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How to Choose your first NFT?

Read this article in 28 Minutes

If you are a beginner and want to know what NFT is and how to invest, you can find the answer after reading this article

原文标题：《如何挑选你人生的第一个 NFT——我奶奶也能看懂的选购指南》

原文作者： Dinzz，H.Forest Ventures

In the biggest deal in gaming history, Microsoft has acquired activision Blizzard, a developer and publisher of interactive entertainment content, for $95 per share ($68.7 billion). If you don't understand this and you don't know why Microsoft is spending $60 billion to buy a gaming company, great, congratulations, your life is good, you haven't been captured by Ubisoft, SONY, Tencent as a gaming nerd.

Also on March 14 of this year, something happened that was as shocking to NFT players as Microsoft's acquisition of Blizzard: Yuga Labs, the parent company of Bored Ape Yacht Club, acquired the CryptoPunks and Meebits series NFT created by Larva Labs, Yuga Labs also purchased 400 CryptoPunks and 1,700 Meebits from Larva Labs, but the intellectual property and asset purchases involved undisclosed amounts.

If you don't understand this passage, it's not good.

01 What is NFT?

NFT，即非同质化 Token ，其概念可对比 BTC、ETH 这些同质化 Token 以进行区分。同质化 Token 是每个都一样，我的一个 BTC 和你的一个 BTC 都是相同的价值，也不能区分。而每一个 NFT 的价值却都是不相同的，其价值是通过它们的外在样式或者是哈希值来体现。

The NFT can take the form of a picture, a piece of music, a video, a game character, a game item, and so on. The minimum unit is 1.

NFT exists in the chain, it is in your wallet, even if the project side does not provide a trading market, you can trade and transfer through the wallet or NFT exchange.

If you don't understand, how about an example?

Let's take a look at some of the most popular NFT blue chips:

Cryptopunks

These pixelated little people, called Punks, are probably the ones you see used as avatars on social media. Punks are 10,000 NFT generated by algorithm and built on ETH in 2017. Punks are the first "pioneer" of NFT without enabling, which is a symbol of the identity of NFT and known as BTC of NFT. April 12, 2022 Floor 65ETH, about 190,000 US dollars.

* Floor price: the lowest listing price in an NFT collection.

#cryptopunks 5822

The pixelated figure, clad in a blue turban, was sold for 800ETH, or $23.7 million.

Bored Ape Yacht Club

This is probably one of the best NFT projects ever. The blue monkey in the NBA's star pool is from the UPstart NFT Yacht Club, Bored Ape Yacht Club, also known as the ETH of NFT. April 12, 2022, floor price of 113, already more than Cryptopunks. BAYC's sudden rise is not without the excellent operation of its project partner Yuga:

- Yuga takes it as the membership certificate of the club;

- Airdrop Mutant Ape Yacht Club NFT (2022.4.12, 26ETH);

- The project promises to enter the metasemes with 3D apes with the same elements.

SandBox

The above two items may make you feel like "NFT is a picture of avatar", but in addition to that, you must have heard the news of "XXX layout meta-universe, bought a piece of land in XXX and spent xxxETH". Take this game for example:

The map above, from the SandBox game, has 166,464 coordinates and "plots" of various sizes that you can use to do anything you want: build an amusement park, open a casino, create a private park, or waste it. Yeah, in the middle is Adidas. They bought it, too.

What other types of NFT are there?

There are many types of NFT, and an NFT does not have to be just one type. Just like a person's profession, he or she can be a programmer, a writer, and a photographer, an NFT can be of many types.

PFP

I have a Profile Picture. Punks and BAYC both fall into this category and can be used as avatars on social platforms. This is also the place where people ridicule the most. For example, we often hear people ridicule: "XXX spent XX million dollars to buy a head picture". In fact, people want to use a collection of NFT to find people with the same consensus, especially if the NFT is expensive, its function can be equivalent to a luxury item. By the way, there's an established rule that you can only use your own NFT as your avatar.

Metaverse

The SandBox is one of these. It's not just a picture, it's the building blocks of the metasverse. SandBox builds the bottom layer of the framework, and the upper application layer is all built by the users who buy the land.

