Three Ways to DYOR on a Good NFT Project: Watch out for Numbers 2 & 3
If you have been in the NFT space for at least 3 months, you would have either heard of or experienced a project that rugged, and the team left with the entire money, leaving the holders with a mere picture on the Blockchain with zero value.
Usually, when these kinds of criminal activities happen, these rugged-project founders tend to escape with Hundreds of thousands, Millions or Tens of Millions of Dollars.
If you have ever bought in on a project that got rugged once or twice or thrice, you’d agree that it’s always a sad experience and affects how you trust people.
For a beginner, or for someone who’s been in the space for a while, or an Active NFT trader — A Degen — or even a Whale, it is important you know how to avoid projects that tend to be a rug,
You must learn to see through their lies about building a massive community, a huge utility, the next Metaverse etc.
This knowledge will prevent you from losing money repeatedly on multiple occasions to people who have no plan to give you value for the money you paid
Understanding how to know a Good NFT project is a huge advantage for everyone who has succeeded in the NFT space, you can’t succeed without this knowledge, if that’s the case, how can you know a Good NFT project? Here are the three signals you pay attention to:
- Quality Metric
- Team Value
- Associated Communities
Each of these three Signals has multiple sub-points that explain why they are important and how you can leverage them to have a better understanding of how to know a Good NFT project before you become invested in them. Let’s take a Dive dive into them:
Quality Metric:
This is probably the most common information about a Good NFT project you have seen in different publications, each of them gives an external audit of the quality of the project and the effort the team has taken to build the project’s social assets. They include:
- The Projects Twitter Account
- The Projets Website
- The Road Map claims — Utility and Whitepaper
How can you judge a project based on these social Assets? What are the things to look out for when going through each of them? What kind of Mindset should you have when going through them? How do you Spot red flags? Well let’s take a look at each of them:
The Projects Twitter Account
Almost every NFT project has a Twitter account, Twitter is the hub for everything, they have a chance to engage with their audience and with the right marketing tactics, they can build huge anticipation towards their Collection drop and can be very successful doing it.
The only challenge here is that both the good projects and the bad projects that have intentions to rug their community all use Twitter, they all engage and collaborate with Influencers and projects.
They almost do the same things, so what do you look out for?
How they say what they say, You’d know a clickbait when you see one, if it is too good to be true then it is too good to be true — it is not true.
Look out for their Engagement, observe their engagement in comparison to their following, and ensure the comment section is filled with real people and not bots. In all honesty, this can be a huge work, to make things easier, you can use certain Social Tools like
With these tools and a keen eye for Click Bait statements — too good to be true statements — You can as well start to see some patterns here, and start observing these patterns keenly.
But Don’t stop there, You’re not done researching, next we look at the project’s Website.
The Projects Website
Have you ever been on shitty Websites before? Or does it have an error with the Domain name? Well if that’s the case for any NFT project you ever get on, then you are pretty sure they have not taken the time and effort to invest in a good website.
I doubt you’d find projects with such a website — if you do, complete your research at this point and walk away — typically you find issues like slow website loading, slow Image loading, no Meta Tags, Poor Images on the website, difficult to read text etc
All of these show the attitude behind the team, if they can’t make the effort to make a Website look very clean, with a great user experience, then you can as well guess how they will handle the project and the community.
You are not done with the research yet buddy,
You want to take a close look at what the Road Map claims are, what’s the project utility, and What benefit or problem does this utility offer or solves? Do they have a Whitepaper Explaining how they intend to fulfil the project?
The Road Map claims — Utility and Whitepaper
This is very important, and the only way you get to read through their road map, or the utility and their Whitepaper is when you get on their website and Discord.
Knowing and understanding the information from them (their road map, or the utility and their Whitepaper) is very important to know whether or not the project is just a cash grab or has a purpose.
A Utility is a solution/product that solves a problem or helps its users achieve something — typically a solution — allowing them access to a value that’s super important to them. This is exactly what every successful NFt project out there is built around.
The Holders of these good projects tend to get something really valuable to them in return and something usually worth way more than what they paid for. That’s what a good utility can bring to the members of a project
Although Value is relative, as it could have different perceived values to different sets of people, it doesn't take out the fact that it’s valuable to people.
A whitepaper on the other hand explains how the team intends to successfully build the utility, it covers cost, the technical aspects of things, and the odds of success based on different factors associated with the Utility.
If a project can’t take out time to explain how they intend to build the utility with the revenue generated from the community, then that’s a red flag.
Phew, we have gone through the Quality Metrics to pay attention to, but that’s not all, there are two more we have to address here
Team Value
Quality Metrics mentioned above are important and you should pay attention to them but you should pay more attention to the team Value and Ask these Questions:
Is the team Doxxed?
They must be doxxed, Twitter handles, Linkedin, previous experience or even a video of themselves. You should be able to trust people based on their proven experience and track record.
Founders should be proud to build openly, to be known, rather than hiding their identity at the back of an NFT pfp … smh
Who are the people in the Team?
It is important to know who these people are. Could you buy a stock or Bond or shares of a company that you do not know who the founders are and the history of the company?
So why would you invest 0.08eth or 1eth into an NFT project — which is also a startup— when you do now know who the founder is and the team is. That’s a risky investment and it could be a rug.
Where are their social media and what are their career footprints:
This is a no brainer, and it is the most obvious. Anyone can claim any name, so the best you can do is check them on their socials.
Twitter, Instagram & Facebook are some socials you should check out. You want to know these people are real, have a real living time frame, and other people know them.
Do the team members — based on their qualifications — have the experience to build the promised Utility
This is also very essential. If an NFT project promises a P2E game, well who’s the person on the team that has a successful experience building P2E games. If they promise a Deflationary token, well who’s the person on the team who has experience in tokenomics?
These questions open up the value of the team behind the project; being anonymous as a project Founder is a big red flag.
Here are other questions you want to pay attention to
- Which role do each of them play in the project
- How big is the team
- What previous projects have any of the team members worked on
- Who is the artist?
- What and where are his previous works,
- When did he start showcasing his work
I should say this here — It is safer to bet on a good team/people rather than a fancy Art, Utility or Road Map.
Lastly, Associated Communities:
Associated Communities
Collaboration and Partnership are two major NFT marketing strategies used by top communities to create Hype and increase reach.
When a really good and successful project collaborates with a project you have an interest in investing in, that’s a sign that all might be good, here’s why:
These successful projects only collaborate with new projects they know have a huge chance of succeeding, and this collaboration (typically a Whitelist Collaboration) gives their members a chance to get into the project early and easily, knowing the project will do well;
So basically, these successful projects have the best interest of their community at heart, they will not collaborate with any project when they think they won’t do well (based on their research.
You, on the other hand, having done all the other research, should observe the projects they are associated with.
This gives a good indication of whether or not they are worth investing your time, effort and Liquidity into.
If you have done all of this research, and you’re still not convinced about the project, then Trust. Your. Guts. And walk away. Simple.
Key Takeaways
- Pay Attention to the Quality Metric of every Project — Their Twitter account, Their Website and their road Map (Utility and Whitepaper)
- It is safer to bet on a good team/people rather than a fancy Art, Utility or Road Map
- Always observe the projects they are associated with — whether they are Top/successful projects or similar scale projects.
