# NFTs 101 - Introduction The most comprehensive beginner guide to start your NFT journey Hi there, welcome to NFTs 101 by Kyzzen and congratulations on taking your first step into the world of NFTs! The NFT space is new and exciting, it is rapidly evolving with many new applications being innovated everyday. It is so big, it pretty much exists in its own universe. And there is so much to learn about. The applications are vast, such as art, gaming, music, DAOs and events, and more are appearing everyday. The utilities are broad and complex, like staking, lending, raffles, and fractionalization. There are many useful tools that can help you in your NFT journey, whether its data, analytics, bots or trading tools. Its important to stay updated on upcoming launches, latest NFT news, and important NFT events. There are scams and rugs happening everyday, which can be incredibly stressful to think about and its crucial to learn how to stay safe at all times. Information in the space is so fragmented, while the learning curve is steep for newcomers and its challenging to keep up. That is why we wrote this guide, to help newcomers explore the space, learn about the useful applications of NFT technology, how to trade safely, and protect their NFTs and assets throughout their journey. Welcome to NFTs 101. # Getting started with NFTs ## **What is an NFT?** NFTs (non-fungible tokens) are digital assets that cannot be replaced by other identical digital assets and is a new application of blockchain technology that allows for the verification of ownership and authenticity of a particular asset. In technical terms, they are a form of cryptographic assets located on a blockchain – each token is recorded on a public digital ledger or list of some sort. To learn more, please read our blog article, "[What is an NFT? Improve Your Knowledge of Non-Fungible Tokens](https://digitaleyes.market/buyer-seller-guides/what-is-an-nft)" ## **What types of NFTs are there?** At a high level, NFTs can be categorized by their mediums and uses, including but not limited to art, music, game characters and items, virtual lands in metaverses, and domains. The NFT concept is so new that more and more types continue to be innovated, such as event tickets and POAP (Proof Of Attendance Protocol). NFTs can also belong to a collection, or stand alone as a 1/1 piece. There are four main types of NFTs that are popularly traded. The first is Profile Picture collections, often called “PFPs”, where each NFT can serve as your online identity, identifying you as a part of a community of holders. These projects often aspire to build a brand behind the artwork or community, and there can be many perks of being a part of the exclusive community, such as discussing “alpha”, taking part in events (online and real-world), and even just making friends and connections. For me, I use my monke from the Solana Monkey Business collection (SMB) as my online profile picture, which people mostly use to identify me. I enjoy being a part of the DAO (MonkeDAO), taking part in meaningful conversations and joining their events. We’ll talk more about DAOs in future. The second type is gaming or metaverse NFT collections, which can be in a number of forms, such as metaverse or game passes which gives exclusive access, character NFTs, land or rooms, (usually with varying sizes, types, locations, and use cases), equipment, skins, vehicles, and more. A metaverse I’ve been checking out is called Yakuverse. I can buy different types of apartments under “Capsule X” collection to chill with friends, play games and more. I can purchase a “Yaku X” NFT to have a customizable playable avatar in the Yakuverse. They also have a “Yaku Engineering ONI-S01” collection where I can get customizable motorcycles to use in the Yakuverse. The third type is utility NFTs, which gives you access to project-specific tools or rewards such as tokens and passive income. For instance, “RadRugs” gives holders access to their exclusive NFT security platform. “Shi Guardians” gives access to SolanaFloor PRO which has premium NFT analytics. “Sentries” provides enhanced staking rewards to their PFP holders. The last type is 1/1 Artwork, usually by reputable artists such as John Le and Lisanna Haack. These are typically collected just for the artwork, to be a part of one’s art collection. Of course, there are more types. Music NFTs seem to be on the horizon with a lot of innovation happening, and I look forward to seeing them more in the space. OG collections are the earliest to launch on the blockchain, such as the first on-chain generative NFTs on Solana called “Solarians” - animated pixel robots that will soon have 3D counterparts that can be integrated into metaverses. (Disclaimer: I used to run the Solarians team briefly, and am currently in the process of handing the project over to the DAO.) “Frakt” is also an OG as the first generative art collection on Solana, and gives holders numerous utilities such as discounted loans, raffle tickets, and more. There are certainly a lot more that are worth checking out. ## **What's so great about NFTs?** Firstly, they allow **proof of ownership** and **the ability to authenticate assets**. With an NFT, you can verify details such as who the owner is, who the creator was, when the token was created, and so much more. Imagine if Eminem sold NFTs for his latest album - we’d be able to verify that he was the creator and the exact time that they were created. If I bought one of them, I’d be able to prove that I own it. Being able to clearly prove that an NFT is authentic and that I own it is empowering. Secondly, **transferability** and **the ease for holders to trade these assets**. In most games, players would amass an insane collection of in-game items and when they stopped playing, those items would lose all their value. If they were NFTs, I could easily trade them on a marketplace for profits or store them in a cryptocurrency wallet forever. Another amazing benefit of NFTs is the **empowerment of artists and creators to monetize their work and collect royalties from secondary sales in perpetuity**. It is extremely easy today to mint a piece of digital art into an NFT, and list them for sale on an NFT marketplace such as Kyzzen. Every NFT can have references to a royalty percentage and the creator’s wallet address, so that a fixed percentage of every future secondary sale can be automatically paid to the original creator(s). This is incredibly powerful. NFTs have their clear advantages and use-cases. ## Always DYOR before you trade DYOR simply means "Do Your Own Research". This term is a popular phrase that aims to encourage newcomers to properly research and understand the asset(s) they’re investing in, as well as the risks involved in their actions. Shilling is a common practice in the NFT space where people, especially influencers, hype NFT collections to make their own assets or those of others more valuable, and hence you should never simply accept random information from external sources (e.g. influencers, friends, videos, etc.) as financial advice and the sole reason for making trading decisions - more importantly, your need to invest time and effort into properly researching the NFT collection, and arrive at your own conclusions. # Solana ## About Solana: Solana is a blockchain platform built by Solana Labs (based in San Francisco), and currently run by Solana Foundation (based in Geneva). It was proposed by Anatoly Yakovenko (a former executive at Qualcomm) in a white paper published in Nov 2017, and launched in Mar 2020. It uses a "proof-of-history" (PoH) consensus mechanism, which uses timestamps to define the next block in Solana's chain. It can theoretically process over 710,000 tps (transactions per second) without any scaling solutions needed. For the sake of brevity, we will not go into too much techincal details, but here are some additional reading materials if you're interested: * * * At the time of writing (26 Feb 2023), Solana is the second-largest blockchain for NFTs by volume according to CryptoSlam! with >$90mil in 30-day volume.
