The world of NFT is exciting and full of great artworks, but it is not without its challenges; there are many more things to consider when starting out. The first steps in the NFT community can be overwhelming (there are so many upcoming projects and events happening every day!), but after you learn a few things, it becomes much easier and in no time you will be able to quickly evaluate if a project is worth your time and money.
Let’s see what are the most important things to look out for when choosing what project to invest in!
The majority of project community communication takes place on Discord or Twitter. There are a few factors that could be a red flag, such as posting intervals, overpromising, avoiding questions, and so on. You can usually see more details on Discord than you can on Twitter, as each project has a number of channels dedicated to different aspects of the project. Typically, all projects on Discord have a few of the same channels, such as announcements, roadmap, and general chat.
Let’s take a closer look at two of the main channels: Announcements and Roadmap.
While skimming through the channel, keep an eye on the posting interval; if it’s too seldom, it could be a warning sign. If there are regular minor updates, this could suggest that the project is actively being worked on and that the team behind it is dedicated to its development, as well as is interested to show their progress to the community.
A road map is an important part of every NFT project as it outlines the project’s long-term goals and the value it will provide to its community. Milestones, marketing initiatives, and overall short and long-term goals are usually included in a roadmap. When evaluating a roadmap, look at how it’s worded to determine if it’s specific about how to reach all of the goals or if it’s vague and doesn’t appear to indicate specific plans.
The most essential thing to note about a roadmap is how realistic it is. It’s great to be ambitious, but if the project promises you an unbelievable return on investment or if a team of two promises to build a fully functional 3D world in a short amount of time, it could be a potential scam. Of course, it depends on the team size and other factors, but these are some fundamental points to keep in mind.
Lastly, while there are some general suggestions, always try to put your critical thinking skills and gut feeling at work. How transparent are the project owners? Do they respond to questions from the community? If Discord has 25k members but there are only 100 messages in the general chat, it could also be a warning sign.
Apart from evaluating what social presence the project has, don’t forget to also look at the team behind the project as well as check if the collection is verified before you buy.
As the community grows it is not only all about talented creators and their hard-worked projects but there’s also a lot of money involved and people trying to profit, so scams appear more and more.
Even though it is quite common in the crypto space to be not doxxed, it is important for projects that are just getting started to show the actual people working behind the scenes. The story is different if at least one person in the team is a well-known community member and their presence brings trustworthiness. However, if no one on the team shares their identity and hasn’t previously engaged in the NFT community, it’s more difficult to earn trust and make people consider investing.
Doxxing is the act of revealing identifying information about someone online, such as their real name.
When looking out for verified projects, it also prevents you from accidentally buying an NFT that looks very similar to some well-known collection, but is actually a fake. Two assets, one from a true collection and the other a fake, can sometimes appear to be identical, so you should always double-check the collection’s Policy ID before buying it.
Policy ID is a unique identifier for each collection.
Similar art can be a red flag, although many collections are derivatives of others with a different spin, so it depends on the project-by-project basis. However, if the art is indistinguishable and the owner does not mention being inspired by the original collection, it raises some concerns.
Overall, the NFT community is full of amazing people and creators, there are a lot of things to learn and see. However, it is worth spending some time researching a project before investing in it, in order to prevent a disappointing outcome as much as possible. It doesn’t take long to get acquainted with it and become more aware of what to avoid and what to look for. We hope this article was helpful to get you started on your exploration adventure.
Best of luck!