INVEST May 2022

Authority and Community make investing in NFTs attractive

Authority and community are the most intangible aspects for an artist when developing in the NFT markets, so we explain what to do.

It is very logical to think that investing in NFTs is an excellent option. In fact, let's put a quick example in context:

• A decade ago a BTC was worth approximately 2,800 USD

• For the present, its value is $28,000 USD (1,000% revaluation).

• It even reached $45,000 USD and has gone down and up.

This kind of thing immediately makes one think that these emerging assets (NFTs) could go on a dizzying ascent if authority and community go hand in hand.

Now, when we are interested in investing in the NFT market, it is difficult for us to choose which asset will be our bet. The reason is that it is a market that is flooded with works and collections coined by digital artists. So:

What is the most reasonable way to invest in NFTs?

The best thing you can do is use a marketplace. There, we must look for works or collections for that purpose. That is already part of a personal decision, but basically we can divide the marketplaces into 2 categories:

- The most polar

- The most exclusive

All these markets work for recognized artists of the environment at a regional or global level.

For the first case we can cite OpenSea, SuperRare and Rarible. Now, there are the exclusive Foundation and Nifty Gateway marketplaces.

What gives NFTs value over time?

Let's start by clarifying the points of Authority and Community.

Authority

The reputation that the artist has will be an important factor in projecting whether that NFT could increase in value over time or not.

If the artist manages to be recognized, his works will be sold in the best way. This is one of the indications for investors when entering the market as owners.

However, there are many artists who are just starting out in the digital market and through their works they demonstrate great talent. This alone in itself is not a conclusive signal to invest, but it is an indication to take into account.

We must also validate this with other issues that do not have to do exclusively with authority. Therefore, the most important point is what we deal with in this NFT Trends post. We are referring to the Authority and, of course, to the Community.

Community

At this point another important factor in determining an investment is the community behind the NFT works.

If the works are discussed on the networks, if the artist or his NFT collections are associated with Twitter, Discord or Instagram accounts where a forum is generated around the artist and / or his works. Another point is whether your assets are promoted on high-traffic websites. That will increase the opportunities for him to be known and a good attraction to invest.

If we talk about NFT collections, then in our article "The different types of NFTs to invest in" we concluded that avatar collections could be an accessible investment. All this if a collection is located that has just been released on the market and at prices within the reach of any type of investor. Remember that cryptocurrencies in general have increased in value over time.

Sometimes there are casualties, but everything is relative

If these conditions are met to make the decision to invest, we must focus on the community behind said collection. It is not conclusive, but if the author and the collection have activity on Twitter, Discord, Instagram, etc. and a good number of followers is another indicator to invest.

There are NFT collections that exceed all the mentioned issues, in general they have a ”roadmap" (roadmap in English) where they indicate, for example, exclusive benefits when acquiring said NFTs.

In fact, by owning those NFTs, you can exhibit them from your digital wallet and have access to exclusive events, VIP sections, meetings with celebrities, and endless issues that generally complement the possession of an NFT with benefits in real life.

Undoubtedly, these characteristics considerably enhance the value of NFTs and their revaluation over time, so they are another indicator to invest.

Investing in NFTs is promising

These collections are aimed at medium and large investors, since the value of their assets does not fall below 1 Ehereum. In fact, sometimes they come to have a price of 50 or 100 Ethereums.

Recall that as of May 2022, the price of 1 Ethereum is equivalent to approximately 3,000 USD

Finally, it may be interesting to verify that the NFT or the collection of NFTs has movements on the Blockchain. That is, it has already been bought or sold one or more times. Also, remember to check the number of visits and if it is marked as a favorite.

You can also look at the artist's royalty percentage. If there are very high royalties (of more than 10%), they are not well seen by investors.

The bottom line

You can see all this information within the asset information presented by the Marketplace such as OpenSea, SuperRare, Rarible, etc.

If it is an artist who is just starting out and who perhaps does not comply with these basic checks, the decision should be made based on the other indicators mentioned in the note.

Authority and Community are two determining factors for investing in NFTs in the market. However, we leave that decision to you and at the same time to follow our definitive guides on digital assets.

NFT Trends