Artists, curators, media …… every investor with a keen sense of smell, are hoping to seek some opportunities in the NFT boom. So, what are the investment opportunities in NFT out of the circle?
Recently, Sophia, a researcher of NFT Labs, made a guest appearance in the live room of “Air Classroom” of Hunting Cloud Finance, and brought a vivid and informative sharing for the fans of Hunting Cloud Finance.
The token “NFT” and NFT are not the same thing
Host: What is non-homogenized token (NFT)?
Sophia: The full name of NFT is Non Fungible Token, which is different from the homogeneous form of Bitcoin, NFT is a unique and easily verifiable digital asset that can represent assets such as GIFs, pictures, videos, music albums, etc.
In fact, you may have known about NFT for a long time, such as the game that was a big hit in 2017, crypto cats, which was so hot that it crippled the ethereum network, and an NFT cat was sold for as much as 600 ETH. as well as the recent hot NBA Top Shot are good cases.
In fact, the token “NFT” is not the same thing as NFT, non-homogeneous tokens are in various forms, which can be music, art collectibles, game props.
Moderator: What are the ways to participate in investing in the NFT track?
Sophia: The easiest way to get involved in investing in NFT is to buy potential NFT tokens on the major exchanges. For example, ENJIN, MANA, SAND and other head NFT tokens. As for which are the NFT project tokens, many exchanges have NFT boards, such as Coinan, Firecoin, Coinmarketcap and other platforms, so investors can learn about them on their own. (Cloudhunting Finance warmly reminds: tokens have risks, investment needs to be cautious. In addition, readers are requested to strictly comply with local laws and regulations and not to participate in illegal investments.)
The second way is to buy and sell NFT assets. nft collectibles are good for speculation and collection, for example, the cost of only $230 ball player cards will be sold at a price of about $100,000 in some cases. Like the recently hot Bored Ape Yacht Club, the issue price of each monkey is 0.08 ETH, as seen on CryptoSlam, the lowest price is currently 3 ETH.
NFT collectibles can be purchased on NFT trading platforms, such as Opensea, Rarible, and the Coin NFT trading platform. There are also NFT platforms dedicated to crypto art, such as SuperRare and Nifty Gateway.
The third one, for those who want to become crypto artists, can issue their own NFTs and sell them on the aforementioned trading platforms.
The fourth kind, participate in NFT liquidity mining. For example, MEME, is depositing ETH/MEME LP tokens on Uniswap to mine NFT. or deposit MEME in the Genesis pool to earn pineapple points for tokens.
The fifth one, participate in NFT fragmentation trading platform like Unicly. Deposit NFT you own, such as cryptopunks or Hashmasks, and put them in the vault to mint uToken. this play offers great liquidity to NFT holders. It is also a good opportunity for other players who do not have the ability to pick NFT, because the whole process does not require holding any NFT, by holding uToken issued by others waiting for appreciation, and then sell it on AMM.
NFT is more dependent on market activity than DeFi
Moderator: How should I evaluate NFT projects when I want to buy project tokens or invest in NFT assets? Are there any reference criteria? Please share them with our friends at Cloudhunting Finance!
Sophia: (1) The quality of the project and the reliability of the project owner. Because the threshold of NFT issuance is extremely low, and it is easy to be imitated and copied, the concern for the influence of the issuance team affects the judgment of the potential for subsequent transactions.
(2) The activity of the community. NFT is more dependent on market activity than DeFi, and the fans behind its creators are especially important when buying collections. The more popular the creator, the higher the value of the NFT he or she creates.
The amount of followers on social networks such as Twitter are one of the very important data to evaluate the project. When participating in NFT projects, you can go to official media channels such as medium and twitter to learn about the latest project news, or join official chat channels such as discord and telegram to learn about project activities and community activity.
(3) Transaction records of the market. These historical transaction data can be found on the Nonfungible website, after all, these data are publicly visible. It is worth noting that NFT projects are not evaluated based on assets for sale on the platform, as the scarcity and uniqueness of NFT dictates that the marketplace is constantly changing the criteria for evaluating each asset.
(4) Unlike homogenized tokens, NFT also has aesthetic judging requirements, and there are many crude NFT artworks online that you need to screen yourself.
(5) The scarcity of NFT itself. For example, the total number of CryptoPunk is fixed at 10,000. Unlike CryptoKitties can be generated in unlimited quantities. As the NFT industry continues to grow in size, the scarcity of CryptoPunk itself will make them more valuable. Sales around CryptoPunk have reached tens of millions of dollars in the last quarter of 2020 and the first two months of 2021.
Transactions, gaming, and infrastructure are on the radar of big organizations
Moderator: I heard Sophia was taking stock of the portfolio of crypto VCs and exchanges on the NFT track, can you tell us what you came up with?
Sophia: Yes, we have analyzed more than 10 investment institutions and exchange investment funds based on public information, and according to their investment portfolios, we can see that most of them focus on three main directions:
First is the trading platform. OpenSea is currently at the head of the NFT trading platform, providing the trading model commonly offered by the NFT secondary market, including issuance, trading and auction. But the play is not rich enough, such as auxiliary financial play, NFT lending, fragmentation, etc. So that other projects still have the opportunity to fight for the head.
