Celebrities are investing millions in NFTs. With the increase of investor focus on NFTs, it’s important to highlight the guidelines to avoid being a victim of fraud and failed investment. In part 2, we discussed some reasons why celebrities are not joking with NFTs. No doubt, NFTs are not only for celebrities and other investors.
Gary Vee recently predicted that the fans are going to become the record label. He also stated that NFTs are more dangerous than Napster, SoundCloud, and TikTok because with NFTs, the record labels don’t have to be the funding mechanism for the artists. He also said that with NFTs, artists can raise $5 million overnight from their audience and keep 80%, unlike when they are funded by record labels.
We are faced with a multitudinous choice in the NFT space, from avatars to virtual assets in the Metaverse (virtual environment), and users have little time to select NFT.
What are the areas to look into when seizing NFT opportunities?
The NFT Project Benefits
The flavour of the market right now is avatars. However, there are other NFTs like virtual land, gears for gaming, and other things. Irrespective of the flavour of NFT, it’s helpful to look at the benefits of the project. Let’s look at an example from the Bored Ape Yacht Club. “Your Bored Ape doubles as your Yacht Club membership card and grants access to members-only benefits, the first of which is access to THE BATHROOM, a collaborative graffiti board. The Bathroom contains a canvas accessible only to wallets containing at least one ape. Like any good dive bar bathroom, this is the place to draw, scrawl, or write expletives. Each ape-holder will be able to paint a pixel on the bathroom wall every fifteen minutes. Think of it as a collaborative art experiment for the crypto sphere. A members-only canvas for the discerning minds of crypto Twitter.” They also give access to exclusive drops, and the rights to use the images of the apes one buys commercially forever. This is like community building on steroids.
It’s prudent to gather information about the project. Check out their blog, papers, marketing strategy, etc. And take note of the benefits.
What Use Does It Serve?
Many NFTs out there are more like a means to an end. Just as you would check the value of utility tokens, you should check the utility value of NFTs. What use does the NFT have? Consider the virtual lands (which are NFTs) in The Sandbox community (a metaverse). They can be used to organize events and also be rented. It gives functional utility value to the metaverse community it serves. This process is like asking what needs the NFT fills and what it gives the metaverse. From understanding their value proposition, you can see their growth potential.
According to @J1mmy.eth, an early buyer of Bored Ape: “bored apes make great personal profile pictures.” Today, we see most celebrities changing their profile photos on Twitter to Apes they purchased.
Collection Size, Community and Sale
NFTs are often a collection of between 5,000 and 10,000 pieces. When other people buy portions of these NFTs, it can also indicate progress. It’s like buying land in a developing community where the number of purchases before yours validates the value of the land in that community. You can also check their social media community size. The size of the community can act as an indicator of a legitimate NFT.
Partners and Team
You can check who they are associated with or in partnership with. An NFT project that is in partnership with a successful brand is more likely to have good value in the future. Who they collaborate with to enrich their NFT community is vital. The background and skillset of the NFT project’s team are vital.
Conclusion
Furthermore, it’s prudent to consider NFTs that are set to have huge demands in the metaverse. We encourage you to do some research before purchasing an NFT to have good value for your money.
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