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WHAT IS NFT?
This manual contains the basics and answers the initial questions of newcomers to the world of NFT.
The manual is meant for beginners who want to enter the NFT field but don’t know where to start. We will tell you how to find projects and make money. We will also understand the essence of NFT.
NFT stands for non-fungible token, a non-fungible or unique token, that works on blockchain. It first appeared back in 2017 in the Ethereum system.
Blockchain by itself is actually a registry of records. For example, Bitcoin or Ethereum are Blockchain records. The same applies to NFT. Such tokens, like any cryptocurrency, can be stored in your crypto wallet and made transactions with: purchasing and selling.
By buying a token, a user gains an ownership certificate, which, in essence, is a Blockchain record: a line of code confirming that the owner of a token actually owns the original copy of the object.
DEVELOPMENT HISTORY OF NFT
NFT received the greatest development in 2021, but the first brands appeared back in 2020.
Q1 2021 The hype around token sales and different launchpads
Q 2 2021 The mass appearance and development of DEX (Decentralized exchanges).
Q 3 2021 The launch of trends for P2E games. Starting from Axie infinity, lots of games are created, for which you get paid
Q4 2021 The maximum hype around all NFT collections. Many famous personalities start purchasing tokens for big money.
Q1 2022 The simultaneous trend for the cryptocurrency market decline and development of M2E games led by STEPN
$5,530,000 STEVE AOKI DJ and record producer
$5,210,000 SNOOP DOGG Rapper and record producer
$2,200,000 GARY VAYNERCHUK Investor and entrepreneur
$1,490,000 ALEXIS OHANIAN Entrepreneur
$829,577 LOGAN PAUL YouTuber
$765,029 DJ MARSHMELLOW DJ and music producer
$624,719 NEYMAR JR. Brazilian footballer
$621,881 BEEPLE Artist
NFT GLOSSARY
Minting — the process by which you get a digital asset
Hamsters — inexperienced people
Supply — a total amount of NFT in the collection
Roadmap — project plans, perspective and future benefits for users
Rekt — a failure (of the collection)
Whitelist — the right to mint collections
Floor price — the lowest price at the market
DYOR — do your own research
Blue Chip — a credible and respected project in the community
Ripoff — a copy of another, more popular collection
PFP — a collection suitable for social media profile picture
Drop — releasing something new
Skip — skipping a collection or a project
Gem — a cool project which is set to success
Rarity — determines how rare an NFT is
Rug pull — a type of scam in which the project developers disappear after receiving the money
Shilling — the hype around the project, frequent reference
Raffle — a giveaway or a contest
KYC — know your customer (identity verification)
Abuse — taking part in some project or contest from multiple accounts
Pool — total fund
Whales — major players in the NFT community
Hold — long storage of NFT assets
Flip — buying NFTs and selling quickly for a profit
Presale — the primary sale of tokens for a narrow circle of people
Public — sale of tokens to everyone interested
Marketplace — platform for the sale and purchase of NFTs
Gas — a transaction fee
Gas war — increased commission fee caused by a large influx of users
Low bank — a small budget
High bank — a large budget
Sold out — all tokens are sold out
Profit — net profit
Influencer — an expert in the NFT space, who shapes the views and market trends. Such people usually have very large followings on social media.
Degen — a person who possesses a large budget and invests into everything.
TOP PROJECTS AND POPULAR FORMATS
There is such a thing as a Blue Chip, which means collections that have become mastodons of the NFT world. There is a special attitude towards the owners of these NFTs.
For example, if you own a BAYC NFT, then consider that you are a part of a closed society with various benefits, such as: annual merch, different events, obtaining WL to different projects for no reason, and much more.
It is difficult to name the full list of Blue Chip collections, since there are either collections which are very close to becoming Blue Chip projects, or those slowly falling down and do not fit the criteria.
As a rule, the Blue Chip list is static and rarely updated with new collections. Currently, there are about 15 Blue Chip collections at the market.
TYPES OF NFTs
As we have said, almost everything falls under the term “NFT”. However, now and over a large amount of time, only one NFT format is a success, which is profile pictures, aka PFP format.
Most collections follow these trends, making NFTs in PFP format. It is always fun to use the NFT you like as your profile picture, showing everyone you got one.
Animated gifs, those that move, are less popular in NFT. They look interesting, but it is hard to use them as a profile picture. A recent example is The Possessed, and an earlier one is Invisible Friends.
