You've probably heard about NFTs and how much money people make from trading them if you've come this far. According to The Milk Road newsletter, two of the most popular collections, the Bored Ape Yacht Club (BAYC) and Crypto Punks, raked in $13 million more in combined sales than the worldwide movie industry at the box office in the same month last month.
NFT is non-fungible token, which means when you own an NFT that it’s a unique digital asset that belongs to you and you alone. NFTs can be stand-alone, or they can be part of a collection, allowing their owners to feel as though they are joining an exclusive online community.
If you're ready to start trading NFTs for profit, keep reading! We'll teach you fundamental things you need to know to get started.
Let's get started with the basic but the most challenging question: How do Find NFTs to invest in? Don’t worry. We feel it. Here are three key factors to look for when searching for a promising NFT project:
1. Community
In the NFT space, Twitter and discord are the two leading platforms to gauge a project’s popularity. Other sources such as Medium, Instagram, and Telegram should be counted, but it depends on the project’s target audience and scope.
So what to look into these platforms?
For Twitter: number of followers, engagement of followers on each tweet
On Discord, the percentage of attention and online presence should be at least 10 - 20% of the total members, in our opinion, because the number of discord members can be full of bots.
Look at how people engage with the announcements on discord channels. See if people are genuinely excited about the contest/events on discord. Look for the giveaway, and general chat channels, like those, are usually the most engaged. Are people fighting for a whitelist slot? People's attention to whitelists of a project is one of the key fundamental factors in defining if the project will pump or not.
2. Utility
The future of the NFT space is utility-based NFTs. Finding projects with utility is highly recommended by us because they have real-world and measurable worth.
Some projects, such as Axie Infinity, are P2E (pay-to-earn), featuring NFT as a game character in the projects' future games. Others operate as an exclusive key to a "VIP" club - exclusive with many privileges, known as alpha groups. Staking is a recent popular utility. Holding and staking an NFT earns you tokens and airdrops from the project's future roadmap, allowing you to achieve many times your initial investment.
Yes, specific projects have raised value for the holders despite having no utility, such as mfers. Nonetheless, such events are far less significant than the media portrays.
Take CyberKongz as an example. It earned notoriety for allowing owners of two Kongs to breed a BabyKong NFT.
3. Founding team
The founding team or creators play a vital role in a success of an NFT project. When you invest in a Non-fungible token, you invest in the people and the value behind the project, not just the project itself. Transparency is key to building trust between the founding team with their future investors. As an investor, start to look for as much related information as possible as your self if this type of project is something you would like to associate with, is this project suitable for a quick flip or long haul? Collate your appraisal with the project’s social appearance, not just the number of followers that back the project, but also the tone of voice and activities. Check if the founding team continues engagement with followers.
Depending on your style, the priority of each factor becomes less or more important. NFTs price depends not only on listed factors but also on others, such as art and association.
Some signs of a good project
Let's take a look at some essential elements and our recommendations that present signs of a good project:
10K+ Twitter followers and an excellent founding team (take @imaginary_one invisible friend or 3landers as examples)
10K Discord members and at least 1k active member
Multiple sales in the past days, zoom in to daily trading with floor price rising
Clear product roadmap
But keep in mind that trading NFTs means you'll be up against someone else. Competing implies you want to be on the upper ground as much as possible; keep in mind that information is essential in this area; you may obtain the data by joining alpha discords or first-mover expertise. There are additional methods to compete, such as being whitelisted or having early access to bullish products.
Most important, this is not the game for passive people. This is real work for real go-getters with a strategy that builds up with time and experience.
Learning from the success cases is a great way to start trading NFTs. Join TraitSniper discord to see more success profit sharing and learn from the professionals.
The buying methodology
In this post, we want to discuss two ways of trading NFTs once you define a promising NFT project:
Minting an NFT during pre-sale/ public sale
Buying an NFT on a secondary marketplace.
Minting NFTs
"Minting" means to buy the NFT upon its release before it hits the secondary market. It means being the first person to own a newly created NFT. How cool does it sound? However, it comes with risks, no matter how you might think it will be profitable.
When it comes to NFTs, minting may seem confusing for beginners and non-tech folks because it refers to a collection becoming part of the blockchain and a collector buying an item from that collection for the first time.
To fully understand minting, you should understand the two concepts below:
Private mint or whitelisting: Whitelisting allows NFT projects to reward early supporters with guaranteed slots to mint an NFT (or multiple NFTs depending on the whitelisting/project rules) within a few specified days several hours before the main public mint.
