How To Detect Red Flags In NFT
Does this particular NFT is meant to provide a utility (breeding, burn/stack/fusion mechanisms, gaming incorporation with other project (VX Kongz & Sandbox) etc…) ?
If the answer is yes then it’s a usually a good first sign.
Does this NFT generate $$ with NO UTILITIES at all ?
If the answer is also yes big red flag right there - It could be easily qualify as a security (in the US at least) and could face a lot of potential issues.
If you want to know more about security read this topic Passive Income = LOSE ALL YOUR $$
Point is, if a project promises you any sort of passive income IT MUST BRING A UTILITY ALONG WITH IT… They must clearly state that this said token is part of the all project ecosystem and not just $$ they give back to holders. If it doesn’t, run away…
For example, CyberKongz clearly states that 1 $BANANA = 1 $BANANA, when in reality a $BANANA is worth $55 right now but it prevents them from being seen as a security and get in trouble with agencies such as the SEC or even with Opensea TOS.
Project being almost exact copies of other well-known projects… Damn do we see that a lot these days…
I don’t even need to tell you how it would really f*ck up the value of the said collection if they get slapped by a copyright infringement notice, but in short : NO STONKS
Examples : Mirrored Punks is THE EXACT SAME ART as Crypto Punks but just mirrored and because of this they got slapped HARD
More on that here CryptoPunks and Copyrights — The Outer Realm
On the other hands, some projects are clearly inspired by OG collection such as Crypto Punks, Bored Apes etc but still try to be unique in their own way.
Example, Dysto Punks, similar but no way to confused them with their big bro Crypto Punks. It is fair to assume that they will never get sue because of their art & style.
Floor is 4.39 ETH btw, so these bad boys are doing great !
I know I know memes are funny blablabla but from a financial/investment point of view it’s shit.
Example : We all know Chad, well there is Chads NFT. Brought to Opensea in late August…
Soooo let’s analyze this collection real quick :
10k collection for only 2.3K holders that’s not good
FP .005 well that sucks d*ck
311ETH traded that’s just sad
But mostly due to a big single day push that lead to a supply shortage and a big increase in FP, but guess what, that happened once, people had their fun, probably not gonna happen again and the overall FP has been constantly decreasing since launch.
But a tiny tiny few of these NFTs meme are somewhat doing good like this one
Although this is a single piece collection, and was only able to get that high because that picture legally belongs to her because is it her. (She plan to use the money to either pay for college Or buy a horse )
But again from an investment standpoint STAY AWAY FROM MEMES, they’re fun when inserted in “facho” YT videos but will not do well as assets.
Very tricky to bring an objective unbiased point of view to this, but the past taught us that MOST OF THE TIME collections created/supported by rappers, IG celebrities etc don’t do well in the long run but are quite easy to flip for quick $profit.
Be careful though because celebrities can get rugged and if that happens it’s game over !!
Here we can see a Solana project promoted by the one & only Lil Uzi vert, unfortunately this genius deleted his promo Twitter post for unknown reasons which lead to the collection’s floor price dropping instantly into the abyss.
This collection has not recovered, .18 Sol FP and still dropping… On its way to meet Francois Hollande Q4 2016 approval rating down at the bottom of the sea
On the other hands, there are a few “good/intelligent” influencers in the NFT game, for example Gary V the founder of VeeFriends. He really managed to position his collection perfectly, he knows what works and what doesn’t in this space (unlike Instagram influencers…).
FP 10.5 ETH so more or less $40k not bad right
10.3k pieces collection for 5.1k holders that’s really good
And finally 29k traded oh sh*t that’s more than $110 million
See what I mean ???
This is the end of this topic guys, for those still here I’m gonna drop a little something of value (if you can read)…
These are some screenshots of a “friend’s” GAMING wallet, he dropped this to me during a conversation we had on gaming crypto in a discord private group couple days ago… I’ve just ask him if I could share it with a few frenchy friends and he said yes.
It’s not financial advice ! I managed to found really good value taking a look at some of the token he owns, maybe you will as well … Or not