The Ultimate Guide To Finding and Investing in Early NFT Projects

NFTs have been one of the major talking points on the internet over the recent months. If you’ve been following the happenings in the NFT world keenly, then you know many people have made a killing by investing in NFT projects.

The NFT space is still growing and every day big players are joining the industry. To give you just a recap, here are some recent developments:

  • Facebook just rebranded to Meta to shift focus on their Metaverse Project which will feature a virtual world.
  • Nike filed trademarks for virtual clothing.
  • Microsoft just entered the Metaverse race by planning to integrate 3D avatars and immersive capability in Teams.
  • Twitter CEO Jack Dorsey Sold his first Tweet as an NFT for 2.9 million.
  • Celebrities including Jimmy Fallon, Jay Z, Doja Cat, Grimes, Logan Paul, and many more have active investments in NFTs.

All these developments prove that NFTs will be around for a long time and there’s a ripe opportunity to make a good amount of money.

An Introduction NFTs

NFT stands for non-fungible token. A non-fungible token refers to anything with unique properties that cannot be exchanged for another due to the said unique properties. On the other hand, a fungible token can be exchanged for another as it is defined by its value rather than its unique properties.

In summary, if you buy an NFT, you’re the sole owner of the NFT and the proof is recorded on the blockchain, so no one can transfer it or sell it except you.

For a more detailed explanation, check out the beginner’s guide.

Understanding NFT Projects

Before getting started, you need to understand how projects work and the terms associated with them.

NFT Project:  A typical NFT project involves a collection of digital art created and stored on the blockchain, mostly on Ethereum and Solana but there are others. The collections usually feature less than 10K pieces and are usually priced according to rarity and the price set by the owner of the NFTs.

Minting: Minting an NFT is the process of storing your NFT on the blockchain after which you can see it on your wallet, transfer it to another address or sell it on an NFT marketplace.

Presale: Pre-sale is the period an NFT project goes on sale before it launches a public sale. Getting in during the pre-sale is the goal as prices are usually lower than the public launch price.

Utility: Some NFTs try to provide more value by attaching utilities to the NFT art. This can be in the form of in-game perks such as characters or the ability to redeem the NFT for real-world items including real estate, cars, furniture, merch, etc.

How To Get In Early And Make Money

Investing early in projects is very important when trying to make money in NFTs, but there’s a strategy to follow.

If you’ve been around the NFT space for a while, you’ve probably heard of Cryptopunks and Bored Ape Yacht Club.

Back in 2017, the Cryptopunks NFT collection was created by Larva Lab founders Matt Hall and John Watkinson. They initially offered all 10,000 of them for free and they were quickly claimed. They kept about 1000 for themselves. Back then NFTs weren’t that popular and owners who sold made anywhere from $1 to $30.

However, recently two Cryptopunks were sold for around $7.5M each. So imagine how much you would have made if you had got in early either by holding out or buying them for cheap.

If you had bought a Bored Ape Yacht Club NFT at launch, you would have minted for around 0.10 ETH or $300, going by ethereum price at the time.

Right now Bored Ape Yacht Club NFTs are one of the most popular and the most recent sale on OpenSea was 39.0623 Ethereum, around $175,855 at the time of writing.

To see how NFT projects are doing, just visit OpenSea and check out a few projects to see what the recent sales are.

So I’m going to give you a strategy to follow when looking for worthwhile projects that are worth investing in. When looking for a project, you want to find one that has a whitelist. A whitelist is an exclusive group of people who will be allowed to mint NFTs during presale and in turn enjoy great prices.

When you get into a project’s whitelist, the creators will put your wallet address into a smart contract that will verify you and allow you to mint together with the lucky few.

Prices are usually low during presale and whitelist members can mint anywhere from 1 to 10 NFTs, depending on the number set by the creators. The prices then increase during the public sale and thereafter those who want to flip can sell for a nice profit.

If you mint 2 or 3 NFTs at pre-sale, you can flip one or two on the secondary market and hold the other in case the project becomes highly valuable down the road.

