6 things to evaluate before buying an NFT

The importance that NFTs have gained in the world and gradually in more and more industries is already known. Especially during the last few months, which NFTs have shown to have the ability to apply in various aspects of real life.

Utility NFTs are just one link in a wide range of qualities that Non-Fungible tokens offer in more and more diverse applications. Not only in the marketing industry, its application in more and more sectors means that something that on many occasions has been considered a speculative bubble, has in reality qualities that make its value go far beyond that of a simple digital piece of collection.

What to take into account if you want to be an NFT collector?

Although many times the value of an NFT can be supported by a good percentage of speculation, there are common qualities that every NFT collector will rely on to invest.

1.- Utility:

NFT Utility is a subjective value and depends on the ability to grant value in both the physical and digital world, as both worlds get closer it is easier to value an NFT based on its utility.

Despite the fact that there are many that have managed to be listed among the best selling NFTs without expressing a profit. The trend is that little by little a digital asset without any use case will eventually be in little demand.

Currently the utility of an NFT can range from Gamified NFTs, for access to events, and even as garments for loans.

2.- Rarity:

The rarity of an NFT is another highly valued quality when evaluating the value of an NFT. It can depend on being created by some reputable artist, or being tokenized real-life assets.

Obviously, the NFTs with higher demand have consequently higher value, this determines their rarity. A very useful tool to help collectors assess the rarity of an NFT are third-party platforms such as Rarity Tools, which help to statistically evaluate the true rarity of an NFT.

3.- Community size:

The size of the community is always a key factor in assessing the importance of an NFT; when the community of a collection is large enough, it can be considered to be well-valued pieces.

However, the volume of your community on the different platforms is not everything, it is also important to contrast this with the amount of NFT available in secondary markets. The high availability of NFT combined with a low supply may suggest that despite the size of your community, supply exceeds demand.

4.- Potential:

The potential of an NFT is the ability that we can evaluate a piece to be traded based on its rarity, the size of its community and its eventual profits.

This combination of qualities can be summed up in the level of relevance that an NFT can acquire over time. Continuing community activity over time acts accordingly to strengthen the value of an NFT.

5.- Origin:

Very often, a successful NFT is associated with its creator and it is on the basis of this relationship that many investors can assess the positioning potential of an NFT piece or collection.

Investigating the provenance of an NFT collection will always refer to its creator, and it depends largely on his qualities and reputation, whether his work is considered valuable.

6.- Personal taste:

Undoubtedly, the acquisition of an NFT has in addition to the quantitative attributes, elements of subjective and personal evaluation that determine without more than one’s own appreciation, the value of an NFT to be part of a collection.

Although there are no golden rules that an NFT fan should strictly rely on, these criteria serve as a standard reference for not making the best decision. Regardless of its qualities in terms of potential, origin, rarity and usefulness, an nft that appears to be of little value can be invaluable to the right collector.