The Ultimate NFT Toolkit
|— NFTs are exciting new assets at the heart of Web 3.0. We all want a piece of the action and to understand what’s going on in the space – but the ecosystem can be hard to interpret for newcomers.
— Where do I find a new project? How do I track project value? What can I use my token for? What are the big events driving the space?
— NFT projects may seem new and full of buzz, but just like in real life, reading up on a project’s fundamentals and keeping track of relevant news events is absolutely essential if you’re thinking of getting involved.
— There are multiple tools in the space that aim to give you insight into all aspects of an NFT project, from its community and utility to its value and upcoming drops
— There is no substitute for good research – and here we show you where to do it. Ready? LFG!
We get it – NFTs are the assets everyone wants to play with, but understanding the bigger picture is hard. So here’s how to research NFTs!
NFTs are transforming our ideas of ownership, self-expression and community. From tokenized art to PFP’s, gaming assets, and collectibles, the opportunity to curate an online identity via non-fungible tokens has seduced a generation of digital citizens and caused an explosion of activity in the space. Curious? You should be!
With so much buzz around this exciting new space (and the wider story of Web 3.0), many newcomers are also simply searching for an NFT project to join, in order to get their first taste of digital ownership and start interacting with the space. Hey – that’s normal! We all started in the same place.
New Space, New Rules
But buying an NFT is not as simple as buying a new pair of the latest sneakers: FOMO is real in the charged up world of NFTs, not to mention this unfamiliar space can be hard to navigate. New space, new norms, new types of community, new relevant events and key markers. And all of these things mean that taking your first steps into NFT land can feel like trial and error.
We have news for you – it shouldn’t! And it doesn’t have to.
With a well-thought-out approach and the patience to learn, the sky’s the limit even for a new user. So to make your life a little bit easier, this article will provide a step-by-step approach for buying NFTs and the sources you can use to execute each one – from finding new projects to analyzing their potential, exploring their community, and valuing their assets.
Your NFT Toolkit
Step 1 – Get an Overview and Identify Drops
It’s time! You’ve been thinking about it for months and finally, you’re charged and ready to buy your first NFT! But suddenly, you find yourself scratching your head, thinking “Wait a second…where do I start?” – don’t worry, we have just the thing for you.
With NFTs, context is everything, but it can be hard to locate an overview of everything that’s going on. Luckily for you, an introduction to the Web 3.0 ecosystem is at your fingertips with news sources such as NFT Evening providing credible information free of cost. NFT news platforms like NFT Evening are valuable because they provide an overview of the industry and key events, as well as a starting point for finding projects that you may be interested in.
Additionally, they also provide a calendar for upcoming NFT drops and conferences, useful for timing your purchase if you’re looking to mint directly from a project, and to find opportunities to rub shoulders with the main voices in the industry. Even if you’re looking to buy your NFT on a secondary marketplace instead of minting directly, understanding the key news events in the industry will stand you on good ground for understanding the bigger picture and making informed decisions.
For a simple and digestible look at the space and upcoming collections, as well as key information about the industry as a whole, an NFT news platform is your go to.
Step 2 – Get Up Close With Your Project
OK so you’ve identified a few projects that seem interesting, and you’d like to know more about them. Your next step should be some deeper research.
The project white paper should be your first point of call – here, you’ll find clear information about the overall mission of the project, its key utilities (a very important point beyond the aesthetic of the NFTs), planned token supply and use cases. This is the “story” and intention of the project.
Once you know this, it’s time to check out how well it’s actually performing. Check out data-tracking sites like Icy Tools, which provide real time information on how well a project is doing by tracking key metrics like floor price, collection value over time and trading volumes. This provides objective data and some visibility into the overall financial health of a project.
Let’s say you wanted the DL on something that caught your eye: a quick inspection of its Icy Tools page will show some project fundamentals and give helpful insights as you size up the opportunity.
If you’re still interested in your project at the end of this fact-finding process, great! But your research journey isn’t done yet.
Step 3 – Check Out the Neighbourhood and Get Key Alpha
Community is EVERYTHING in NFT land. Now you have a basic picture of your project’s health, it’s time for you to visit the project Discord server and get a feel for its community.