## Key Players in Solana NFTs: * Blockchain: [Solana](https://solana.com/) * Infrastructures: [Metaplex](https://www.metaplex.com/) * Marketplaces: Kyzzen, [Magic Eden](https://magiceden.io/), [Hyperspace](https://hyperspace.xyz/), [Hadeswap](https://www.hadeswap.com/) * Launchpads: Kyzzen, [Magic Eden](https://magiceden.io/), [LaunchMyNFT](https://www.launchmynft.io/) * Wallets: [Phantom](https://phantom.app/), [Solflare](https://solflare.com/), [Backpack](https://www.backpack.app/) (more about wallets in the next section) * Analytics: [SolanaFloor](https://solanafloor.com/), [Hello Moon](https://www.hellomoon.io/developers), [NFTInspect](https://www.nftinspect.xyz/) * Rarity Ranking: [MoonRank](https://moonrank.app/), [HowRare](https://howrare.is/) * NFT Lending: [Frakt](https://frakt.xyz/), [Sharky](https://sharky.fi/), [Citrus (Famous Fox Federation)](https://citrus.famousfoxes.com/) * NFT Raffles: [Famous Fox Federation](https://rafffle.famousfoxes.com/) * Messaging/Notifications: [Notifi](https://notifi.network/), [Dialect](https://www.dialect.to/) # Wallet & Safety A crypto wallet stores your public key (your wallet address), secures and hides your private key (the password that gives you access to your wallet and its assets), and allows you to store, send, and receive cryptocurrencies (e.g. Bitcoin, Ethereum, Solana, etc.). Just like with any form of currency or asset, it is of the utmost importance to always ensure the safety and security of your wallets. With an increasing number of hacks and scams in the space, it is crucial for all of us to understand the different types of wallets available, the risks associated with them, and how to secure them properly and trade safely. This article will provide an in-depth look at the types of wallets, as well as tips on how to keep your wallets and private keys safe for protection against cyber threats.
# Types of Wallets There are two main types of wallets, custodial and noncustodial. The simple difference is custodial wallets are held by third-parties that store your keys (like centralized exchanges), while you secure your own keys for noncustodial wallets. Having a custodial wallet is like having your money in a bank account that you can access regularly but don’t have full control of, while a custodial wallet is like having your money in a wallet in your pocket - you can fully control it but it is all up to you to protect it. The common advice here is to always use noncustodial wallets for holding your assets, while custodial wallets can sometimes be used for trading and transferring of assets when needed. For noncustodial wallets, there are two main types - hot and cold. A hot wallet (aka software wallet) is connected to the internet. While they can be more convenient to use as they allow for easy access and quick transactions, they are also more vulnerable to hacking and other cyber threats. Examples of hot wallets include software wallets on a computer or mobile device and web-based wallets on a cryptocurrency exchange. On the other hand, cold wallets (aka hardware wallets) are not connected to the internet and are hence considered more secure. These wallets are offline and are not accessible to hackers or other malicious actors. Cold wallets include hardware wallets and paper wallets. Hardware wallets are physical devices that store your private keys offline, such as a USB drive or a portable device. Paper wallets are literally a printout of your public and private keys, which can be stored in a secure location. In general, it is recommended to store the majority of your assets in a cold wallet, and only keep a small amount in a hot wallet for easy access and quick transactions. Each type of wallets has its own advantages and drawbacks, and it's best to diversify and use different types of wallets for different purposes and use cases. ## Noncustodial Hot Wallets (Solana):
WALLET NAMEINSTALLATION LINKSETUP GUIDE
Phantomhttps://phantom.app/ Link
Solflarehttps://solflare.com/ Link
Slopehttps://slope.finance/ Link
Exodushttps://www.exodus.com/ Link
Coinbasehttps://www.coinbase.com/walletLink
Atomic wallethttps://atomicwallet.io/solana-walletLink
## **Noncustodial Cold Wallets:**
WALLET NAMEWEBSITE
Ledgerhttps://www.ledger.com/
Trezorhttps://trezor.io/
Ellipalhttps://www.ellipal.com/
Keystonehttps://keyst.one/
**To read more about Crypto Wallets:** # Wallet Safety ## **Recommended practices to keep your wallets & assets safe:** * Never share your private keys with anyone else, even with close friends and family, or people claiming to be a representative of a legitimate organization. Write it down on a piece of paper and store them in the safest place you know that you can still easily access. You may wish to have 2 copies in 2 different locations, just in case you lose one copy. * Setup multiple wallets for different uses: * Cold Wallet for Storage - keep all valuable assets for long-term storage here, as well as any assets that you do not plan to use, sell or transfer for the next short period of time. * Hot Wallet for Trading - use this wallet to buy and sell NFTs on reputable marketplaces. Once you've bought an NFT, be sure to send it to the cold wallet unless you intend to sell it very soon. * Hot Wallet for Minting - use this wallet to participate in new launches, which can be extremely risky for new beginners. For example, you may receive private messages or notice in social media (Discord, Twitter, Telegram, etc.) announcements that there is a pre-sale link, or a whitelist opportunity, or some special thing you need to do to be able to mint. Most (if not all) of these are scams that can drain your wallet of all your assets. So remember to only fund this wallet with what you need to be able to mint, and only look at official announcements in the project's Discord