A variety of NFT art has been produced by various projects in recent years. Many beginners are aware of the term NFT art and thinking about purchasing it, but are hesitant to do so because they do not know the criteria.
- What should I purchase based on…?
- What if I purchase it but the price goes down…?
In this article, I hope to help those who are facing such problems when purchasing NFT art.
I will now explain them below.
By the way, you need Ethereum (ETH) to purchase NFT art.
If you don’t already own Ethereum, you should initially purchase Ethereum (ETH) on a crypto asset exchange. The recommend exchange is “BYBIT“.
The last chapter of this article will also explain why.
You can also create an account at the link below.
Secure with strong security（Open a Free Account）
You can then send the Ethereum (ETH) you purchased on the exchange to your MetaMask wallet and connect your wallet to OpenSea to purchase.
● How to purchase NFT art
- Open an account with BYBIT
- Prepare your MetaMask wallet
- Purchase Ethereum (ETH)
- Send Ethereum (ETH) to your MetaMask wallet
- Connect OpenSea and MetaMask wallet
For more information on how to create a MetaMask wallet, please refer to this article.
Understanding the nature of NFT art
As explained in this article, at the moment it is commonly used as a PFP (Profile Picture). It is mainly used as a tool to express a kind of identity as a profile icon on the SNS you are using.
Further evolving from its role as a PFP
However, the role of NFT art, which is concentrated solely on its use as a PFP (Profiles Picture) is coming to an end. And it is fair to say that moving away from PFP is the next theme for NFT art.
Specifically, as explained in this article, we are entering a phase where it is important to know what you can do with the NFT art that you own.
For example…
⇒ Role like a ‘membership’
- The right to participate in the community of the related project
- The right to purchase other NFT artworks derived from the project
- Participation in online salons hosted by the founders
⇒ Role like a ‘shares’
- Gain access to the governance tokens of the relevant project (dividends)
- Get fan art created by the project (preferential item)
⇒ Role like a ‘real estate’
- Borrow ETH (Ethereum) and other funds using NFT art held as collateral
⇒ Role like a ‘crowdfunding’
- By owning NFT Art, you can contribute funds to support the project
- The NFT Art is a project that you can contribute to and support by holding NFT Art
The various roles that can be gained by owning the product have already been realised. When making a purchase, it would be a good idea to keep the above points in mind and decide what is necessary for you at the moment.
For example, if there is already a community you want to join and participate in a project run by that community, you can try to purchase NFT art related to that community.
Alternatively, if you are interested in a BCG (blockchain game) beyond art and want to actually play the game, you can try purchasing NFT, which are items that can be used in the game.
This is a piece from the ‘Love Addicted Girls (LAG)’ collection, and if you own NFT art from this collection, you can…
get fan art like this !
This is very close to the ‘special offers’ that can be obtained by holding shares.
This is the criteria for making a purchase
This section focuses on what points to look out for when purchasing to avoid the risk of a fall in value.
In particular, as many factors are closely interrelated in shaping the price fluctuations of NFT art, the explanations in this section will not remove all the risks of price declines. I will summarise and delve into the key points that need to be kept in mind as a minimum.
Don’t purchase this type of NFT art
⇒ Collection of imitations of other projects
A simple adaptation of another popular NFT art concept is out. This is because there is no originality or uniqueness in the work. In the early days, there may have been room for acceptance, but as the market matures, works without originality will be weeded out.
I have also purchased art that is a complete rip-off of the concept of a popular NFT art project, but its price is now about one-tenth of the original purchase price. It is because of this bitter experience that you can see what I am telling you here.
Incidentally, this is NFT art. It’s pretty obvious which NFT art is a total rip-off !
Everyone who reads this article is advised not to imitate it.
⇒ Collection where the community has not been nurtured
Another major factor in the decision to purchase NFT art is whether there is a thriving community. For generative NFT art with large collections, it is important that there is a large number of specific fans who have a liking for the project. The more fans you can attract, the greater the demand, which naturally makes it easier to maintain price formation in the market without price erosion.
At present, the leading collection in Japan is CryptoNinja Partners (CNP), which was born out of NinjaDAO. At the time of writing (mid-June 2022), the NinjaDAO community has approximately 31,000 participants, making it one of the largest communities in Japan. It is also great that new projects are being created one after another, with many participants exchanging ideas and opinions.
Conversely, there are many collections that focus only on the initial sales and are never heard from again. In such cases, prices are based on price, so from a medium- to long-term perspective, there is a tendency for prices to fall as there is no longer support for buying.
Initial sales are important because it is a project, but the key point is how to broaden and expand the secondary and tertiary distribution of the collection afterwards, and how to attract fans of the collection. In this respect, the existence of an active community is very important in terms of price formation.
⇒ Collection with high initial sales price
If the price of initial sales (primary sales) is somewhat larger, this means that there is more room for lower prices if supply and demand deteriorate. In particular, short-term traders will be tempted to enter the market, which will lead to a faster price collapse, so care should be taken.
Conversely, if the original offer price is inexpensive, even if prices collapse from there, from the purchaser’s point of view, the scope for accepting the risk of a fall is wider, so the cooling of market sentiment will not be as great. The tendency to judge that “the original price was low, so this level of price decline can’t be helped” should increase.
A collection that has successfully incorporated this into its sales strategy is CryptoNinja Partners (CNP), which I introduced earlier. The primary sales offer price was 0.001 ETH, so even if the price collapse had occurred in the first place, it would have been negligible. And the floor price on OpenSea at the time of writing this article (mid-June 2022) is 0.6 ETH, which means that the price has already increased 600 times since the primary sale.
This is one good example of how a well-developed community and a strong fan-base has added so much value, not to mention the fact that the initial sales price was low.
A sister collection, CNP Jobs (CNPJ), which incorporates a similar sales strategy, has also become a successful project.
The temporary sale was 0.001 ETH when released on 15 July 2022, but the floor price on OpenSea is roughly 0.3 ETH at this point, approximately two months after the sale, resulting in a price increase of almost 300 times from the initial sale.
Summary of this issue
So, let’s review again the essential points to minimise the risk of price decline when purchasing NFT art.
Review of important points of purchase
- The collection itself must have originality and uniqueness
- A well-developed ‘community’ where collections are created
- Extremely low initial sales price
There may be other items that could be mentioned as essential points, but I have focused on the three points above.
NFT itself is still a nascent industry.And I feel there is no doubt that this NFT industry is a growing with tremendous potential. If you have not yet purchased NFT art, I highly recommend that you do so, using this article as a guide.
Open an account with an exchange
To get the ETH needed to purchase NFT art on OpenSea, I recommend “BYBIT” as the main exchange.
Secure with strong security（Open a Free Account）
There are multiple reasons for this, but it is largely due to the following three points.
- No transaction fees on all cash currencies ※ Starting from Sep 6 2022, 10 AM UTC
- No fees for sending to other exchanges
- Top class server strength and high security
As mentioned above, no transaction fees for buying, selling, sending and withdrawing money, the higher the volume of transactions, the more attractive the lower commissions become. In addition, the operability of the application is outstanding, so the point is that it can be easily operated even by beginners in particular.
It depends on what you value in terms of service, but if you want to keep fees and other costs as low as possible, “BYBIT” is an exchange that offers high performance services compared to others.
That’s all for this issue.
Thank you for reading this far.
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