Art

Art Blocks is a platform for randomly generating artwork that has multiple collections of programming code generated from random numbers. Each collection is a topic, and the number of NFT for each topic is determined in advance.

Opensea Art Blocks collection

One of the collections

Game

Godz is a P2E (Play-to-earn) game in which every character is an NFT.

Collectibles

Like real-life collectibles, artists store their work permanently on the blockchain. Beeple painted one image a day, and 5,000 DAYS of work made up EVERYDAYS: THE FIRST 5,000 DAYS, which was successfully auctioned at Christie's in March 2021 for $69,346,250.

Beeple EVERYDAYS: THE FIRST 5000 DAYS

Music

In real life, the copyright problem of music always troubles every music creator. Making music into NFT and publishing it on the chain provides a new idea to solve the copyright problem.

Singer Chen Huanren releases music NFT "The XXXX is an NFT"

How do you judge the value of NFT?

team

As with any Crypto project, the team is crucial. Whether the team is real name, which country is the team, who is the NFT designer, whether the team has the operation experience of high-quality projects, whether the team is working hard, whether the network resources are broad, etc.

Project information

White paper: the integrity of the official website and white paper, whether there is any trace of plagiarism. Total number of project NFT, number of whitelist & AMP; How to get, Mint price, Mint time.

Roadmap: Check whether the project party has a roadmap, whether there is any new idea of the roadmap, whether there is the possibility of implementation, and observe the ability of implementing the roadmap.

Community heat/consensus

There is a characteristic of NFT mentioned here. The individual value of NFT is greatly different with poor mobility. The value is determined by the heat and consensus of the community, and the floor price is the embodiment of NFT value. But once the heat died down and the consensus collapsed, the NFT could not be sold without anyone to buy it, and suddenly went to zero, worthless. So looking at community buzz and consensus is a very important part of evaluating the value of NFT. Right now, I'm looking at Twitter and Discord buzz.

Twitter: number of fans, account creation time, number of tweets, number of recomments and likes, and quality, how many NFT circle members are in the follow list, and how many NFT KOL members follow the project.

Discord: Total numbers & Online number, operation ability (whether the team is familiar with web3 operation & AMP; Gameplay), etc.

IP

IP is an important part of building community consensus.

Ali and Leng Rabbit are popular cartoon characters in Web2.

Adidas: a household name brand.

Mfers: Meme community culture.

aesthetic

Different from hardcore technical projects such as public chain and prophecy machine, NFT is mostly expressed in the form of pictures. Meanwhile, NFT is also entrusted with the emotional fetters of investors, so aesthetic appreciation is also an important part of NFT.

Trend painting style: BAYC has to say that it is very in line with the European and American understanding of trend.

Cute: In a NFT market full of cool monkeys, dogs and cats, the cute, simple, humanoid Doodle stands out.

"Cool" style: Clone's "cool" style, co-branded by Takashi Murakami and Nike...

And so on...

celebrity

From Curry's endorsement to Murakami's own launch of NFT, celebrity also matters.

PhantaBear (known as jaron Bear)

The Heart Project

Fu can

Dao/ Club tickets: TICKETS to THE Dao of NFT KOL LaserCat397, which gives you access to LaserCat397's community and access to quality NFT information. The floor price also reached 3.32ETH on April 12, 2022.

NFT in exchange for something

OK Chain's OrgNFT was able to use the project's footwear NFT to customize physical shoes, but the half-month life cycle didn't make it to that day...

Subject matter

There are also hot spots in NFT. For example, in January 2022, female-themed NFT is quite hot, and there are also multiple imitation disks. In March, The Chinese-style NFT was also released quietly.

women

NFT World of Women

China's wind

CHinaChic NFT

Copy disk

NFT disks also exist and have value. You can see a lot of Punks and Apes in Opensea, using the same or similar elements, or mirroring them directly, or creating a new project with elements from two or more projects. Copy disk also look at the quality, but generally speaking a new blue chip before a few copy disk has a better market consensus, but the heat to maintain the time is not long, generally will need to fast in fast out.