or Twitter. There is still a possibility that these turn out to be scams (e.g. scam founders or teammates, the social media account has been hacked, etc.), but at least a lot of risk has been mitigated. * Setup and maintain as many wallets as you need to spread your risk enough to feel safe. * Connect ONLY to websites that are highly reputable or that you know would be safe. After exiting those websites, remember to revoke access to those websites within your wallet (often under "Trusted Apps" or "Connected Sites"). * Never respond to any unsolicited private messages from unknown parties on any form of social media (email, Twitter, Discord, Telegram, etc.). Do NOT click on any links or download any attachments. * If you need to setup any passwords for anything, make sure they are: * Strong - combination of letters, numbers and special characters, and at least 12 characters long * Unique - a different password for each account * Not easily guessable - do not use your name, date of birth, country, etc. * Has 2FA enabled where possible - an additional layer of verification required, e.g. a biometric scan, an OTP sent to your phone, etc. * Ensure everything are always updated (software wallet, hardware wallet, operating system, browser, etc.), as they typically include security patches and new features that can help protect your assets from known vulnerabilities and threats. Use only reputable and well-maintained software. # Evaluating NFT Projects With a large number of new launches every week, NFT buyers are spoilt for choice these days as to what projects they can buy into (perhaps sometimes even overwhelmed by choices), and it can be easy to ape into projects that you’ve received “alpha” about or seem to be gaining a lot of traction. In order to wrap one’s head around these projects and with rug pulls and scams seeming to be a regular occurrence these days, it is critical that buyers arm themselves with knowledge on ways to evaluate NFT projects and, perhaps more importantly, learn about their own preferences and formulate their own strategies - all of which should ideally lead to wiser buying decisions in the long run. Different people have different strategies; some are generally long-term holders of the NFTs that they purchase, some could be “flippers” who are looking for a quick profit, and others could have different motivations. Individuals within each group could also have different preferences. For example, let’s say I am generally a long-term holder and a big fan of metaverses - I love to get in on projects that have grand visions with a credible, hardworking team in place that is able to secure partnerships with big players in the space. My friend could also be a typical long-term holder, but instead be a big fan of PFP projects and hence focuses a lot more on quality and originality of artwork, as well as community engagement. Therefore, before anything else it is very important that you know yourself and your own preferences, and what your motivation is for buying NFTs (whether in general or for specific projects). Do you want to hold an NFT to be a part of an amazing community of holders and build it together? Are you looking to buy projects that support new upcoming artists? Are you only interested in making money? All these would likely significantly affect the way that you would approach the evaluation of specific NFT projects. Hence, this is not a definitive guide to evaluating all NFT projects for everyone. To summarize the above points, the way that an individual evaluates an NFT project would ultimately depend on two primary considerations: * The individual’s strategy and preferences, and * The NFT project’s key value propositions and characteristics. In this guide, we go through a general framework that can guide newcomers in assessing aspects of an NFT project and help them form their own evaluation process. To prevent this from becoming an extremely long read, we will focus solely on general aspects of most projects as well as evaluating project quality, and will not go into detail about niche projects, trading-related analytics (e.g. supply, volume, floor price trend, number of holders, etc.), or specific strategies heading into new launches or trading on secondary markets. # Key Factors There are 5 key factors that NFT traders can generally consider when evaluating NFT projects: 1. Artwork 2. Team (Track Record/Reputation/Credentials) 3. Utility/Roadmap 4. Marketing 5. Community Development # Artwork The first aspect of an NFT project that we generally look at is usually the artwork, as this is the first thing that is usually in front of us or readily available. As we all know, art is extremely subjective, but some questions that you can ask yourself are: * Does the art look like it was created by a professional artist? * Does it look low-effort or low quality? * Does it resonate with you? The importance of these questions can differ from person to person, not just whether the person has a strong opinion about art but also if they care much about artwork in an NFT project. Another factor to consider regarding artwork is whether it looks like a derivative of another project or art collection, or potentially even a copy mint (a direct copy of another artist’s artwork, minted into a new NFT). To help determine this, you can run a simple image search with a few of the NFTs in the collection on [Google](https://www.google.com/imghp?hl=en) and/or other free tools online. One thing we have noted is that these searches may not include results from OpenSea and other NFT marketplaces, hence this risk will always be prevalent but can at least it can be reduced. An additional step you may take is to check out the project’s Twitter and Discord to see if there have been any claims of copying or similar projects.

