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  • The phrase Do your own research (DYOR) is often mentioned in the context of the importance of responsible investing.

  • To avoid fraudulent projects and unsuccessful investments, it is recommended to carefully study the key characteristics of the project.

  • There are many ways to evaluate an NFT project, from studying its roadmap to analyzing the community.

Here are seven ways to do due diligence on NFT projects.

From CR7 NFTs to gaming NFTs, you can purchase a variety of non-fungible tokens (NFTs) on the Binance NFT Marketplace. But before you take any risks, it's good to do some deep research to avoid NFT scams, bad investments, or buying copyrighted art.

But what does doing your own research (DYOR) mean? There's no one-size-fits-all approach, but here are seven things to consider when evaluating an NFT project.

Market trend

If you've decided on a specific NFT, research the past sales performance of that asset or collection. Has its value increased or decreased? Does it look overbought or oversold? Is there still demand for it? Are you planning a long-term investment or a short-term deal?

You can also analyze market trends on a larger scale to understand what types of NFTs are performing well in the current market. Gaming and music NFTs, utility-NFTs (such as event tickets), art collectibles, and domain name NFTs are just some of the types of non-fungible tokens.

On the Binance NFT platform, you can get a better understanding of the dynamics in the NFT world. Check out the Binance NFT Rankings page for current non-fungible token rankings, recent transactions, and more.

For in-depth analysis, click on the NFT collection page to view historical price data and charts. You can also go to the NFT details page to view the price history of a specific token.

NFT project

Quality

Find out how the project team interacts with the community and evaluate the quality of the website, social media pages and marketing materials. Are they interesting? Are there any errors in them? Poor quality marketing materials can say a lot about the dedication and competence of the project team. While this is not always the case, a similar level of quality can be expected from its future designs.

Road map

NFT projects usually offer a roadmap with details about features and functionality, updates, and development plans. To track changes in the roadmap, it makes sense to subscribe to the project page on Discord or Facebook. But keep in mind that the team of any project can easily create an interesting roadmap and make promises. It is important to monitor whether it fulfills its goals and delivers what it claims, and ideally the quality of products and functions should be high.

Questions you can use to evaluate your roadmap include:

  • Target. Does the roadmap help realize the project's vision and mission?

  • Utility. What are the current and future use cases for NFTs?

  • Users. How is the project going to increase its user base?

  • Partnership. Is there any collaboration planned, and if so, with whom?

  • Results. What has already been implemented within the project? How good are these products?

Team

It is always useful to know who is behind the project that interests you. For some NFT traders, it is important that the team has the proper experience in the world of cryptocurrencies. Having a professional team with a proven track record leading the project is usually a good start. You can check out each founder's personal LinkedIn, Twitter, or Instagram page to gauge their experience. And while this isn't always a recipe for success, some NFT collectors say that involving a famous artist or pop icon can also help draw attention to the project.

If you're interested in NFTs from established creators like Alan Walker and José Delbo, participate in premium launches on the Binance NFT platform. To stay up to date with the latest news, join the Binance NFT community on Telegram or follow the Binance NFT page on Twitter, Instagram and Discord.

The Binance NFT marketplace also features many popular NFT collections such as Bored Ape Yacht Club, Wonderpals, and Cool Cats NFTs.

Artist

Sometimes the value or popularity of an NFT as a piece of digital art can be directly related to its creator. Typically, artists with a strong fan base, reputation, or sales history have a better chance of success in the NFT world. You can even check the artist's portfolio to see if he has other interesting work and if the new project fits with his style.

You can also look at the creator's Binance NFT profile to evaluate the quality of the NFT collections they've created, see the NFTs they've favorited, see their follower count, and find their social media pages.

If you enjoy discovering new artists and prefer to purchase NFTs directly from their creators' websites, you may find it difficult to gauge the prospects of a particular artist. However, beware of fake NFT collections in any case.

Art

While grading art is always subjective, it's helpful to know whether an NFT uses copyrighted or trademarked materials. Violating intellectual property rights is not only unethical, but also poses the risk of future copyright issues, which could affect the prices of a given non-fungible token or NFT collection.

Community

A large and active community is one sign that a project is real. However, it should be remembered that some scammers artificially inflate the number of subscribers in order to present themselves in a more favorable light. There have been many cases where bots were used for money to increase the number of users in Twitter, Instagram and even Discord communities.

Check the comments and likes left by subscribers. If community activity is low and comments are suspiciously similar or repetitive, chances are the followers are bots. You can also try to check the reality of followers by looking at their profiles and recent activity.

Communication

If you follow the project page on Discord, Twitter, Facebook, LinkedIn, Instagram or other social networks, keep an eye on how the project team interacts with the community. Regularly posting updates and relevant information for NFT owners is a good sign. Other signs of a reliable project include quality customer service and prompt responses to investors.

Rights and utility

What rights do you get when purchasing the NFT you're interested in (if any)? Will you be able to use the art you purchased and print it on T-shirts or mugs, for example? If you have an entrepreneurial mindset, you can use your ownership rights as a source of additional income by selling products featuring your NFT.

It is also important to evaluate the usefulness of the NFT: for example, whether it can be used as an in-game asset, whether it entitles its owners to exclusive membership on certain platforms or communities, or participation in upcoming airdrops for its owners.

Conclusion

There is no single solution for doing your own research on NFT projects: some people prefer to analyze the key features of the project, while others check information about the artist and subscribers. Whichever option you choose, be sure to trade responsibly and conduct thorough research before taking on financial risks.

Ready to dive into the world of NFTs? Create an account on Binance! And don't forget: do your own research.

Additional Information

  • What is NFT

  • How to start participating in NFT airdrops and do it safely

  • Four Easy Steps to Buy NFTs

  • Guide to Buying NFTs

  • Why and How to Do Your Own Research (DYOR) Before Investing in Cryptocurrencies

  • How to spot a fake NFT collection