There is also such NFT format as games. P2E — play-to-earn; M2E — move-to-earn.
The P2E concept usually represents games that have their own metaverses with unique mechanics. Players have the ability to earn revenue while they play. Each game launches in-game items, be it lands, avatars, etc. The Sandbox is a great example here.
The M2E concept means the games that are aimed at moving and based on the sports component. A popular example is the STEPN app, where you get paid for walking.
When it comes to trends, it is worth noting the lands in metaverses, which represent certain areas. That is, by buying such a piece of NFT land, you get an online property, namely, in the project metaverse. The best and most functional lands are the BAYC ones — Otherdeed for Otherside.
Influencer LoveMake.eth launched his First NFT collection GM42, which has been minted for free.
The second PFP collection MakeLove 420 was drawn for him by his daughter as a present to set as Telegram profile PHP in 2021. They converted it to code and put on-chain forever. Probably the first ever on-chain PHP on ERC-1155. The code is the law.
His NFT is used in the discord channel GM42 to accumulate GM coins for communicating, attracting new users to discord, server boosting and taking part in promotions, contests and giveaways.
GM Coin can be exchanged on other BlueChip NFTs, such as Bored Apes Yacht Club, Doodles, Goblin Town, RekGuy, etc.
WHAT SHOULD YOU PAY ATTENTION TO?
Once you’ve learned what an NFT is, you need to understand that there are many projects with new ones coming out every single day.
Every project has its own distinctive features, starting with the NFT itself, and ending with the creators. In order to distinguish the good project, one should consider the following:
CREATORS
If the creators are famous personalities, there will be more people attracted to the project and more interest guaranteed.
HYPE
We should pay attention to the number of subscribers on the project’s social media. This indicator can sometimes reflect the interest in the project.
CREATIVITY
This refers to everything that has been created solely by the project team. In certain cases, we might face a ripoff. In 99% of cases, such collections won’t be profitable. Therefore, we should skip them.
ACTIVITY
Basically, it is a total activity on social media. If users actively comment and like Twitter posts or, for example, there is lively communication in the project’s discord, it means the project is at least not bad.
CONDITIONS
Supply means a total amount of NFTs. The smaller this is, the better. On average it is 7,000–10,000 items. Then we look at the minting price, at which we can purchase NFTs when obtaining a WL. The average price is usually around 0.1 ETH.
We certainly pay attention to the conditions for obtaining a WL. Based on this, we analyze the project and make a decision on whether it is worth our time.
CLOSE PEOPLE
Here we pay attention to advisors, CEOs, technical directors of the collection and other people related to the project. If you see a celebrity in the NFT space cooperating with a little-known company, it is a good sign.
If you choose to read about the trends for obtaining and developing a WL, you can find our article here.
MAIN NFT BLOCKCHAINS
There are two main NFT Blockchains, where the real action takes place — ETH and SOL.
Ethereum (ETH) is a network created by Vitalik Buterin and a group of enthusiasts. It is currently the second largest cryptocurrency in the world after Bitcoin. All main collections, including Blue Chip ones, are based on ETH.
Solana (SOL) is a network created by a group of Qualcomm alumni. Having little value relative to dollars, SOL represents a network on which you can build an NFT project, primarily thanks to the network speed. As a separate network, SOL has its own Blue Chip collections.
DISTINCTIVE FEATURES:
- large fees
- plenty of collections
- plenty of artists
- more celebrities
- expensive collections
DISTINCTIVE FEATURES:
- low fees
- volatility, lags
- high risk of scam
- less projects that give large profits
- lots of cheap collections
!!! IT SHOULD BE UNDERSTOOD THAT THE MAIN ACTIVITIES TAKE PLACE ON ETH. SO, IF YOU ARE A NEWBIE WITH NO RELEVANT EXPERIENCE, YOU BETTER STAY OUT OF OTHER BLOCKCHAINS.
WHAT DO YOU NEED TO WORK WITH AN NFT?
You will need MetaMask and Phantom wallets to work with NFT. They will serve as your main wallets, from which you will be performing all your transactions.
Use the chainlist.org website to add the necessary networks. They are required for different sales and transactions.
Botometer.osome.iu.edu checks Twitter accounts for fake followers and bots. The lower the score is, the better.
