Bankless: How to analyze the fundamentals of various NFTs?

With the rapid development and maturity of the NFT concept, we have seen many different forms of NFT, including but not limited to art, PFP, collectibles, Metaverse virtual assets, game props, tools, music, digital land, etc. .

When analyzing a specific NFT, it is important to pay attention to its category. Each category has unique questions, and you must find answers to those questions to effectively judge its value.

This article will focus on a few representative types of NFT assets, and show you what different key elements need to be paid attention to when analyzing the fundamentals of these NFTs.

crypto art

To analyze an artwork NFT, we must first clarify the following six basic questions.

Who is the artist?

Conduct background checks on artists by exploring their bios and backgrounds on other works, websites, and social media. Knowing an artist’s story allows you to understand the people behind the work, as well as their “method” and “original intention” related to NFT in their creative practice, which is very important.

What is the subject matter of the work?

At present, NFT artwork is also divided into many categories, among which concept art, generative art, pixel art, music and photography are the most attractive content in the NFT ecosystem. Therefore, noticing the type of a piece will help you better understand its context and place in the NFT art world. 

What are the technical characteristics of the artwork?

Pay attention to the design of NFTs. Did the artist mint it as an ERC721 token on Ethereum? Or ERC1155 on Polygon? Is the metadata of the work stored through a decentralized storage solution like Arweave, or is the metadata maintained entirely on-chain? Answering these questions will help you understand the technical infrastructure of an artistic NFT.

What are the aesthetic characteristics of a work of art?

The aesthetic value of a work of art boils down to how well the work conveys happiness or unhappiness to the viewer. Therefore, when we look for the aesthetic characteristics of a work, we consider its content, form, visual harmony, white space, etc.

The total number of works and whether they are series works?

Does the artist mint the work as a one-time, 1/1 NFT? 1,000 editions? Or is the work part of a larger interconnected series of works that are being created on an ongoing basis? This often reflects the level of importance that the author attaches to the work. 

How is the market performing for this work?

The work’s initial initial sales data (ETH price and dollar value at the time, etc.) and any subsequent secondary sales data need to be considered comprehensively. We can search for this information from cryptoart.io.

Collectibles/PFPs

Who is the creator?

The talent of the team and the track record in the crypto ecosystem are important. Also consider whether the team is public, semi-public (i.e. some members are pseudonymous or anonymous), or completely anonymous. This is not to say that the Anonymous team itself is bad, it is just that the reliability of Anonymous does come at a discount.

What are the technical characteristics of this series?

Notice on what chain is the NFT minted? What token standard do they use? How are they implemented (is it using ERC721A etc)? How do they handle metadata storage? and many more.

How is the artistic expression?

A portfolio with unforgettable, visually striking, charismatic or unremembered art is always a good sign. But this is also the most subjective part of the analysis process. 

How is the total designed?

Evaluate the total supply of the series. 10,000 or 20,000. It’s also important to look into whether the team retains a significant portion of the overall supply. The creators of goblintown.wtf, for example, keep a tenth of the collection for themselves.

How is the community doing?

Consider the reputation of a project’s community and observe its community activity for yourself.

What does the market for collectibles look like?

You review things like floor price, volume, market cap, number of holders, and more. Reviewing these statistics will help you get the pulse of your project’s marketing activity.

What is the roadmap?

Note the project’s publicly announced plans. Does this collection intentionally have no roadmap, or does it have a massive roadmap full of various future plans?

What use cases are there?

Also note if the collectibles or PFPs in question confer any additional utility, such as being able to use them to earn ERC20 tokens, whitelisting derivatives for holders, participating in DAO governance, etc.

game

Who is the creator?

A team with successful game designers and game veterans is a good sign. In other words, people who make a living from games have the ability to make great games.

What type of game is it?

Online games, role-playing games, sports games, and trading games are some of the more common types in the contemporary NFT gaming scene. Where does the item you are analyzing fit in this scenario? Some types, like MMOs, are more complex, while others are much simpler.