Public mint: often called public sale, is open for everyone to buy an NFT from a project. Public mint operates on a first-come-first-served basis. NFT traders will engage in “gas wars” if the project is hot to be the first person to get to the booking list. To explain further, a hot project will attract a lot of transactions, but only a few transactions are approved. People would pay more gas prices to be the first to get served. Moreover, that involves offering increasingly higher tips to miners hoping their transactions will be processed faster than other competing minters.
What is the main difference between public mint and private mint?
Gas prices make the most significant difference between public mint and private mint. With private mint, you only have to pay a transaction fee, while with public mint, you not only have to compete with other people. To make matters worse, you’ll still be required to pay gas fees even if your transaction fails, so you should proceed carefully. The blockchain doesn’t issue refunds.
Time manner: whitelisting allow you to purchase an NFT within a period. Meanwhile, you’ll have to mint with public mint as soon as possible. Of course, it is applied for hot projects.
Nevertheless, quality NFT projects are hard to mint because of high demand and limited supply. Most NFT projects release whitelists, so early supporters get guaranteed access to minting when the collection goes live.
To get whitelisted, join the project’s Discord group to learn its whitelist criteria and the date and time the NFT collection will go live (Links to Discord groups can usually be found on a project’s Twitter). There are many conditions for whitelists depending on each project, from reaching a predetermined level in the discord to inviting a certain number of people, which is called whitelist grinding and usually takes up a lot of time.
Is there any method for a free whitelist without grinding? Yes, if you’re lucky. Follow the project’s Twitter or some project listing platform such as @trait_sniper. You will find out that we have a lot of collaborations going on, which give the community many free whitelists, sometime NFTs, daily. This can save you a lot of time and money if you’re fortunate, so why not try?
Buying NFT on the secondary market
Say you’re late to the show and didn’t have a chance to mint. Don’t worry. You can still buy the NFT of your choice from a secondary market. Let’s take OpenSea as an example.
Please remember that this is the market of faith. If you believe in the project, floor price and downtrends should not bother you. For beginners, it is tough to make a profit from trending collections. But if you have trust issues, read on.
Here's what to do once you're on the website:
Step 1: Some might suggest you find the trending NFT to trade. We don’t think this is the best practice for the beginner. Another way to put it, blindly focusing on trending projects is likely to lose money for beginner investors. We would recommend you read the stats before taking any action. Go to the ranking page, sort by time range, project’s category, and chains’ type.
Step 2: Once you’re on the project’s page, click Items, click Buy Now, and set Price: preferably Low to High.
This will show you all the NFTs that are available for sale.
Step 3: Look for NFTs that you believe will increase in value and(or) are currently undervalued after done your research. These will be the ones you would like to flip.
Step 4: Before buying, select the specific NFT you’re planning to flip and click on Properties. Here you can view the traits of your NFT and how rare they are. The more irregular your NFT, the higher its value if you install the TraitSniper chrome extension
Another way is to visit TraitSniper app. You could check the trait of all projects in a nice grid. Therefore you can make a better comparison between NFTs on a project.
One downside is that newly revealed projects’ rank and traits are not available immediately on OpenSea or any other secondary market. This can be solved by using Trait Sniper, showing within seconds for premium users and only 15 minutes for free users.
Step 5: Ensure the project has enough liquidity before you get too eager. In an ideal scenario, transactions should occur every few minutes. To examine how many people are listing products against how many people are buying, go to the Activity page and choose Listing and Sales.
You'll have an easier time finding a buyer if the trade volume is high.
If you are using TraitSniper to check the project’s stats, for a better experience, Trait Sniper has a live event feed with real-time sale/listing events for convenience.
If you wish to read more about defining a good trading platform, please read our newest blog here.
Conclusion
Finding the correct NFT initiatives and profiting from them is a skill that takes time to develop. However, you don’t have to devote all your time to be good at it. Stick to these three golden rules:
Find what you like
Do your research
Never spend more money than you afford to lose
There are no certainties in the crypto market. Popularity, buzz, going viral, scarcity, and a variety of other factors will all play a role in the price of your favorite NFT. Follow the rules, find your investing style, and continue to improve it.
Happy minting and flipping NFTs!
Thank you for being so interested in our Newsletter on Substack. Now we have our blogging platform. Please follow it for the latest updates on the NFTs market and detailed instructions on using Trait Sniper effectively.