How to know if an NFT project is legitimate
Non-fungible tokens (NFTs) are arguably the hottest relatively new trend in crypto, attracting whole new audiences, creators, users, investors, and collectors to the crypto ecosystem. Anonymous cryptonauts selling “homemade” tokenized memes to Burger King giving NFTs as part of a marketing campaign, NFTs are apparently everywhere.
But with so many NFTs going around, how do you know if an NFT project is legitimate?
In this guide to NFT valuation, you will learn what to look for to find out if an NFT business is legitimate or not.
What are NFTs?
Non-fungible tokens are unique crypto tokens on a blockchain that represent a unique asset in the physical or digital world.
NFTs can represent artwork, music, digital identities, tickets to games and shows, game tokens and even, famous tweets from famous people.
Unlike fungible cryptocurrencies like monero (XMR), where each XMR can be traded with another XMR, NFTs are non-fungible meaning you are swapping one NFT for another because each is unique and verifiable.
NFTs can be found in various NFT marketplaces where parties can buy, sell, display and even create NFTs. Popular markets include OpenSea, Scarcity, Super rare, and Foundation.
As the value and interest in NFTs continues to increase, nefarious actors seek to take advantage of new NFT entrants. Read on to find out what to look for to find out if an NFT project is legit or not.
How to assess the legitimacy of a TVN project
The more NFTs are published and shared, the easier it becomes to observe behavioral and financial patterns using data, community feedback, and experience.
Here are the most important factors to consider when analyzing an NFT project to help you determine whether NFTs are legitimate or not.
Perhaps the most important factor to consider when assessing the validity of an NFT project is brand recognition.
If an NFT collection has a history of active trading and a steady increase in the value of the individual NFTs in the collection, you will likely have come across a legitimate NFT project.
Additionally, if you can find regular media coverage and active conversations by reputable members of the crypto community about the NFT brand, you are probably considering a project that has value.
The most reputable NFT collections generally have vibrant communities of collectors and fans.
If an NFT brand that you are looking at has little to no community and it’s hard to find online communities to discuss NFTs (like a nearly empty Discord channel), you might want to steer clear.
Identity of the creator
If an NFT collection has been officially launched or endorsed by a major brand, celebrity, athlete, or established artist, you are most likely dealing with a legitimate NFT project.
The beauty of NFTs – and one of the things that make them attractive to artists, brands, and designers – is their traceability. You can see who the original creator of the NFT was, when it was minted, how many people traded it, and even how much it was sold in each exchange. This will help you avoid buying bogus NFTs from scammers who simply right click and save JPEGs, and sell them as “originals” to unwitting buyers.
The more established the creator, the more likely you are to be dealing with a legitimate NFT project, even if the collection wasn’t started by an influencer or celebrity.
The underlying blockchain
Ethereum (ETH) has been the channel of choice for the NFT market, emerging as the most popular blockchain for NFT creators and brands. However, in light of Ethereum’s mooning gas charges, other chains, such as Solana (SOL), come and take their share of the NFT market.
Checking the blockchain network an NFT project is running on will help you understand how secure your NFT will be in the long run.
For an established blockchain like Ethereum, it’s easy to see why collectors believe their artwork will be there “forever,” given the chain’s relatively strong track record of stability and continuity.
Conversely, some emerging blockchains may be more affordable for NFT creators, but only in the short term. If a blockchain does not survive, the NFTs stored on it will likely end up being worthless.
Before making an NFT purchase, research the blockchain it operates on and decide if you think the chain will still be around 50 years from now.
Intellectual protection rights
Make sure that an NFT brand owns the intellectual rights to what it sells.
If an anonymous NFT creator uses images of a celebrity or major brand, there is a good chance that the creator is violating intellectual property rights. In this case, the owner of the intellectual property can sue the creator, and the value of TVN will subsequently plummet.
Stay away from NFT projects that contain what looks like someone else’s intellectual property.
When celebrities or brands put out NFTs, you hear about it. So if someone sells “TVN Art”With pictures of Kim Kardashian on it, you might want to keep it clear.
Gifts or airdrops
Arguably the easiest way to tell that an NFT project is a fraud is if it is offered to you “for free” or if you are asked to enter a “contest” or “contest”.
In most cases, these are attempts to get your crypto wallet credentials to steal your existing NFTs as well as any other digital currency or token you hold there.
We hope this checklist helps you avoid NFT scams and choose cool crypto artwork and collectibles for your collection.
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