What are the technical characteristics of NFT?

Pay attention to what chain the NFTs are minted on (Ethereum, Polygon, Ronin, Arbitrum, etc.), their token standard, implementation style, etc. The vast majority of current Web3 games are built on low-cost sidechains or Layer 2 (L2) scaling solutions.

How do NFTs affect the overall design of the game?

You want to consider how NFTs are used in the game itself, and how creators use NFTs as a business model.Do they sell NFTs directly to users, and if so, how many, and at what rate? Do they rely on revenue from royalties and in-game economic fees? Does their NFT approach seem thoughtful and sustainable, or clumsy and shortsighted? If a game project seems to be more focused on NFTs than building a truly legitimate game, that’s a red flag. In contrast, Axie Infinity is an example of a team that focuses on gameplay first, and their Axie NFTs focus on serving gameplay itself.

Is the game already online?

Many NFT gaming projects release NFTs before their games are built or playable. Projects that already have playable games are relatively less risky.

What is the roadmap?

Finally, be sure to pay attention to the publicly stated plans of the game development team. What’s next for this project? Have they so far delivered on their previous roadmap plans in time?

Memorial NFTs

I’m not an expert in this category. However, data scientist and NFT historian Chainleft is an authority on the topic, and he recently wrote an insightful article titled “Defining NFTs in a Historical Context”, at the end of the article, Chainleft highlights five fundamental factors , a series of elements that people will focus on when analyzing the collectability of those “recorded history” NFTs, namely “time stamp”, “scarcity”, “creativity”, “technical achievement itself” and “based on which chain casting”.

Bankless: How to analyze the fundamentals of various NFTs?

Metaverse / Digital Land

If you want to analyze a virtual land NFT from the Metaverse project, you can start by answering the following questions.

Who is the creator?

Consider the project development team’s experience and track record with Web3.

What are the technical characteristics of NFT?

Is the digital land issued on Ethereum, Polygon or which other chain?

How is the supply dynamics of NFTs designed?

Researching whether a project has a fixed total supply or can provide an unlimited supply of land is key. Also, at what rate was the land released? Is there a public timeline, or is the release process ad hoc?

Is this virtual world easy to build?

When it comes to creating land to “build”, projects with low operational barriers are more attractive. There’s no point in buying land if you can’t do other things on it to accumulate value.

Is the virtual world accessible?

Is this virtual world open and free to use, or is it a closed digital garden? Can people create and enjoy social spaces in virtual worlds without owning land? Of course, for users, the more convenient the better.

What is the location in the world?

location, location, location. For example, consider the Origin City division of the Ethereum-based virtual world Voxels, the oldest and most desirable land in the project. Research the context of locations within the world to better understand them and their desirability.

How many active users are there?

Did the NFT come from a project that is now a virtual ghost town, or does it have a large number of hardcore users?

What does the market for the project look like?

Review elements such as floor price, trading volume, market capitalization, number of holders, etc.

tool

Utility NFTs refer to NFTs that are useful for specific purposes in addition to being art, collectibles, virtual title deeds, etc. In this category, there are two types of popular NFTs, namely domain NFTs and membership NFTs. Some questions to explore when analyzing such utility NFTs include: .

Who is the creator?

If you have enough experience with the rules of the field, that’s great.

What about the accompanying use value?

You can use an ENS name to manage wallets and decentralized websites, or membership-based NFTs can provide eligibility to participate in future NFT offerings. Researching what NFTs actually do and how they work is key to understanding their value.

How long does the utility performance last?

A utility NFT may offer benefits indefinitely to those who hold it, or like an ENS name, must be periodically renewed and re-registered when it expires. Understanding the maintenance and upkeep costs of a utility NFT is also key to judging its value.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bankless-how-to-analyze-the-fundamentals-of-various-nfts/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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