Google Image Search

# Team The second aspect that should be readily available (whether on a project’s website or Discord) should be details of the team members behind the project: * How big is the team? * Do they have enough people to manage all aspects of the project successfully? * Do team members have relevant experience in their respective positions? The typical roles of team members on an NFT project are: * Artist - Full-time or freelancer? Any reputation? * Developers - Are there enough (typically minimum of 2-3)? Do they have prior experience that are relevant to what they are proposing to build? Are they full-time? The importance of these questions can depend significantly on how big a focus the project has on utility and how grand their roadmap/vision is. * Marketing - Are there specific people fully dedicated to marketing initiatives and Twitter management? What are their key marketing strategies and how effective have they been so far? * Community Managers and Moderators - Are there active community managers or moderators in Discord? Are they welcoming and helpful? Are they engaging in meaningful discussions or simply hyping up the project aggressively 100% of the time? * Oftentimes there is a main project manager too, but very often they are also playing one of the other roles. Another consideration that many people have is whether the team members are doxxed publicly. This can be a significant booster for confidence in the project, especially if the team members are qualified and reputable. This is not to say that projects with undoxxed founders and team members should be immediately written off, but there is indeed increased risk. In these cases, it may be prudent to wait for the team to have delivered some items on the roadmap first. Oftentimes, founders and key team members may be privately doxxed too by a third-party doxxing service such as [Alpha-Verifi](https://www.alpha-verifi.com/), which may provide some comfort. # Utility/Roadmap This is often the main draw of a collection, and usually the most difficult aspect to evaluate. Besides the scope of the roadmap (how broad it is in terms of the various roadmap items included as well as the duration of the planned development), we should also always consider if that item makes sense for the project and/or if the team is able to accomplish its stated objectives (both in terms of team capability and resources, as well as funding). It is easy to be attracted whenever projects include hyped themes into their roadmap (e.g. building their own metaverse), and generally the bigger the ambition the more evaluation is required. Typical roadmap items we see these days: * Metaverses/P2E Gaming * Services (e.g. launchpads, marketplaces, analytics, etc.) * Staking/Tokens/Rev-Share * NFT Airdrops/Future Generations/Breeding * Exclusive Access/Memberships/Alpha groups * Lore/Content Creation (e.g. comics, music, etc.) * Merchandise * Other Niches If a team is building a metaverse/game, how big is the team and how much relevant experience do they have? If the collection is launching its own tokens and will allow staking, what will be the utility (and hence the demand) for the tokens? Never hesitate to ask the team questions on Discord and find out more information that could help significantly in your evaluation. Even if you do not get answers, the way team members respond can tell you a lot about a project. # Marketing The marketing strategy of a collection is important in establishing its brand in the space and attracting newcomers to the community. Some questions to ask here are whether there are specific team members fully dedicated to marketing the project, what their overall strategy is, and if they have allocated a sufficient budget for this. Typical marketing strategies include: * An aggressive Twitter presence with regular giveaways/events * Influencers (crypto twitter and/or celebrity) * Partnerships/collaborations with other projects Another thing to consider is also how well-built the website is. The website is typically the face of a project, and often the first place that newcomers look at when they come across a project. It goes without saying that a higher quality website should provid # Community Development In most cases, the success of a project heavily relies on the community that it has built, and hence it is crucial to evaluate the project’s efforts and effectiveness in community development. The first indicator is usually the number of Twitter followers and Discord members, but be wary of being too reliant on these numbers as bots are rampant these days, especially if the project runs giveaways and invite contests very regularly. A more conservative metric is typically their Discord’s “Online Members”. Another good way to get a feel of engagement is to scroll through a project’s Tweets and Discord announcements and see the amount of reactions/interactions with them. Other than numbers, it is important to know if there are dedicated Twitter Managers and Discord moderators who are fully focused on building the community, and how they are interacting with the community and newcomers. # Overall Framework Here we share a potential general framework that we can use for evaluating NFT projects, which is a neat summary of the aforementioned points.