And the trading platform can be subdivided into art trading, music trading platform, tide and luxury goods, etc. In these segments, institutions also have their own layout.
The second direction is games. The first is the game studios, including Dapper Labs invested by a16z, which develops crypto cats, NBA TOP Shot, Flow public chain. animoca Brands game studio invested by Multicoin is also a big player in the chain game circle, whose products include virtual world Sandbox, racing game F1 Delta time.
These game companies have more mature experience in game development and operation, and have multiple blockchain game projects under them. The projects can cooperate with each other, and can convert the original fans into users of new projects. And they already have rich experience in the operation of games and marketing of chain games, which has certain advantages.
In addition, DCG, the parent company of Grayscale, and Alameda Research have laid out the RPG game Big Time Studios. NGC has invested in Legend of Crypto card game and My neighbor Alice virtual world game. There is also Coin’s early investment in Seascape, a game that combines NFT with DeFi gameplay.
Finally, their main focus is on NFT’s infrastructure (mainly NFT’s public and side chains). Due to the low throughput of Ether, high Gas cost and network congestion, the infrastructure problem cannot be circumvented. There are only three solutions: migrate to other public chains (e.g. BSC, Near), make your own public chain focusing on NFT (Flow developed by Dapper Labs, Efinity, a public chain on Polka developed by Enjin), and choose Layer2 solutions (Polygon, Roinin).
NFT is the second largest application scenario of blockchain outside of finance
Moderator: The payment code NFT issued by Alipay has attracted a lot of attention, which is marked with ” The copyright of NFT is owned by the issuer or the original author, except for obtaining the written consent of the copyright owner, NFT cannot be used for any commercial purpose”. Can Sophia explain to the cloud hunting financial community partners to buy NFT, the buyer gets what? Is this regulation of Paypal still in line with the concept of NFT?
Sophia: That’s a great question! It’s a question of copyright and ownership distinction. These two are always easy to confuse. Copyright refers to the right to reproduce, secondary creation, etc. of a work. Ownership refers to the right to use the asset, to dispose of it.
What NFT buyers get is ownership, that is, the right to trade this NFT in the secondary market for buying, selling, leasing, etc. This regulation of Alipay does not contradict the concept of NFT. Whether in the NFT field or in the traditional art field, the copyright does not transfer at the time of sale, but rather the ownership of the asset is transferred.
Moderator: May I ask Sophia how she sees the future of NFT? And can you tell us where you are more optimistic about the development of NFT?
Sophia: Most of the assets in the real world are non-homogeneous assets, and if these assets are to be put on the chain, or find a corresponding digital form, then NFT will be the most suitable standard, so we strongly believe that this is the second biggest application scenario of blockchain outside of finance.
I very much agree with a statement I read earlier, “NFT needs a carrier and application scenario, not to keep printing new assets.” NFT can be applied to a wide range of scenarios to determine the development of NFT is not only here. In the future, it will be more widely used in game props, virtual world, fashion and entertainment, identity verification, insurance, electronic tickets or coupons, etc.
Personally, I am more optimistic about the development of metaverse. The idea of meta-universe is appealing, and like I said earlier about investing in NFT projects, the narrative of the project is important. In the metaverse, people can do many things that they can’t do in the real world, for example, they can participate in various activities, go wherever they want, and do whatever they want whenever they want. Users can hang out with friends remotely, create art, consume art, play games and indulge in shopping, while also visiting other areas with their virtual identities.
It’s still too early to tell, though, when these are realized. But with many companies laying out the metaverse chain, such as Tencent’s investment in sandbox game company Roblox and NVIDIA’s launch of Omniverse, the metaverse infrastructure will give a big boost to the development of metaverse.
NFT itself is a high-risk market
Moderator: Faced with a wide variety of NFT projects on the market, how should ordinary users identify reliable NFT projects? What are the risks involved in investing in NFT?
Sophia: If you really want to participate in a project, then you should go through a variety of channels to understand the project, such as the project’s official website, the official media channels telegram, Twitter, Discord, Medium, etc., the progress of the project, the financing situation, domestic and international media coverage.
The information collected from these official media channels can determine the background of the project and whether it is formal. For information obtained from third parties, it is crucial not to listen to it, but to carefully confirm the source of the information.
Regarding the search for project investors, you can confirm from Cypherhunter and Block123. In addition, there are numerous impostor ways, and there will be identical names of institutions to attract users to invest. For example, listed below is the announcement of Softbank. softbank sg, the advisor of Kishu Inu, is a cottage company and not literally Softbank Singapore.
NFT itself is a high-risk market, the risk of price fluctuations of NFT tokens and collectibles, especially the value of crypto collectibles, because most users are following the speculative IP. how to judge the fair value of that NFT, each person has their own measurement system in mind.
Finally, the risk and security of the NFT project. The project owner goes bankrupt or runs away in the middle of the project. As an example, for example, the creator of uToken in Unicly will withdraw liquidity, then people who buy this uToken will suffer from the risk. There is also a need to carefully confirm whether this NFT is minted by the original author in the purchase of NFT, which is the key. Because everyone can go and take a picture of someone else’s cryptopunks to mint a new NFT, that is, a fake.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/nft-breaks-the-circle-the-love-affair-between-opportunity-and-risk/
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