Ten evaluation dimensions of NFT projects

content

1 The artistry of the project

2 community

3 team

4 Roadmap

5 Usage scenarios

6 Storytelling

7 Cost measurement

8 Rarity

9 Liquidity

10 Trend

“How to judge whether a certain NFT project can be flushed?”

This is a common problem in all major NFT communities.

Some people spend large sums of money on courses to find answers, but data and analytical models may give some direction. The speed of development of the NFT industry itself is the reason for the achievement of an NFT project at the moment. After six months, the original perception may undergo radical changes.

When answering the following questions, you can think about whether you can give two answers, “yes” or “probably”. If your answer to the question is “no”, please be vigilant. You may need to pay extra attention to this project to see if the answer changes from “No” to “Yes”, otherwise, you might as well look for a new project.

1. The artistry of the project

Let us answer the most subjective questions first. Successful projects usually have a compelling and distinctive artistry. Although each one has its own eyes, from the popularity of orangutans and pixel art in the past few months, as well as the Doodles that many people like recently, you may be able to gradually see some changes in the aesthetics of the projects.

Ask yourself, this art:

  • Is it eye-catching? You will be very willing to use it as your avatar every day, or put it in your wallet, and you will feel joy every time you open the wallet.
  • Is it different? Even when displayed in a small profile picture, it can be clear to others at a glance.
  • Is the contrast obvious? The design is clearly distinguishable in details. If the details are extremely similar, it is difficult to distinguish between the two.
  • Is it unique? Unique projects are composed entirely of different individuals. In the collection, each NFT looks different from the others. Generally, people prefer to have a unique NFT, which can attract different types of investors.
  • Is it generative? Generative art is also unique, but its uniqueness stems from the way it is generated. Generative art is composed of features combined with each other on the basis of basic element design. These features have varying degrees of rarity, and generally differ from each other in appearance. This ensures that you won’t see many seemingly identical NFTs. In the collection created in this way, each NFT has a certain degree of similarity and belongs to a common theme.
  • Is it eternal? This is closely related to the “trend” dimension mentioned later, because the current popular style will affect the popularity of the project (apes, pixels, etc.). However, this may also be a double-edged sword. Trends are often only temporary, so collections that have prevailed for a while are likely to become tomorrow’s yellow flowers in the future. Maybe pixel-style art will lose the market soon.

2. Community

This is one of the most critical factors that determine the success of the project. Community culture can influence the success or failure of a project, and such examples abound. Currently, most communities use Discord for daily communication, and sometimes rely on Twitter to communicate with each other. The project community is like an exclusive club, which makes you feel like you have participated in a fashion party or met a group of like-minded family members.

Ask yourself, this community:

  • Is it active? Can communicate and communicate regularly on mainstream platforms. Please keep in mind that newly established communities and small communities may not be very active at the beginning of their establishment or even during the entire operation period, while larger communities are much more active.
  • Is it true? In Discord, real and effective conversations are very rare. Some projects will hold event competitions, and project members will only send mass spam messages over and over again to improve their rankings and strive to be whitelisted. This will discourage some people.
  • Does it create a sense of atmosphere? The community atmosphere is very helpful. This atmosphere can be embodied in the tone and energy of the conversation. Whether it is cold and calm, or noisy, or brother, no matter what the atmosphere is, make sure this is something you are interested in and willing to participate in for a long time.
  • Is it organized? You want to see relevant channels, and you are also looking for whether there are staff or senior members willing to answer questions such as casting date and cost, and you can also observe whether the team has fulfilled its promises within a reasonable period of time.
  • Has the brand been established? You want to see that the brand of the project is closely intertwined with all parts of the project. You also hope that the project brand can even surpass the coin itself.
  • Does Twitter have more than 5,000 followers? Twitter provides a high-quality platform for NFT. The more fans you have, the more exposure you will get. The number of fans for new projects may be limited, but do they grow regularly?
  • Does Discord have more than 5000 members? Discord server is very helpful to promote project discussion and promote community members to have conversations on matters of interest. Smaller servers may appear to be quieter because members are scattered all over the world, making it difficult to maintain real-time conversations. You also expect it to provide you with the latest news and information. The number of Discord members in the new project may be low, but does it increase regularly?
  • Is it big enough? You want to join a large community in order to sell the collection. Ideally, the community that investors are looking for should be able to support each member to own about 2 NFTs. Therefore, for a collection with 10,000 NFTs, its Discord should have at least 5,000 members.
  • Do you answer questions from members? You can find answers to many topics and questions raised in this article from the community and team. If you don’t get any answers, try to dig into the reasons. Some projects hope to hide some details for the public in the future. However, if you not only get no answer, but there is even no sign that the team will answer the question, then this is probably a bad sign.

3. Team

This is another key to the success of the project. At present, about 30 projects are in the process of casting every day, and it is not uncommon for people to pull back and grab cash in the circle. Therefore, it is vital to have confidence in the team.