Traitsniper.com reveals rarity for NFTs on the marketplace. You will need to install an extension on Google, which is the easiest option. Speaking about websites, we can recommend moonrank.app.
Flips.finance is a service where you can view all information about collections, starting from supply and ending with creator’s fee.
Nftcalendar.io — a website that provides real-time information about different collection drops and future collections.
Coinsguru.io — a service that tracks subscribers of influencers and other powerful people in the NFT space.
Dune.com/browse/dashboards, cryptoslam.io, nansen.ai — websites with analytics of NFT market.
Nftevening.com — on this website you will find current NFT news, as well as news from different categories for your taste.
NFTs can be sold on the marketplace:
The main ones are OpenSea and MagicEden, which represent different networks. For example, OpenSea is a platform where collections on ETH are sold. However, through relationships established, some of the collections on SOL can also be placed on OpenSea. MagicEden is a platform for selling NFTs on Solana only.
MOST IMPORTANTLY, HOW TO EARN WITH NFT?
GET WHITELIST
Find a project, open a discord, comply with all rules, and get a role that gives us the right to mint. There are two ways further. Having WL we can either sell it on OTC on Telegram or mint it.
Selling is a less risky option which guarantees you a profit. Minting is a riskful strategy that can bring both profit and loss. As after minting, a collection can be traded at any price in the secondary market. The main advantage of an NFT is that you can initially evaluate how the collection is traded and make a decision on whether to mint it or not.
FREE MINT
More recently, there has started a trend for free mint collections. That is, you can mint an NFT for free (paying only a gas fee). It has been estimated that 1 in 20 collections bring a large profit when there is free minting. Clearly, there are high risks by taking which you can make money, though it is hard. There is also a probability of scam; therefore don’t use your main wallets.
RELEVANT WORK
The NFT field allows you to make money not only on NFTs themselves but also on performing relevant work. For example, drawing a picture in order to get WHITELIST for your project. After you place your services on OTC, you are being contacted directly by interested people. It can also be account sale, that is, you place your services for contests and invites on OTC. Let’s say you are approached by someone who needs to invite 10 people to a project, but he doesn’t have 10 discord accounts, so he takes advantage of your services. In addition, there are many resources that people can trade.
PLACE BIDS
The new OpenSea operation protocol provides an opportunity to place bids, that is, offers for collections. So, a collection costs 2 ETH, but you, having 1 ETH, can make an offer for the whole collection in a couple of clicks.
Here is a chance that your offer will be accepted. First, no one is safe from making mistakes and may accidentally accept an offer at a low price. Second, people sometimes want to drop their NFTs a bit lower than the floor price. You will find out how to place bids in our article.
INFLUENCERS
Twitter is the main source where to search for projects. We recommend you to follow all accounts presented below.
FOUNDERS:
Ryan — BrendEn Mulligan — KEVIN ROSE — lil pants — clon
nelsg — Joe — jejouw — Markus Magnusson — ZAGABOND.ETH
LoveMake.eth — Timpers.eth — Takoa — Alex Becker
DesLucrece — XCOPY — GxngYxng — DeeKay
fauxcondor.eth — MINA — takashipom
COLLECTORS:
INFLUENCERS:
Farokh — LoveMake.eth — Kingfo — Mando — gala
0x7d54 — MaisonGhost — WhyCaptainY — xDoubleQ
TheGorillaLabs — Otto Suwen — shan — MoonOverlord
KosherPlug — Dasfruits — Kussman — AmeerHussainn
BentoBoiNFT — marnie — Kape — SC9 — shamdoo.eth
Cole — Degen Pass ryck — Keyboard Monkey
Blessed NFT — kaleverse.Eth — Rick — 0xInuarashi
ryandcrypto — kmoney_69 — laurawolff.eth
In conclusion, we would like to offer a bit of advice to beginners, who are only starting their NFT journey.
- Use a garant when working on OTC.
- Never invest the last money in the secondary markets.
- Create several wallets for dubious mints and websites.
- Stay alert.
- Chat and don’t be shy to ask silly questions.
- Talk to people, who know much more than you.
In our discord and twitter we share our experience of working with NFT.
We’ve got private channels for GM42 NFT Holders where we give even more educational material and post the results of our own NFT project research conducted at an early stage.
source: https://drive.google.com/file/d/1Kc7AiafApjuhPn09irKApLdYRAPDnFE6/view
