How to avoid missing the next thousandfold NFT project?

This article was published in The Crypto Art Industry, author: Loopify, translated by: Rhythm BlockBeats.

Recently, numerous NFT projects have attracted countless people's attention due to their enormous wealth effects. A trading card from NBA Top Shot sold for as much as $100,000, while its cost was only $230, yielding returns of hundreds of times; the NFT newcomer Hashmasks is even more exaggerated, with an NFT that initially cost only 0.1 ETH selling for a staggering 420 ETH on OpenSea, yielding returns of thousands of times. Many readers missed these already explosive NFT projects and hope to find the next thousand-fold NFT project. This article translates the work of renowned NFT investor and crypto artist Loopify for readers' reference.

(Note from the author: Before we start discussing, I need to clarify that these are just my personal thoughts. You can agree, disagree, or form your own opinions about my views. This article does not constitute investment advice.)

How to Find the Next NFT Project That Will Achieve Great Success?

How can you determine how much appreciation potential a certain NFT project has? I will briefly explain the factors I consider when investing in a project.

I have been in the NFT space for over six months, witnessing the rise and fall of countless projects. I have missed some successful projects and have also encountered some troubles, but all of this has helped me learn how to choose the next NFT project worth investing in. Before investing in a project, I ask myself the following or more questions and seek answers:

• Who created this project?

• When was this project created?

• Who has already bought NFTs from this project?

• How did it come into existence?

These are relatively vague questions, but answering them will help gain more knowledge about the project.

I believe there is one thing you should always keep in mind. The NFT space is currently entering the mainstream spotlight, with many celebrities and influential people researching and joining the NFT field. This means that a large number of projects will emerge, especially those created by people you have never heard of. This can lead to many safe and legitimate projects being overshadowed and not receiving the attention they deserve.

Do I Know the Creator?

If I know them, then I will consider this project a treasure. Whether an NFT in a project can be sold depends entirely on the creator of the project. If people trust the creator, they will also trust the project and be willing to help it achieve its vision. This is crucial and was something I thought about when I launched my own NFT collectible project earlier this month. (Note: The original author Loopify launched the NFT collectible project NFTrees earlier this month.)

When Was It Launched?

Before entering the market, you need to understand the market; otherwise, you may fall into the trap of dumping. Ask yourself these questions: Is it still in the primary stage or has it reached the secondary stage? Is the project's popularity because it is still in the early stages? Will you wait until the market calms down before buying it? These questions will prompt you to think about the long-term development of the project. While it is essential to thoroughly research the projects you invest in, the timing of entry is also crucial.

Who Has Already Bought NFTs from This Project?

Do you know them personally, or have you heard of them? Answering this question can help you avoid buying something worthless. This is somewhat similar to the previous question; you certainly do not want to miss out on good projects. Imagine if a famous investor already owns more than 20% of a project's NFTs—what would happen?

On Which Chain Is This Project?

You need to understand that a legitimate and safe product/service is worth investing in, so you should always conduct thorough research. This will help you stay away from scam projects and avoid being taken advantage of. As mentioned earlier, it is essential to understand the creators and the technology behind the project. Not every NFT collectible project is on the same blockchain; some may be on Flow, some on Wax, and others on different chains. You need to know how much control you have over your NFTs and whether you can easily access them.

NBA Top Shot is a great example. It is on the Flow blockchain, and many people spend money to buy card packs, but most of them do not realize that, due to KYC reasons, their funds often need to wait weeks before they can be withdrawn.

Can This Project Develop Long-Term?

You can look at the project's roadmap and the goals they plan to achieve, and think about whether they have the possibility to reach those goals and whether the project team is putting in the effort.

Let me show you a chart that perfectly illustrates the different stages that NFT projects typically go through. The author is my good friend Matty. (Note: Matty, also known as DCLBlogger, is a renowned NFT investor.)

The various stages shown in this chart may change over time, but the sustainability of a project mainly depends on two aspects: incentive mechanisms & community.

Creators can provide incentives and rewards, whether by adding a complete model like a game or by offering benefits to holders in some way, which will continuously increase the project's value, just like NFTrees.

The community is used for promotion and does not require any incentive measures. It does not need to describe the envisioned future to people because its history is enough to attract people to join, just like CryptoPunk.

Case Study: Hashmasks

Over the past few months in the NFT space, I have noticed that these projects are intricately connected. Below is a case study of Hashmasks from my perspective.

This project is one of the most eye-catching projects in the NFT space so far, with a very effective FOMO mechanism, and it is a project I missed. It is one of my personal favorites mainly due to its Easter eggs, so keep that in mind.

"Missing projects is inevitable; you can't participate in every project."

Hashmasks has many different ways to combine into a mechanism that elevates users' FOMO emotions, and here is one of those ways.

There are only 16,384 Hashmasks, and they are sold by initially offering a specific number of NFTs at a price of 0.1 ETH, with the price increasing as the number sold increases.

People feel they are about to miss out on the primary market sale, so they think buying now is better than later buying at a markup in the secondary market. They do not want to miss out, especially since users in the community are discussing this project passionately.

Your Hashmask is initially unknown; you do not know what it looks like, and if you purchase a Hashmask, you will receive NCT tokens to rename it. If people buy in the first phase and sell their NCT tokens, their returns can be as high as 10 times, and if they are lucky and their Hashmask has some rare attributes, their returns can reach hundreds of thousands of dollars. The highest transaction price for Hashmask reached 420 ETH, so from an economic perspective, Hashmasks is a very good project to enter.

In the short term, this is currently the most successful NFT collectible project, but we need to consider more factors, such as whether it can maintain its vitality in the long term.

People mainly seek economic benefits from these projects, and the NFT market does not necessarily follow the "hold" game rules like cryptocurrencies such as Bitcoin. If it wants to develop long-term, a healthy market is needed. Hashmasks has designed many mechanisms, and they have been well executed, which has contributed to its success. However, this does not mean that a project doing the same things will also succeed like Hashmasks.

Every project has its unique characteristics, and NFTs are a fresh field, with Hashmasks hitting the nail on the head in this domain. The Hashmasks community is very active, with many people participating and promoting it spontaneously.

Where Can I Find These Projects?

This is a very common question, and as the NFT space gains more attention, this question will be asked by more people. Not long ago, virtual land on Axie Infinity sold for $1.5 million, and celebrities like Lindsay Lohan, Soulja Boy, and even Mark Cuban have entered this field. Additionally, their mentions of NFTs will attract a large number of newcomers to the space, and it is expected that NFTs will soon enter the mainstream. New projects are emerging every moment, and understanding these projects is like discovering ICOs in advance.

You can follow the right people on Twitter, engage with industry experts in quality Discord communities, and even track famous addresses on Ethereum explorers. For example, I often talk about new projects on my Twitter and share my reasons for believing they might succeed.

There is no method or guide that can help you find "all" the best NFT projects. Every recommendation carries a certain personal sentiment, so if you cannot find ways to gather more information, you are likely to miss out on some excellent projects. You need to do your own research, DYOR, and share and communicate with others, lurking in Clubhouse rooms, joining quality Discord communities, and following influential figures in the NFT space. Many underexposed NFTs can be found by tracking the wallets of top NFT investors, and Ethereum explorers can conveniently track ERC-721 tokens.

Learn to forge your own path and make your own judgments. Discover projects on your own, then conduct research; you can find a long-term project, or a short-term project to achieve financial freedom, or discover something innovative, or anything you desire.