. However, in the worst case, completely anonymous teams can do serious damage, such as increased liquidity, and then have little liability.
11) Lack of track record
Projects that lack NFT experience on their team are more likely to fail than those with only one skilled NFT.
12) Not verified on Etherscan
Verifying your code with Etherscan ensures that the public can work properly on Ethereum. Using unverified smart contracts means you don’t have this fundamental performance guarantee, so you should definitely be aware of this when conducting NFT activity. For example, you can see how the Cool Pets smart contract is verified by its checked state. Be careful with items that don’t have a similar checkmark.
13) Uneven distribution of owners
Let’s assume a 10k PFP project grabs your attention, but you go to its OpenSea collection page and find that the ownership of the project’s NFTs is spread over a few hundred people. It’s an insane concentration of ownership that means all of these people can wield massive influence over the market.
Some of the red flags described above should be automated deal breakers such as Discord abuse. Others, like completely anonymous teams, aren’t always important, but at least they’re worth noting. Get into the habit of spotting these red flags so you can be smarter about your NFT trading behavior.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/bankless-13-dangerous-traits-of-bad-nft-projects/
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