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How to avoid failed NFT projects

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NFTs have recently attracted a lot of attention and have evolved into a Web3 phenomenon that has attracted worldwide interest. While NFT collections, such as Bored Ape Yacht Club and Moonbirds, are extremely valuable, countless other collections have fallen by the wayside and are no longer relevant. If you’re wondering why some NFTs fail at launch while others make a lot of money, keep reading.

What is a failed NFT project?

An NFT project is considered to have failed if its initial floor price falls by more than sixty percent and its trading volume declines over time. Within the first six months after launch, the floor price of an unsuccessful NFT project can drop by 90 percent or more. Also, if an NFT project fails, the number of holders will likewise decrease; However, there is also a possibility that the number of holders will increase due to lower floor prices. However, the project still failed.

How to avoid failed NFT projects

A few things to look out for when considering investing in an NFT project:

-Exclusivity

NFTs like CryptoPunk and Crossroads by Beeple have shown that exclusivity sells. There is a lot of theft in the NFT space. Copy-paste jobs that use other people’s ideas, art styles, utilities, marketing plans, and merchandise. If NFT steals other efforts in whole or in part, this should raise a red flag. While not entirely a bad thing, copying almost always indicates a lack of creativity and market direction.

The result is that in the event of a bearish market, manufacturers will be at a loss for solutions due to a lack of pre-existing vision. The rarity and lack of uniqueness in a project where thousands of competing NFT projects are doing the same, will make it fade into the shadows of the NFT trash market. Supporting movements rarely stand up and do not make for a profitable project.

Community is the most important factor in determining whether a project will succeed once it is launched. Maintaining an active and active community of supporters is one of the most significant things that contributes to the success of a project. A project cannot succeed without engagement. NFT projects develop communities on various platforms including Discord and Telegram.

Be sure to check out the number of people using the Discord channel to collect NFTs. It is either going to fail or has already failed if it has a very small community size Or if the community is average and the project is not interesting enough to hold the attention of the audience, then the NFT project will probably fail.

Investigate for anger pull

Rage Pool is arguably the worst way for an NFT to fail because there is almost no way to prepare against it. A rage pull occurs when the owner of an NFT project liquidates the NFT project in order to siphon funds. The main reason this happens is when NFT creators and artists decide to stop creating new content causing NFTs to lose their value. As a result investors will lose all their money in a very short period of time.

Carrying a blanket pull carries great risk to the owner’s reputation because it causes a loss in the collector’s investment. A good example is Pixlemon’s Almost Rage Tan. The best way to avoid this is to carefully investigate a project’s team members for previous shady dealings before investing. Also, avoid projects with anonymous creators.

– Teams and qualifications

A poorly managed and incompetent team is a primary reason why most NFT projects fail If the NFT project doesn’t have a team of highly trained experts working on it, don’t invest. When the right team of highly trained experts is assembled for a project, the project has a much better chance of success.

-Marketing

NFT projects also fail because insufficient attention is paid to marketing. There are many potential buyers and collectors in the market, so marketing has to be intensive. Check how many different marketing platforms they are employing, as well as how many customers they have already acquired

Conclusion

Before you put money into NFT ventures, you should first investigate thoroughly from every critical angle. Before you get involved in any NFT enterprise, you should make sure you have a means and know how much damage you can easily stomach. This way you can be more confident and better prepared.



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