Ask yourself, this team:

  • Is it public? Can you find team members on Twitter, LinkedIn, project website or other social media? Knowing that the team is not just built by anonymous individuals is undoubtedly a reassurance, because it is often difficult for people willing to share their real lives to hide themselves once the situation takes a turn for the worse.
  • Is it active? If they participate in community affairs, answer questions, guide people to answer questions, or communicate with other community members, it shows that they are willing to be part of the matter, and it also shows that they attach great importance to their own community and are willing to invest time in it.
  • Do you have experience? In a brand new field, having experience will be a great help, because experienced people tend to be clear about their direction of action, or at least know what not to do. In addition, experienced engineers, artists, project managers, marketers, community managers and other important roles can also bring a lot of experience to the project itself. These experiences can deepen people’s trust in the project to a certain extent. The more experienced people in the team, the more likely the project is to succeed.

4. Roadmap

For project success, the importance of roadmaps is increasing day by day. A few months ago, the launch of the NFT project did not require a roadmap. The team only needs to throw a bunch of NFTs, and people will pick them up spontaneously. But the situation has changed. The team realizes that if they have a phased product (roadmap), they can promote the continuous appreciation of the NFT, allowing the holder to maintain the NFT for a long time. Investors have also changed, and they look forward to seeing a road map, no matter how simple it is. This roadmap can tell investors and holders the future direction of the project.

Ask yourself, this road map:

  • Is it true and credible? If the content sounds too good to be true, then it is probably just a beautiful sight. Usually, completing the roadmap requires a large team of developers, designers, project members, etc. If the team size is not so large, they are unlikely to reach the roadmap plan.
  • Is it general or tangible? A detailed roadmap is not only inspiring, but also informs those who care about the future of the project. The roadmap can also help the community understand the milestones they can expect.
  • Is there a time plan? You want to find business details or specific deadlines, such as Q1, early January, or November 27, etc. These dates or timelines provide more details for the roadmap, which can bring more confidence to members and reduce confusion and ambiguity.
  • Is it competitive? The details of the roadmap can help you compare it with other projects. The elements include project size, casting date, casting price, etc. By comparison, you can see the competitiveness of the project. If one of the factors is far beyond the standard level, try to find the reason. Perhaps the project’s community is very large. Due to fierce competition within the community, the casting price has risen.
  • Is it driven by value? Many roadmaps now talk about the value of their plans to give back to their holders, which will soon become the norm. On this point, the next keyword “use case” will be specifically expanded. Investors are looking for innovations to increase the value that can be obtained by buying NFTs. Many roadmaps outline the rewards that holders can get from the project in the future.

5. Use cases

Abundant use cases mean that in addition to hoarding NFTs, the team also provides some additional uses for NFTs. As the NFT field gradually matures, we will continue to see innovations in tapping the practicality of NFTs. Please note that over time, many successful projects will gradually improve or open up new use cases. When you first contact this project, you may not be able to understand this part of the information. If you have doubts about this, you can ask the community and the team.

Ask yourself, these use cases:

  • Is it easy to understand? You want to be able to easily understand the use cases of the project. If the use case is vague and obscure, perhaps the team wants it to be more mysterious. Does this fit their community atmosphere? If it does not, you may need to do further research on the project to get more details. No matter how clever the team is at hiding the details, if people are confused about the use case, they will not be encouraged.
  • Is it combined with games? If holders can use their own NFT to play games, this will increase the possibility of their holding, because this way can establish their sense of belonging to the NFT. Some games also support Play-to-Earn (P2E) mechanism, players can earn game currency in the game. Some games even innovate around renting NFTs and support other players to join them by acquiring part of the game tokens.
  • Does it bring access? Some use cases include access to exclusive projects such as large events or parties, or to give you access to exclusive communities, where you can get detailed information about other popular projects.
  • Does it bring greater value over time? Coin holders can sometimes get NFT airdrops in the future. They often only need to pay miners’ fees to forge new NFTs with high value. In terms of game use cases, these future airdrops can also bring unique advantages in the game.
  • Is there a DAO? DAO (Decentralized Autonomous Organization) is a decentralized autonomous organization, which symbolizes that holders enjoy the right of representation in DAO activities. It may be expressed as voting rights, earning project tokens, project-related revenue sharing, ownership of high-value NFT subdivisions, etc. It also includes the project’s feedback to DAO through other creative methods. Among them, part of the “reward” is legal, and it is best to do your homework yourself (DYOR).
  • Is it scarce? As projects become more and more popular, the value of virtual land will gradually increase, such as Decentraland and Sandbox. Axie Infinity and Nifty League will soon release similar land concepts in the game.
  • Is it a status symbol? Owning popular NFTs like Crypto Punk or Bored Ape Yacht Club (BYAC) sometimes feels like gaining a pronoun. In the field of NFT, this can be regarded as a Medal of Honor.
  • Do you have ownership? In the BYAC project, the holder can obtain the right to use the visual image. Therefore, they can use this image in advertisements or merchandise.

6. Story

Stories are a way to attract the community, and sometimes even establish a certain degree of relevance. It may be a story about the founding team and the origin of the project, or it may be a story about the meaning of NFT itself. Without an interesting story, people probably won’t stay in the project for a long time.