How To Find Valuable NFT Projects

To make money in this space you need to conduct solid research and great timing. You can find early projects that are yet to launch on:

Before investing early in a project, you need to gauge whether it has the potential to be profitable. And to do that, there are key performance indicators that you need to look at. These are:

  • Art
  • Utility
  • Social following
  • Social Media Activity
  • Total number of NFT pieces
  • Pre-sale Price
  • Secondary Market Price/Public Launch Price
  • Road Map

Art

Finding a project with great art is essential as that is what is hot in the market right now. While this does not apply to all projects, look for a project that demonstrates creativity with their art. Are their pieces beautiful, unique, or clever? If you look at Bored Ape Yacht Clubs, their pieces are well done and unique.

Cryptopunks on the other hand relates to a lot of Minecraft fans with pixelated art.

Utility

Some projects accompany their art with utilities, creating more value and attracting more investors. For example, The Sandbox is a popular Metaverse project selling NFT utilities. Their NFTs are booming right now despite them not offering any beautiful art, just pieces representing parcels of land on their Metaverse.

Owning land on The Sandbox Metaverse is valuable as you’ll be able to populate your real estate with games, hold contests, customize assets, monetize assets, and much more. So people are not investing in art but solely for the valuable utility, which is the Metaverse real estate.

Social Following

A valuable project should have a significant social following. You don’t want to invest in a project that doesn’t attract any interest. So the first step is to check their following on Discord and Twitter. A good following should be around 2k to 5K followers.

This number is not absolute, so you can go above or below the parameters based on your judgment.

A lower number of followers means you have a higher chance of getting into the whitelist while with a higher number it may be too competitive.

Typically, it’s easier to get into a whitelist when the project has a few followers, as opposed to when the project has picked up. This is because most creators make the whitelist qualification process more harder as the follower count increases.

Social Media Activity

When you check the socials, you want to make sure the creators are actively engaging with the community. This demonstrates that they care about the project. Also, engaging with the community is how most creators choose members who will get into the whitelist.

Total Number of NFT Pieces

Most NFT projects feature less than 10k pieces. More than that, and it will be difficult to flip your NFT as there will be lots of undercutting on the secondary marketplace.

However, this does not apply to all projects. For example, the total number of The Sandbox NFTs is 166,464. But these are Metaverse properties that are so valuable, so the total number does not matter that much as many wouldn’t be looking to flip.

Pre-Sale Price

Is the presale/whitelist price lower than the public launch price? Information about prices is usually posted on rarity.tools, nftcalendar.io. and on the Discord Project Page.

Secondary Market Price

The price at public launch should be higher than the price at pre-sale.

Road Map

The Road Map shows the creators’ plans for the project. What are they planning to do? Are they going to launch a utility? Launch more perks for NFT owners? Create an exclusive community for owners? Giveaways for the community? Donate to a charity?

The roadmap is usually posted on the project’s website and progresses depending on a set percentage of NFTs sold. You should use it to judge how solid the project is. For example, below is a roadmap for the archangels project with a launch date of December 9th. It’s a viable project with around 12.5k followers on Twitter and around 11k members on Discord.

So that tells you lots of people believe in their project and roadmap.

Whitelist and Minting

Once you find a project with great art and/or utility and growing interest. Join their discord and follow their Twitter and try to get into their whitelist. Sometimes the whitelist is reserved for a set number of people and sometimes it’s open for everyone, but only for a limited period.

After finding a project that satisfies the key performance indicators, once you get in, you can mint your NFTs on the project’s website. For this process, you’ll have to open a Metamask Wallet if the project is based on Ethereum and a Phantom Wallet if the project is based on Solana. There are other wallets, but these are the most popular and should work with all marketplaces.

If you miss out on a pre-sale for a project you like, you can still mint during the public sale or buy it from the secondary marketplace before the public sale. You can then flip it for a higher price on the secondary market if the prices rise. However, you need to monitor the floor price (lowest price of an NFT on a marketplace). If you minted your NFT for lower than the floor price, you can flip for a good price.

Check out our comprehensive guide to making profit flipping NFTs.

Now you know how to find and invest early in new NFT projects. Try to always be on the lookout for projects that satisfy the key performance indicators. Also, be on the lookout for new NFT projects on other platforms like Reddit, Tiktok, Youtube or from those in your circle, if they have info on brand new projects with potential.