How to DYOR NFT Projects
Almost everyone says to DYOR (do your own research) whenever they give advice or insights into a project, but they never tell you HOW to properly do your own research with actual resources. Let’s change that for good. The goal of this report is for you to have a ‘questionnaire’ and a ‘check-list’ to go through before you invest in a project and hopefully not get rugged.
Some of these points might or might not matter depending on the goal you’re trying to reach, whether it’ll be for a quick flip or a long-term investment.
Do you like the art? - This one is pretty straightforward. If you absolutely love the art, can’t get your mind off it, and don't mind not having a return on investment, who can stop you? Go for it, you deserve it.
What does the project aim to achieve and how? - We believe that this is the most important aspect you should look into before investing in a project. This is what matters in the long run. Are they trying to help or solve a problem? Do they have a clear idea of how they are going to do it - aka a roadmap? Can you envision it being a utility that’ll have an impact on the ecosystem? Have they clearly stated why and how they’re doing it? (It’s not necessary to figure out the whole project as soon as it’s launched, but it should be necessary to have a clear goal) Remember - most staking only projects won’t last in the long run but if you’re looking for something short and mid-term these might work out. Read our report on why staking is overhyped here.
How strong is the community? - A community that stays together will win together. See if the community is hyped about new announcements, sneak peeks, and if they help each other. Take a look at their discord and see how they interact with each other because each community is different from one another. See that the community is active and not a ghost town. If you can feel their vibe and get along with it well, that’s a really good sign.
How does the team interact with the community? - This is something most people overlook when checking out projects. Getting to the team members and how they interact with their community will say a lot about how the project will end up. Some do not talk with the community at all, some try to boss around the community. Of course, being ‘good’ can be faked but you’d know when you see someone genuinely into the project and helping out the community. If you feel suspicious, trust your instinct.
Is the team doxxed? - This is a tricky one. We know that within the whole crypto ecosystem privacy and security is huge. There’s an aura around the ecosystem with anonymity. For example, we still don't know who Satoshi Nakamoto is and we get why certain things have to be that way but if the people behind the project are doxxed that adds a whole new level of credibility to the project. As an investor, you want to know who is behind the project. Doxxing will also enable you to report to federal institutions in case of a rug. Doxxing doesn’t necessarily have to be public, it can also be done through 3rd parties like RadRugs, Alpha labs, and any other launchpads who do private doxxing.
How does the mint work? - What’s the supply and the price? Is it overvalued or undervalued? Trying to evaluate a project is hard to do. We'll dive into that in another report but you should be able to get an understanding of their value by the mint price, supply, and what they aim to achieve. For example, a purely PFP-only project minting 5K NFTs per 5 SOL is deemed overvalued in the current market unless it’s Picasso himself. The project must also provide investors with a clear plan on how the funds from the mint will be distributed. If this isn’t clearly stated, that's definitely not a good sign. Investors should know how the funds will be used and know where their money is going. Know how the mint works and if they haven’t put out any information on it, don't invest your money.
We like it organic, do you? - With the increasing number of paid advertisements through ‘promoters’, it has gotten challenging to determine how organic the growth is (FYI: Paid promotions aren’t a bad thing at all). Where the problem occurs with the authenticity of the growth is when a project uses ‘bots’ to increase their Twitter and discord numbers. You can determine the validity of the numbers by observing the number of interactions they get from their tweets compared to the following. For discord, you can get a fairly good idea when you check the number of online members compared to overall members. We recommend at least 15-20% of members be online in the discord. Remember - Organic > Non-Organic, Always.
Is there hype? - The amount of ‘hype’ or ‘talk’ around a project is key if you’re trying to make a quick flip. It won’t matter as much on long-term projects but the hype is somewhat needed even for long-term projects to sell out their mint. Check out other discord channels to see if anyone mentions the project or an influencer writing threads about it. If a lot of people in the space know and speaks about the project, that’s hype.
Any similar projects? - There are a lot of copycats out there, It’s always good to look around for similar projects to see how they have performed. This could be similar in terms of utility, price, supply, or even art. A lot of projects over-price or oversupply their mint and fail and you could avoid these types of projects if you take a brief look at the history.
What does your instinct say? - Trust your gut. Do you feel like this might not be a good investment even though every other thing aligns with you? Don’t do it, it’s just the way of the universe giving you a signal of a bad decision. If it gives you warm and fuzzy feelings about the investment and if you can envision it being successful, just go for it.
Here’s a checklist we have created for you before investing in a project:
Useful Links to DYOR
https://hyperspace.xyz/ - You can find the cheapest floor price among all secondary markets in the Solana ecosystem as well as upcoming projects. Market statistics, Most active wallets, and a bunch of other great features.
https://www.solsniper.xyz/ - Solana NFT trading charts, Project trackers, Watch lists, Statistics, and more great features.
https://howrare.is/ - Find out how rare your Solana NFTs are as well as upcoming projects on Solana.
https://nftnerds.ai/ - Statistics, analytic tools and most importantly buy auto-trigger features. Ethereum only.
https://moby.gg/ - Real-time data and statistics on Ethereum projects.
https://nftnow.com/ - NFT news and articles on projects.
NFA. DYOR. Ohmmm