3 Ways Investors Can Assess the Strength of an NFT Opportunity – Techdoxx

Deepak Gupta
Deepak Gupta January 25, 2022
Updated 2022/01/25 at 1:05 AM

talk about NFTs it may be filling boardrooms and news feeds, but its complex and novel nature makes it difficult for investors to determine which projects are promising. In fact, only a small portion of investors are reaping the biggest profits from NFTs, according to a study by Chainalysis.

I have been involved in over 50 NFT and cryptocurrency deals and am committed to scaling the DAO (Decentralized Autonomous Organizations) ecosystem. However, a lack of familiarity with the NFT space is why many investors are wary of taking the plunge.

NFTs are more than famous artworks, songs and tweets – they serve as part of the broader decentralization movement. From copyright enforcement to real estate purchase and identity verification, NFTs play an important role in the remote digital world. In the first half of 2021, the market value of NFT grew by 2,100%, reaching $2.5 billion in sales volume. Meanwhile, the boom in the creator economy has opened more doors for NFTs as people don’t have to go through aggregators or intermediaries to create a token.

If you’re talking to a founder who doesn’t delve into the details of the business model, technology, and competitors, consider this a red flag.

Investors need to know the basics of NFTs and their potential, but they don’t need deep technical knowledge. That’s because the real value of any NFT project is in the people who build it. It is they who will sustain promising NFT projects as they face inevitable moments of volatility.

Here’s how to conduct the final litmus test on an NFT project through its creators:

Make sure founder and technician are open

The first NFT was created in 2014 and It sold just last year. The NFT market is still in its infancy, and investors should not expect NFT projects to go through the same vetting process as other technology initiatives. There are not enough data points available, nor tools to track NFT performance. Instead, investors should look for transparency in a project’s leadership and technology infrastructure. It’s less about assessing the destination and more about trusting that there’s a window to watch the journey.

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