A General Framework for Evaluating NFT Projects

Typically, projects that score higher across the board tend to generally be higher quality than those that don’t, but there is certainly no one-size-fits-all approach to evaluating all NFT projects the same way. For instance, a project that focuses mostly on high quality, original artwork may rank poorly on utility/roadmap, but if the artist is widely known for their great, original art, and there is a solid marketing strategy and active community development, it can still be considered investment-worthy. Similarly, a project that focuses on pure utility with revenue-sharing/staking/tokens could perhaps get away with lower quality art but has a strong team capable of building great utility. It usually depends on what the key value propositions of the project being evaluated are. That being said, projects that are positioned to be much larger-scale in nature than the average NFT project (e.g. metaverses) should be expected to score better across all categories (i.e. Team, Artwork, Utility/Roadmap, Marketing Strategy, Community Development). # Know Thyself Again, other than evaluating a project based on the aforementioned categories, perhaps more important is knowing your own preferences, risk tolerance, and developing your own strategy. *What projects are you most interested in?* In addition to just being more fun in general, investing in NFT projects that you are actually interested in (and not just buying because it looks hyped) helps you to be more likely to make the effort to check in on the project regularly and keep tabs on its progress. *Which concepts are you familiar/unfamiliar with?* “Never invest in a business you cannot understand.” – Warren Buffett The riskiest projects are not just those that have high risks of rugging or failure, but also those that you have difficulty understanding (and hence evaluating) the risks of. *What is your risk tolerance?* Investing in a project comfortably within your risk tolerance significantly reduces stress as well as the likelihood of making poor decisions. *Do you have an overall strategy?* Investing in NFTs without an overall strategy is a dangerous endeavor. Knowing what your preferences and risk tolerance are would help you greatly in formulating a strategy that suits you and your situation, and would bolster your chances of long-term success. # New Launches ## What is an NFT launch/drop? An NFT launch (aka NFT drop) is the first release of an NFT collection where users are able to mint NFTs from a collection for the first time directly from the creator(s). This can take place directly on the creator's website, or via a third-party launchpad, e.g. Kyzzen, Magic Eden, LaunchMyNFT, etc. It may include a few phase: * Public Launch - where everyone has a chance to mint at a specific launch time. * Presale - happens before the public launch (usually with a fixed amount reserved for whitelist holders), typically exclusive to whitelist holders. ## **How do I find new launches?** Its simple - Kyzzen's Mint Calendar tool aggregates all upcoming NFT launches on Solana from various sources so that you will never miss a significant NFT drop! It includes the project name, date & time of release, a brief description, as well as the relevant links (website, Twitter, Discord). We omitted the supply and price as it is not out of the ordinary for these details to adjust shortly before launch, so always check the project's website, Twitter and Discord to ensure that you have the latest information.

Kyzzen's Mint Calendar Tool

## What do I need to participate? To participate in a public launch, all you need is a wallet (ideally a separate minting wallet to minimize your risk) that is funded with the amount required for minting the NFTs with a little extra for gas fees (0.01 SOL should be enough). To participate in a presale, users usually need to meet certain requirements to be whitelisted, e.g. being early members of the project's Discord, participating in Twitter or Discord giveaways that would require some tasks to be completed, holding specific NFTs from key partner projects, etc. A presale could sometimes extend a discount to qualified whitelist holders, and the presale itself could be executed in a number of tiers (for example Presale Group A & B, with each having different privileges and requirements). There are two main types of whitelists, one requiring whitelist tokens and one without. * In presales where whitelist tokens are required, the minting page would require users to connect their wallet, and verify that the wallet holds a legitimate whitelist token issued by the creator to allow the user to mint. This can be useful for allowing whitelist holders to secure the whitelist, and to allow whitelist holders to monetize their whitelist spots as whitelist tokens can be sold. Whitelist tokens are typically burnt once used for minting, but it is possible for it not to be as well. * In presales where whitelist tokens are not required, the user's wallet address is basically added to a list that verifies which specific wallet addresses are allowed to participate in the presale. Having a whitelist may qualify you for a significant discount to mint and thus increasing your reward potential for participating in a launch, so try your best to qualify for a whitelist spot for those NFT drops that you like the most where possible. However, do also note that sometimes creators grant more whitelists than the presale supply, so even though you may whitelisted, you should try to be as early as possible for minting. ## Tips for participating in new launches: 1. Be sure to check out the previous section on "[Evaluating NFT Projects](/evaluating-nft-projects)", which contains a lot of useful information for ascertaining if a project may have good potential. Knowing yourself, your strategy and why exactly you want to mint is key here. For instance, if you are typically a long-term holder looking to invest in projects with good potential for the long run, you do not have to be too fazed if the floor price dips below mint price shortly after minting, which is typical for new launches with many NFT flippers in the space. If you are minting purely based on hype and looking to flip, you should determine your exit strategy (when you intend to sell and for how much) and understand the risks with flipping - it would likely be difficult to be a successful trader if you try to flip every single new launch, especially without a strategy. 