Ask yourself, this story:

  • Is it related to the team? Some projects revolve around teams. Maybe this team has some interesting backgrounds, such as an artist or a well-known NFT circle.
  • Is it related to the ‍ project? Maybe it’s an interesting story about the NFT project, such as the origin of the project, or telling that the project is rooted in a certain niche market.
  • Is it related to NFT? There may also be some interesting stories surrounding the NFT itself. This may originate from a graphic novel, epic drama, or a creative story about or around NFT.
  • Is it integrated into the brand? If this story is subtly integrated into the brand of the entire project, it will become more fascinating. You can infer from the marketing method of the project, as well as the marketing language and community dialogue.
  • Is it related to charity? Some projects hope to give back to charity in some way. If the charitable choice fits well with the project story, it will also help.

7. Cost and measurement

Generally speaking, despite the various purposes, making money is undoubtedly an important reason for most of us to join the NFT circle. There are many ways to measure the price of NFT projects. Take E as an example to talk about the cost issue. In the text, E can refer to any ecosystem you prefer.

Ask yourself what costs need to be considered :

  • Casting. Before the project is cast, understanding the casting price will help you understand the cost of buying one or more NFTs. You can also compare the casting cost of this project with other projects. If the cost is too high, can you earn more value or utility from it?
  • Single NFT. The price of most NFTs is lower than 1E, but some are higher or even far more than 1E. Can you pay enough E to buy NFT?
  • Current floor price. Flooring refers to the cheapest NFT on the secondary market. This can be said to be the lowest cost way for you to enter the Xinyi project. The low floor price does not necessarily mean that the project itself is bad. The project may fluctuate due to market changes, or because the paper hand cannot tolerate the deterioration of the market, the sale is settled early.
  • The changing trend of floor prices. This value is more important, and it will take some time to find a project that is really worth starting. If the price of the floor falls sharply and continues to be sluggish, this is likely to indicate that the project is unsuccessful or that market conditions are poor. When the floor price reaches its peak or shows a sharp increase trend, the buying risk is greater. Some people like to buy when there is a slight decline. You can also view the percentage change of daily transaction volume to better understand the progress of the project.
  • Ceiling price. The ceiling refers to the most expensive NFT in the project, which allows you to grasp the potential value of the entire project.
  • Total transaction volume. The total transaction volume of the project will be displayed on NFTGO.io. The transaction volume of new projects is generally low. If the transaction volume of a project is still very low a few months after its launch, it is likely that its growth momentum is weak or close to failure.
  • Number of holders. The ratio of holders to NFT can reflect the overall ownership of the project. Ideally, the ownership ratio of the project should be more than 50%, which is equivalent to 2 NFTs per person; the ownership ratio should not be less than 30% (3:1). As the proportion of ownership increases, the potential selling risk of large holders (giant whales) will decrease. Data such as the concentration of giant whales can also be found on the NFTGO.io data platform.
  • Daily trading volume . The more transactions in a day, the greater the liquidity and the more popular and successful the project.

8. Rarity 

Rarity is the core quality of NFTs, and some NFTs are created by famous artists. Of course, all NFTs are unique, and anyone can verify the authenticity of the NFT. The law of supply and demand and the law of scarcity determine that rare and high-demand NFTs usually attract more buyers and sell them at higher prices. Third-party platforms such as NFTGO.io can help users more objectively understand the true rarity of NFTs. These platforms will use on-chain data and other sources to estimate the rarity of NFTs, while taking into account the popularity, transaction volume, and all of NFTs. Factors such as the number of participants.

9. Liquidity

After experiencing png summer, many people are experiencing png winter. A pile of NFTs are accumulated on hand. Some people like it very much and want to hold it for a long time, but some people face the situation that NFTs cannot be sold.

  • NFT collectibles category. Like avatars and artworks, they are generally considered to be less mobile. If the owner of these items meets a suitable buyer, they can trade at market value. However, if you want to get cash as soon as possible, you may have to sell it at a discount, which obviously reduces the liquidity of such assets. However, when the demand for a certain item suddenly increases (for example, the market’s enthusiasm for a certain Collection is high), liquidity will be reassessed.
  • Relative liquidity. One is the past transaction data, but a well-rounded buyer will take into account many other factors, such as liquidity compared with other products of the same type, referred to as relative liquidity. The reason is simple. A higher number of transactions represents higher liquidity to some extent. This number is not from the perspective of currency, but from the perspective of productivity to prove the market size of the product. However, some markets with small trading volumes (such as collections launched by well-known artists) can also be considered as a very unique and attractive liquid market, so they need to be discussed separately.

10. Trends

Popular and successful projects tend to follow NFT market trends. If your project does not fit the current trend, is it because the project has just been launched, are you still working out the details? If the project has been going on for a period of time, but it still fails to follow the trend, it probably means that the project is losing momentum.

So, how would you define a good NFT project? Join the community and discuss with us!

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/ten-evaluation-dimensions-of-nft-projects/
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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