NFT stands for Non-Fungible Tokens. NFTs are one-of-a-kind, unique digital items stored and managed on the blockchain. When you buy an NFT, the blockchain records the transaction on a public ledger. This automatically serves as a verifiable deed of sale, making you the only legitimate owner of that digital item.
There are also a lot of use cases for this technology, including virtual reality, decentralized games, exclusive memberships, immortalizing artworks, and more.
6 Ways to DYOR
Before taking the plunge and purchasing your first NFT, you should DYOR first aka do your own research. Here's a guide on how you can do it.
1. Go to the Project’s Website
The project's website can already tell you a lot. You have to ask two major questions: Does it look legitimate? Is there a lot of work being done? The websites of more established NFT projects would usually have objectives, a roadmap, and a plan of action.
Tip: Avoid NFT projects that only talk about the hype and guaranteed returns.
2. Follow the Creators/Founders
Assuming that the project's founders are not anonymous, look them up and search for their credentials. Normally, the team behind an NFT project involves software engineers, blockchain programmers, app developers, and/or crypto investors. NFT projects created by reputable people tend to do well because they have their names on the line. They are also more reliable when it comes to the development and sustainability of the project.
3. Check Their Discord Community
The project’s Discord channel will give you a sense of what the community is like. Pay attention to the general chat, and try to understand what they are talking about. Fundamentally, an NFTs Discord community is created to provide updates. Conversely, too much chatter about a price pump is generally a bad sign.
4. Engage With Their Social Media Channels
The people's support is one of the strongest driving forces to move the project forward. Aside from Discord, the project’s social media presence plays a major role in determining the NFT’s value. Get a sense of how the project appeals to people when you engage with its social media channels, especially on Twitter, Instagram, and Telegram.
5. Understand Their Long-Term Roadmap
Large NFT projects usually have a long-term plan, which plays a significant role in driving their value in the future. The project's roadmap should involve future goals, integrations, partnerships, upgrades, additional features, staking, airdrops, token utilities, etc. If you can’t find the roadmap on the project’s website, you can also try asking for it on their Discord channel.
6. Calculate the Supply-to-Holder Ratio
On-chain trading metrics will allow you to determine the NFT's supply-and-demand ratio, which can be a good indicator of whether the project is worth your time. The ideal scenario is when the number of NFT holders is proportional to the total supply of items in the collection. For instance, an average supply-to-holders ratio of 2:1 means that the project is not prone to price manipulation—compared to projects with fewer NFT holders and more items in the collection.
How to Buy NFTs:
Step 1: Create a wallet to buy and store your NFTs
MetaMask is a free browser extension that serves as a wallet and a gateway that allows you to interact with the Ethereum blockchain, including all the decentralized apps (dApps) built on it. To purchase NFTs on the Solana network, you may choose Phantom.
You can use MetaMask as a plugin in Chrome, Firefox, Brave, or Edge. It's not yet available for the Safari browser, but there's an iPhone and Android app for mobile phones.
Here’s how you can download and use Metamask:
- Go to the MetaMask website.
- Download and install it on your browser or phone.
- Import your existing wallet or create a new one.
- Create a password.
- Note down your Secret Backup Phrase.
Step 2: Buy ETH to transfer to your wallet
Once you have MetaMask, you’ll need to load it up with enough ETH to cover the the price of NFT you're buying plus gas fees. You can buy ETH on Coins.ph then transfer it to your MetaMask wallet.
PRO TIP: Depending on network traffic, gas fees can skyrocket at any moment. You can monitor Ethereum gas fees through ETH gas tracking sites like ETH Gas Station or Blocknative and choose a time when transaction fees are relatively low.
Step 3: Go to an NFT Marketplace
OpenSea is currently the largest NFT marketplace. You can use it on your computer by going to its website or downloading its app version for iOS or Android. Aside from buying NFTs, users can also mint, sell, and initiate auctions for their own NFT creations. The marketplace infrastructure is free. However, any sale incurs additional fees.
OpenSea relies on blockchain technology to operate. Using a smart contract, any NFT for sale can be paired with a buyer. Once the two parties agree to have a deal at a specific price, the transaction takes place in one go.
TIP: A blue checkmark attached to collections or creators signifies that it's verified.
When purchasing NFTs on Opensea, you have 3 options:
- Buy Now - instantly buy the NFT at the list price
- Make an Offer – place an offer (can be lower or higher than the list price) to the seller who may or may not accept it
- On Auction – the highest bidder at the end of the auction wins the NFT
Once the transaction has been fulfilled, the NFT will automatically appear in your wallet. You can view it under the profile of your OpenSea account.
How to Get Whitelisted for an NFT Project
A whitelist is a term for a list of pre-approved wallets that have assured slots to purchase the NFT. Whitelisted members can secure an NFT before it is even launched or listed in the marketplace. During the presale, being whitelisted could either guarantee a spot during a mint or sometimes a discounted price.
Although there are many other ways, you can generally get whitelisted by:
- Finding a project before the launch
- Joining the Discord community and becoming an active member
- Joining whitelist raffles on Discord and Twitter
Disclaimer: The information and publications in this article are not intended to be and do not constitute financial advice, investment advice, trading advice, or any other advice or recommendation offered or endorsed by Coins.
Get your crypto journey started with Coins.ph
Coins.ph is regulated by the Bangko Sentral ng Pilipinas (BSP) and is the first-ever blockchain-based company in Asia to hold both Virtual Currency and Electronic Money Issuer licenses from a central bank.
Sign up for a Coins.ph account now to start trading OR download the Coins.ph app. Once you have verified your account, you can convert PHP into the cryptocurrencies of your choice.
Start trading your favorite Crypto on Coins Pro with fees as low as 0.05%!
Join the Coinmunity
Connect with like-minded crypto enthusiasts! Be the first to learn about our news and campaigns.
Join us on:
- Twitter: https://twitter.com/coinsph
- Discord: https://discord.io/coinscommunity
- Telegram (Announcements): https://t.me/coinsph_announcements
- Telegram (Community): https://t.me/coinsphfilipino
- Instagram: https://www.instagram.com/coinsph/
- Facebook: https://www.facebook.com/coinsph/
- TikTok: https://www.tiktok.com/@coinsph_official
- YouTube: https://www.youtube.com/coinsph