2. The two most common metrics that minters have for gauging hype in an upcoming NFT launch is by looking at their number of Twitter followers and Discord members, but please do note that these can be botted or inflated using many ways. Four other metrics I personally prefer using is: 1. Interactions with the latest announcements in Discord - the number and variety of emojis 2. Number of ONLINE members in Discord - a lot more qualitative than total number of members, and you can note the percentage against total members here. For example, if the number of online members is less than 10% of total members, it could indicate that the Discord server is heavily botted. Separately, additional comfort could be derived when number of online members is more than the mint supply, meaning that there is a higher chance that the launch will be fully minted out - but this should definitely not be the only factor for consideration. 3. Quality of community conversations in Discord - it is common to see Discord channels being overwhelmed by over-hyped "community members", who could be paid to generate conversation and hype. Another good thing to try to get a better feel for a project's community is to ask any genuine questions you may have in the Discord, and observe the quality of responses you get from the team and other community members. 4. Quality of interactions with the project's tweets - a project's twitter is likely to be heavily botted if you see many consecutive spam comments that they "can't wait for this drop to come", "waiting to get 10 of these", "going to the moon", etc. 3. Set up a wallet specifically for minting new NFT launches, only with the funds required for that mint. Minting is an extremely risky activity with a high potential for scams, e.g. scam projects draining your funds after you connect you wallet, scam minting links prevalent in Discord or Twitter, etc. Once mint is successful, transfer the NFT into your cold wallet for safe storage. 4. There will likely be numerous scams surfacing leading up to a popular launch - do not ever click on any links you may see supposedly regarding the project on any social media platform (Twitter, Discord, Telegram, etc.) unless they are official announcements from the official project account. This is why many projects will mute all public Discord channels before and during their mint, to prevent their community from being scammed. 5. Twitter giveaways are one of the main tools projects would use to generate visibility and hype for their mint. Requirements for participation usually include following their Twitter account, liking their giveaway post, retweeting their giveaway post, and tagging a few friends in the comments. Be extremely careful if there are additional requirements such as going into a website and connecting your wallet. If its too good to be true or feels out of the ordinary, it usually is a scam. # Secondary Trading Secondary trading refers to buying/selling of NFTs after the primary launch from creators, typically on NFT marketplaces, but there have been new protocols launching that allows for NFT swapping and options too. # Types of Contracts There has been a lot of innovation in contracts and tools for trading in the Solana NFT space to cater to the wide range of trading situations that you may require, including but not limited to the following: * Escrow fixed-price - where an NFT is taken out of the seller's wallet and placed into escrow on the marketplace's contract to wait for buyers to purchase * Non-escrow fixed-price - where an NFT is listed for sale on a marketplace but remains in the seller's wallet. This can be beneficial for sellers as it means that they can continue to enjoy the perks of possessing the NFT, e.g. continue to be verified in the project or DAO's discord server, qualify for airdrops, etc. * Escrow Bidding - this is when buyers bid a specific amount for an NFT (below its price if its listed), with that SOL amount being removed from seller's wallet and placed into escrow on the contract, meaning that every bid needs to be fully funded to be valid. This is useful if there are specific NFTs that you want (e.g. a specific trait, minimum rarity rank that you can accept, etc.) but you are not willing to pay the listed price. * Collection Escrow Bidding - buyers places a single bid that accepts all NFTs in a collection, meaning any holder of any NFT in that collection can accept the bid. This is useful for buyers that do not care about specific traits or rarities, and is willing to buy any NFT in the collection below floor price (doesn't make sense to make an offer above floor price). * Smart Bidding - this requires buyers to deposit an amount of SOL into a "bidding account" on the marketplace contract, but buyers can place an unlimited number of bids (each amounting up to the total bidding account balance). When a bid is accepted, the bid's amount is deducted from the bidding account, and any remaining bids that exceed the bidding account balance will be invalid until the bidding account is sufficiently topped up or those bids are cancelled. This allows for effective deployment of liquidity for buyers, as they do not have to fund every single bid individually. * Auctions - this is typically used for high-value items where a seller can list his NFT to accept bids for a specific duration (e.g. 1 day, 7 days, etc.) where potential buyers can make increasing price offers (there is usually a minimum increment on each bid, e.g. 5 or 10%). The highest price at the end of the duration will be accepted as long as it is higher than the reserve price (the minimum price that the seller is willing to sell the NFT for), and usually if a bid is made right at the end of the Auction (maybe 5 minutes), there might be a short extension of time for any new bids to come in so as to prevent sniping. * Dutch Auctions - this is when sellers list an NFT at a high starting price (what they think it could potentially sell for) with a stated reserve price (the minimum price they are willing to sell for), with a specified duration of time (e.g. 1 day, 7 days, etc.) where the listed price will continuously decrease in specific amounts and durations towards the reserve price. This is useful for sellers to maximize their sale revenue without the hassle of setting up an auction and marketing it, as the listing can be listed with other normal listings with continuous auto-price reduction, and can explore the true price that buyers are actually willing to pay for instead of setting your reserve price straightaway like with fixed-price listings. * Swap - holders of NFTs negotiate and swap NFTs directly with each other (can be multiple NFTs at a time, and can include SOL too). * Options - NFT options gives the right, but not the obligation, to buy or sell an NFT at a fixed (strike) price by a set date in the future (expiration date). Options is a more complicated topic for advanced traders so we will not go into detail here, but feel free to check out the guide by [Decalls](https://decalls.gitbook.io/decalls-whitepaper/how-do-options-work/what-are-nft-options). # Key