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What Makes a Good NFT Project? Here is the Breakdown!

Are you a newcomer to the NFT verse? Don't you have any foggiest idea about how to get one or what you need to consider? Or, perhaps you don’t even know what makes a good NFT? If you are reading this, count yourself LUCKY because this article will assist you in navigating your way around the NFT world.


What is an NFT? 


NFT Meaning

An NFT (Non-Fungible Token) refers to a digital asset used to represent objects in the real world, including art, in-game items, and music. They are purchased and traded online using cryptocurrency. Also, they are encoded with software, much like other cryptos.

To put it simply, non-fungible refers to something impossible to replace with something else. A limited-edition trading card is a non-fungible item. If you were to trade it for a different card, you would get something entirely different. 


Is NFT the Same as Cryptocurrency?


The similarity between an NFT and cryptocurrency only revolves around their software. A cryptocurrency is a fungible item, while NFT is non-fungible. The former can be traded for one another with the value staying equal. However, the latter comes with a digital signature that prevents NFT items from being traded for; hence, it's non-fungible.


How Does an NFT Work? 


NFT Work

NFTs are stored on a blockchain, which it's a decentralized public ledger used as a system to keep track of all transactions. Those with a knack on this topic are no strangers to the blockchain, for it's the underlying technology that allows cryptos to exist.

The majority of NFT items are stored on the blockchain, like Ethereum. Ethereum is a cryptocurrency or digital currency where blockchain allows the NFTs to hold additional data. It is what makes it different from other cryptos. 


Can Anyone Make an NFT?


Technically, almost anybody can make an NFT. To create an NFT, you must first choose the NFT platform and payment wallet you prefer. The latter is used to pay fees and receive payment should someone purchase your NFT. However, it’s essential to note that the design of an NFT, which is popularly known as minting, is not the same as selling the item. 


What Makes a Good NFT? 

Makes Good NFT

What makes a good NFT is probably one of the many questions that pop up in your mind when you plan to purchase an NFT item. Below is the comprehensive guide to assist you in identifying a great NFT project.


1. Creator Credibility


Accountable NFT creators usually have a checkmark on their pages. However, legitimate creators don't always have a checkmark. In this case, you can check NFT creators’ social media handles. A solid social media presence proves that the creators are credible.


2. Community


A community is the second vital factor to consider before investing in NFT projects. It's something that can be easily found on Telegram or Discord. NFT communities are varied; some have friendly people with solid engagement, while others have toxic individuals with excessive trolls. It is something you need to pay close attention to before joining one.

Related Article: Want to Build NFT Community? Here’s What You Need to Know


3. NFT’s Content


The NFT’s content is probably the most subjective consideration factor. Yet, it remains essential to be considered and comprehended. For instance, you want to purchase a particular NFT artwork. You may want to buy it because you enjoy a work of art. However, you should first evaluate if others will enjoy it because no one wants an NFT with no aesthetic appeal that will only sit in their wallets.  


4. Cultural/Historical Importance


Cultural or historical importance is the next crucial aspect to consider. It explains why the JPGs of Ether Rocks are being sold for $1.8 million. It's not the aesthetics that make people willing to pay for it. Instead, it's because Ether Rocks was one of the earliest NFT projects that makes it culturally significant. The first item of a specific NFT type can also be regarded as a culturally noteworthy project.


5. Number of People Who Own the Collection


Before making an NFT purchase, you also need to consider the number of individuals owning a collection. If different people own more than 50% of the project, this is a sign of a good NFT project. The more diverse the holders are, the higher the awareness and engagement built in the NFT community.


6. Roadmap


A good NFT project features a transparent and professionally-planned roadmap. It’s a document that communicates the long-term value of an NFT project by outlining its objectives and approaches. Short and long-term targets and significant project milestones are a few of the things typically included in roadmaps. 


7. Airdrops Utility


An NFT project with only a few utilities is not worth the investment. A non-fungible token project can be considered outstanding if it has a good utility, like airdrops. This utility allows the holder of an NFT to receive a reward in the form of an additional NFT item. Indeed, it sounds incredible, but it's important to note that if the initial collections have less value, an airdrop might be equally less valuable.

Related Article: What is a Cryptocurrency Airdrop? Here Are the Facts


8. Real-World Meetups


Specific NFT collections come with a particular utility where its holders can host events that are exclusively open to its owners. It is a one-of-a-kind value that can increase the cost of an NFT item and is a sign of a good project.


9. Partnership


Another consideration before investing in an NFT is a partnership. It's an excellent NFT collection if it can attract influential people or a major brand to partner with them. It's a sign of huge success since more people will become aware of the project.


10. A Status Indicator


Owning a well-established NFT has now been an indicator of someone’s status. It becomes another consideration for people to own an NFT. Some thoughtfully established ones often come with a price tag that is not an issue for the rich. It allows people to flex in a world that is slowly becoming digital virtually.

Now that you have known what makes a good NFT, you probably can't hold your horses to start investing in this digital asset. Still, you need to conduct your research before making any NFT purchase. Most projects typically come with educational content that you can take a closer look at to see if NFT investment is suited for you.

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