Discord is basically a sophisticated chat room that is used by web3 citizens as a social hub for projects whose communities will likely never meet. For that exact reason, it’s essential that you build a picture of who you’re interacting with by observing a few key points.
Discord servers are started by the developers of a project, and this is your place to get a feel for them. It’s a good idea to direct some questions at the devs – this will give you an idea of how active they are and whether they have a clear mission and purpose.
Chatting to the community itself is also valuable: you can get alpha on upcoming drops and developments and build lasting friendships with like minded NFT enthusiasts (just turn off your direct messages). As a general rule, a project is a bright red flag if it does not have a discord server with an active community dedicated to upholding its core values. Luckily, you discover that your project of interests’ discord is a pleasure to visit, with members supporting each other, refraining from FUD (fear, uncertainty, doubt), and staying true to their whitepaper mission. Now that you get a sense that the discord culture is highly positive, active and healthy, it is a good sign that the project is headed in the right direction.
There’s another important piece of information on Discord too. You may discover you can earn a spot on the project allow list spot for future drops – in other words, a guaranteed right to mint when new tokens are issued, in exchange for completing a task that benefits the project. These types of incentives are a powerful way to keep the community engaged and focused on generating long term value for a project. And for you, they are way of buying into a new project without ending up in an expensive gas war.
Step 4 – Check the Contract and Token Distribution
OK, so you’re satisfied with your research and you think you’re ready to purchase a shiny new NFT. To be absolutely sure, let’s conduct one last analysis of the project fundamentals on Etherscan just to be safe.
Etherscan is a platform that allows you to view key details about the underlying smart contract for a token collection. This includes things such as buying and selling activity of the collection, the contract creation date, creators’ wallet address, total token supply and the supply distribution, as well as key information about how the smart contract functions. In particular, it still makes sense to glance at one key indicator.
Take a look at the “holders” tab, which shows the list of wallets that own a stake in the collection, as well as the percentage of the total token supply they own. Why is this important? If the top holders of the project own a large percentage of the overall token supply, this may suggest less stability over the value of your own tokens – if one wallet owns a significant chunk of the supply, that wallet selling their holdings will impact the value collection as a whole. This is something to take into consideration as you decide whether to buy in.
Step 5 – Tracking Your NFT Portfolio
Let’s pretend that after the purchase of your NFT, you go on a shopping spree and buy into a few more projects. Now that the dust has settled, you may be wondering how much your assets are worth. To figure this out, simply entering your wallet address into The Value App will show you the approximate value of your current holdings.
Step 6 – SECURE. YOUR. TOKENS.
You didn’t think we’d forget, did you?? If you’re new here, we have an important message – if you’re not new, you know the drill.
The safest way to secure the private keys for your crypto assets is offline. Always. Blockchain flipped the script on how we manage our most precious items. On one hand, it provides a means of owning value digitally and independently of a middleman. But it also means that securing those valuable digital assets is completely down to you, and will define your experience in this space.
The main threats to your crypto exist online, which means your crypto wallet needs to be able to protect you from those. You’ll remember from our previous article that, despite their convenience, hot wallets simply can’t do that – existing on a connected device means they’ll always be vulnerable to hacks and malware, meaning your keys (and crypto) are not completely safe.
By securing your NFTs in an offline hardware wallet, you can switch off and keep researching, in the knowledge that your precious crypto assets are safe. Here’s how that works and why it’s so important. The moment you own an NFT, security becomes your #1 concern, and Ledger Academy is here to help you understand the finer points and stay safe!
Your NFTs, Your Story
No matter who you are, the way you approach NFTs will define your experience. The tools offered in this article are excellent resources – but of course, the more research you do, the better.
The NFT space is not just about creativity but also utility and stability, so it is of the utmost importance that you DYOR! There is no substitute for putting in time and energy to research. Hopefully, this guide provides a starting point into your exploration of the web3 universe and the gems it has to offer. Stay vigilant, stay positive and good luck!
Knowledge is power.
Just breaking into NFTs? Or maybe you’re an artist just realising how they could revolutionize your business? Either way, making one of your own is invaluable – here’s how it’s done! Thanks School of Block!