How to research Non-Fungible Tokens, NFTs metrics (and some tips on finding successful projects)

The Non-Fungible Token, or NFT for short, was created with the development and deployment of the ERC-721 token standard for the Ethereum decentralised application (DApp) platform.

This was a very big deal.

What happened next was one of the most significant innovations in blockchain technology. In a relatively short span of time, the community saw the ushering and rapid rise of the NFT era.

Fun Fact: One of the first NFT projects created on Ethereum is CryptoKitties.

Here’s a link to read our Beginner’s Guide to Non-Fungible Tokens where we do an in-depth case study of the CryptoKitties 👉

Decoding NFTs: Understanding the essential research metrics

Let's break down the metrics into four key areas:

1. Holders (or hodlers)

2. Distribution of supply by holders

3. Availability of Supply

4. Wallet Activity

But, what does this mean?

Here’s a link to check out a case study of the Moonbirds NFT collection (with a side of on-chain analysis for crypto) 👉

Well, a rocket's velocity needs to increase to achieve liftoff.

Similarly, the NFT projects should see a rise in the number of holders over time.

The distribution of supply amongst NFT holders refers to the percentage of holders who hold a single token versus those who hold multiple.

Die-hard followers are few and far between, but it is still important to have a healthy balance with new followers joining too.

Did you watch our newest trading video? Get the #FreeAlpha research while it’s HOT and see the live technical analysis in last night’s workshop (Find your favourite charts in the chapters included) 👉

The third key area to note is the availability of the token’s supply.

Supply availability is simply the number of tokens that are listed for sale as a percentage of the total supply. In theory, an imbalance between supply and demand could result in an effect on prices—Down or Up!

Read a study that analyses NFTs and supply in more granular detail. Featuring the Bored Ape Yacht Club and its official token ApeCoin, $APE 👉

And, don't forget to go Whale Watching! 👀

Photo by Lee Kelai on Unsplash

No, not these majestic sea giants.

We're talking about the BIG investors who have significant amounts of capital to invest in the project or those who currently hold large positions.

Money buys influence. In the markets, a hefty trading purse commands a lot of sway over capital flows.

Blockchain technology is cultivating a swathe of innovation that spans so many new and exciting applications. This is due in part to the technology’s unique core characteristics, which broadly speaking can be qualities such as:

• Decentralisation

• Security

• Scalability

Although there is no doubt that fierce debates take place amongst market participants across the spectrum, having complete transparency of network transactions may favourably balance the scales for ordinary traders and investors.

To dodgy brokers and bottom-of-the-barrel cowboys who manipulate their order books to the detriment of their clients, this might be perceived as a bad thing indeed.

Transparency can be a real benefit of the technology.

Being aware of your surroundings is crucial. For the first time, power looks to be shifting away from the bigwig institutions and making its way back to the common people.

This is the reason why it pays to take some time and learn how to analyse on-chain metrics. The resources are almost endless and this space is growing at an amazing pace.

Let’s kit up and explore the exciting digital asset space together!

Feel free to save this handy guide and fun visuals to save aside for later 🚀

Want to read something a bit more advanced? Click here to read a write up we did about using Merkel Trees for NFT Whitelists for a—really deep—deep dive 👉

See you again for the next update.

- q

Read Qluster Research in the new Substack app

Now available for iOS

Get the app

We’re on a mission to a Brand New World.

It’s a place where people come to share in the wonderful gifts of trading. Where individuals come to qluster their knowledge, united by a shared love for learning.

This is Trading Made Social. Help us on our mission by sharing the gift of Trading Made Social to new explorers.

😂😂😂

Join our Facebook group and connect with likeminded traders 🚀

Qluster Research Facebook Community

Like and Follow our Facebook page for activity updates 📣

Like & Follow our Facebook Page

Connect with us on LinkedIn for future updates 🤝

Connect with us on LinkedIn

The information on this website is for general information purposes only. It is not intended as legal, financial and/or investment advice and should not be construed and/or relied on as such. Before making any commitment of a legal and/or financial nature you should seek advice from a qualified and registered legal practitioner and/or financial and/or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal and/or financial product. Qluster does not recommend and/or endorse products and does not receive remuneration based upon investment and/or other decisions