Collection Trading Metrics ## Floor Price Trend A collection's floor price is its lowest price of all NFTs listed for sale. Kyzzen aggregates all listings across most major marketplaces on Solana and displays a collection’s floor price on its collection page. The trend in a collection’s floor price across time can be a useful indicator of sentiment towards the collection: * An increasing trend usually means there is increased interest in the collection (either from new buyers or perhaps existing holders looking to collect more) * A decreasing trend usually suggests less interest from holders to continue holding. It is important to note that the takeaway can be different if viewed in different timeframes - for example, a collection’s floor price can be increasing significantly across 7 days and then decrease a bit over the past 24 hours, which could mean some holders are simply taking profits from the higher prices. Floor prices can also be affected by macro factors, such as a general bullish hype or bearish dive in the overall NFT market. Essentially, there are many factors to consider when examining reasons for floor price action in specific situations. In addition to the above, traders often perceive collections with higher floor prices more positively than other collections with lower floor prices. However, the reason for the high floor price should be examined before making such an assumption. For example, a collection could have a very small supply where there are simply fewer holders looking to sell, or the holders could more easily coordinate on listing at higher prices across the board. A more qualitative indicator may be the collection’s market capitalization. You can use [SolanaFloor](https://solanafloor.com/) to check out a collection's floor price trend in detail. ## Market Capitalization An NFT collection's market capitalization refers to the total value of its NFTs based on the present floor price, effectively its supply multiplied by its floor price. Some platforms choose to use average price instead of floor price, although in our view that can be manipulated more easily by big holders listing many at astronomical prices. A higher market capitalization means the NFT collection has a higher value, and the top collections with the highest market capitalizations are usually considered blue-chip projects. Market capitalization can be measured both in the blockchain's native currency (e.g. SOL, ETH, etc.) and its USD value. ## Volume Traded “Volume traded” refers to the amount of currency (e.g. SOL) exchanged between buyers and sellers for a given collectionin a specified timeframe. The collection’s trading volume is usually one of the major indicators that traders use when evaluating which collections to trade, as it can reflect how much awareness the collection has in the space based on the notion that the more well-known a collection is, the more trading activity it will likely have. Similar to floor price action, it is useful to bear in mind trading volumes across different time frames when evaluating collections. For example, collection A could have twice the all-time trading volume of collection B, but it could have been existing for five times as long as collection B. Also, relatively higher trading volumes in shorter time frames (e.g. 24H, 7 days) can mean that the collection has a lot of attention on it during this period, but bear in mind the reasons for the attention and their sustainability. Trading volumes tend to be exceptionally high for a collection immediately after their launch. One thing we always like to see is the endurance of high trading volume throughout longer periods, which represents persistence in the interest in the NFT collection. To see NFT collection volumes across Solana, simply head over to Kyzzen's "Explore Collection" page, which tracks trading volumes across multiple timeframes and across most major NFT marketplaces on Solana. While we are here, it is also important to note and understand the concept of **Wash-Trading**. Specifically, in the scope of NFTs, wash trading occurs when traders simultaneously sell and buy the same NFT to generate artificial and potentially misleading trading activity of a collection in a marketplace using different wallets, giving the impression that there is more hype in a collection than actually exists. [Hello Moon](https://www.hellomoon.io/) has an interesting tool to track wash trading activity in collections that you can check out. ## Listing % The number of listings as a percentage of total supply of NFTs in a collection has a significant impact on floor price action. It is a useful indication of the percentage of owners that plan to hold on to their NFTs, and hence can represent the desirability of the collection's NFTs too. Typically, a low "Listing %" (usually less than 5% of supply) shows confidence in the project by owners, and hypothetically has a higher potential for prices to increase as each sale has a higher impact on the floor price (because there are less listings). Significant movements in "Listing %" can be an important indicator to track: * A huge increase could mean new concerns for a project or a potential rug * A huge decrease could mean that there is new good news that holders are agreeable with, or there is an upcoming event, e.g. launch of staking utility, upcoming airdrops, etc. ## Holders/Owners % Holders refer to the owners of NFTs in a collection and represents the size of a NFT collection’s community. The higher the ratio of holders to the collection’s supply (usually reflected as a percentage) typically means a more diverse community, and could also mean that the collection is less susceptible to the actions of whales (usually refers to collectors who own a lot of NFTs in a collection, and sometimes also refers to collectors who have a lot of funds that allow them to make large trades that could significantly impact a collection). [SolanaFloor](https://solanafloor.com/) has advanced dashboards that track a collection’s owners: * Number of Owners * Number of NFTs per Owner * % Owners per Quantity * Owners Concentration * Top 10 Owners
# Selecting which NFT to Buy There are four main considerations that NFT traders typically have when looking to buy into an NFT collection: 1. Cheapest - willing to buy any at floor price (or perhaps make a collection offer below floor price) 2. Specific Traits - looking to buy NFTs in the collection that hold a specific trait, e.g. "Skeleton Skin" in "Solana Monkey Business", "Degen Service Shirt" in "Degenerate Ape Academy", etc. These traits could be more sought after in the collections because of how they look, inclusion into a sub-DAO, or qualify for specific/additional perks. 