Punks copy plate

BAYC copy plate

Punks+BAYC fusion disk copy

Production costs

The production cost of NFT reflects the investment and seriousness of the team to a certain extent. Of course, the more sophisticated the production is, the more favored by investors, and there is often a better consensus.

Why are NFT values different in the same collection?

NFT introduces the dimension of "rarity", people are always seeking individuality, seeking uniqueness that sets them apart from others. For example, of the 10,000 apes in Bayc, 120 (1.2%) blew balloons, and only 2 (0.02%) crown elements. Scarcity is more valuable, and generally speaking, the lower the number, the higher the value. Of course, there will be aesthetic deviation, like it is worth paying more premium.

BAYC

The NFT of the entire collection is usually sorted by rarity, and the NFT ranking of items can be found on the following website.

https://nftnerds.ai/

https://app.traitsniper.com/

ALINFT #8880

How to find an NFT to invest in?

The investment methods of NFT and other projects are quite different. Without institutional investment and financing, the market value calculation method of floor price * quantity is not too reliable. The participants of NFT are basically divided into project side, large investors and retail investors, so the way of investment is also somewhat different from conventional projects.

I've already talked about how to determine the value of NFT, so I'm just going to share how to "discover" projects. Speaking of discovery projects, let's first look at how NFT is published.

How NFT is issued

Direct purchase of NFT from NFT's issuance channel is usually equivalent to a traditional Crypto project's primary investment, and NFT's issuance methods mainly include:

White list: At the present stage, most NFT projects are sold in two rounds, with mint being whitelisted in the first round. The whitelist can be obtained in the following ways:

Twitter lottery: it is drawn by the project side or the cooperative KOL, and generally requires relikes and comments and @friends.

Completion of community tasks: High-quality projects usually involve more investors. In order to build community consensus and improve the threshold of whitelist, the project side usually requires investors to complete corresponding tasks to obtain the whitelist. For example, invite friends into Discord, or require a certain level of Discord, or simply have investors draw IP fanworks for projects.

Holding other item NFT: This is a way for NFT to interconnect and empower each other.

The Dutch take: Blue chip project Azuki used the Dutch auction method to sell, first at a higher price to the public, the price gradually decreased over time until all sold out. However, Azuki was completely sold out at the initial price of 1 and the floor price reached 22.9ETH on April 12, 2022.

Free+gas: There are also many cold-start projects that are sold for free and the investor only needs to pay the gas fee to receive the NFT. (For some programs, the first portion is free)

Methods for discovering NFT

Data collation website

View the NFT as it is released through the calendar feature of the data collation site.

https://upcomingnft.net/

https://nftscoring.com/upcoming

https://tasteful-resolution-466.notion.site/NFT-Launch-View-40cedcc2d6c848d195c80df9add08ad4

Through Twitter messages

It will be extracted by the project party or the cooperative KOL. Generally, it is required to recomment and @ friends. Follow NFT KOL, friend each other as fans, and search Tag#whitelist to find new items.

Through gas anomaly

‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ ‍ & have spent 1. Use the browser plug-in to discover the gas exception.

2. Access the tool website

https://compass.art/collections/minting Query projects in Mint. (More gas is burned in the project, indicating high heat)

3. Use the details page to find the official website of the project to mint.

Smart address collection methods

Check the purchase address of hot projects before the outbreak, check the past win rate, remove the false and retain the true, and check their Minted projects daily.

Gas anomaly and smart address are most suitable for the first two imitation disks of the new blue chip. Although there is not too much time to analyze, the new blue chip often has hot spot effect, and the first two imitation disks have serious FOMO.

Establish investment project library

Most of the projects can not be obtained through the first-level way, can establish investment project database, track the progress of quasi-blue chip projects, and then invest.

1. Follow the NFT Burn charts (link); NFT Trading volume Growth ranking & NBSP; (link); Mint quantity & NBSP; (link); Twitter, community appear frequency of this project. The above data will be collected for further analysis of projects with certain popularity.

2. Score projects by NFT value judgment model.

3. Follow the project's Twitter feed to track progress (especially familiarize yourself with the project roadmap).

4. Invest in something good.