3. Rarity - looking for a minimum rarity rank (e.g. top 10% or 25% in the collection). Generally, the better the rarity rank of an NFT, the higher it could potentially be valued by buyers (for those that care about rarity at least). There are three main rarity ranking platforms in the Solana NFT space (MoonRank, HowRare, SolRarity) and there are tools (e.g. SolanaFloor, HowRare) that allow traders to find the distribution of "Price vs Rarity" to hunt for the "best" deals in an NFT collection in terms of rarity rank. 4. Others - sometimes, there are additional perks for holding a certain number or types of traits NFTs within a collection. It is always important for traders to properly DYOR in an NFT collection to know what they should be looking for in their purchase. # Discovering the NFT Space The NFT space is massive and always expanding, always evolving. Beyond just trading of NFTs, there is a lot more to explore, such as lending, raffles, giveaways, events, and more. Up till now, it has been incredibly difficult to keep track of all the latest developments and new utilities in the space, and that is why we created Kyzzen, the Ultimate NFT Hub. In this section, we will look at many of the things we can do (outside of trading), including but not limited to: * Lending * Staking * Raffles * Giveaways * Events * News # Staking NFT staking is a way for NFT holders to unlock value from their NFTs by locking them up on a platform/protocol to earn rewards. Such rewards include receiving tokens (could be for the purposes of use in games, utility within the project's ecosystem, project governance, passive income, etc.), NFT airdrops, whitelist spots and more. Staking is often offered as an incentive for holders to hold onto their NFTs and not list them. Less NFTs listed means less selling pressure, and hence a higher floor price for the collection. Staking programs and mechanics can be quite technical, but some of the key things to pay close attention to are: * whether the staking contract is custodial or non-custodial, meaning whether the NFTs are taken out of your wallet to be staked or can remain in your wallet throughout the staking duration, respectively. * Lock-up period / staking duration, basically how long your NFT will need to be staked for. * APY (annual percentage yield), which applies only when staking for passive income. It refers to the how much the total value of your staking rewards (at current token prices) would be after accumulating over the course of a year, divided by the value of the staked NFT. It is important to note that there have been and continues to be debate in the NFT space regarding potential regulatory concerns over passive income received in NFT projects, as such NFTs could potentially be perceived as securities. # Lending NFT Loans allow holders to collateralize their NFTs to borrow funds (usually SOL or stablecoins) thereby unlocking a lot of value from the NFTs they hold, and for lenders to lend funds to earn interest on loans. Borrowers lose their NFT collateral in the event of default, either directly to the lender or to the lending pool, depending on the protocol. There are relatively simple basic concepts to understand: * LTV (Loan-to-Value) - amount of the loan relative to the value of the NFT (usually determined by floor price of the NFT collection) * The lower the LTV, the safer it is for lenders as the likelihood of borrower default decreases with the lower likelihood that total repayment amount (loan amount + interest) would be more than the value of the asset at the time of repayment due to floor price volatility. * The quality of collateral can be an important factor for LTV. Higher quality NFTs (e.g. bluechip projects) could experience lower lower price volatility (or perhaps even higher upside potential) and hence lenders are usually more comfortable with higher LTVs. * Loan Duration - how many days the loan is offered for * The shorter the loan duration, the lower the risk of borrower defaulting because of floor price volatility. * Borrow Interest - % of the loan amount that the borrower has to pay at the end of the loan period, often expressed in annual terms * Borrowers like cheaper loans. * Deposit Yield - % of the loan amount that the lender will earn by the end of the loan period * Lenders like higher deposit yield. In a perfect world, borrow interest and deposit yield represent the amount of risk in a loan, based on LTV, quality of collateral, and loan duration. * Lenders are only willing to lend if the deposit yield is equal to or more than the risk of the loan. * Borrowers are only willing to borrow if the borrow interest makes sense for the loan terms (LTV and duration), and if they are confident that they would be able to repay the loan with interest when its due (supposedly). There are mainly three types of loan offers: * Offer from Lenders - where lenders can dictate the terms of the loan such as NFT collection, loan amount, interest, and duration, but this ultimately depends on the platform as some have mostly fixed terms and allow lenders to only state loan amount they are willing to offer. Prospective borrowers evaluate these offers to decide if the terms are acceptable. * Offer from Borrowers - where borrowers can list their NFT that they want to borrow against, and state the amount they want to borrow and at what interest rate. Prospective lenders then evaluate these offers to decide if the terms are acceptable. * Lending pools - where a pool is set up for specific NFT collections with fixed terms (loan amount, interest, duration). Borrowers simply decide if they are willing to borrow at those terms (and deposit their NFTs if so), while lenders simply deposit funds into the pool to earn the stated deposit yield. In this case, lenders and borrowers are not specifically paired together. Tip: * Be especially careful lending at high LTVs as many borrowers use loans as exit liquidity (to sell their NFTs). Before making a loan offer or depositing into a lending pool, always ensure that the LTV is lower than the (floor price - creator royalties % - marketplace fee) with a reasonable buffer to account for floor price volatility. Otherwise, you will likely experience a high loan default rate. Main Lending Platforms: * [Sharky](https://sharky.fi/) * [Citrus](https://citrus.famousfoxes.com/) * [Frakt](https://app.frakt.xyz/lend) * [Rain](https://rain.fi/) Be sure to read each protocol's documentation thoroughly if you are looking to participate in NFT loans to fully understand their mechanics, which differs widely from protocol to protocol. Kyzzen has built a simple tool to help users track NFT loans across Solana on Sharky, Citrus and Frakt. # Raffles A raffle is a competition where users obtain tickets, each of which has the chance of winning a prize. The most popular NFT raffles platform on Solana is Famous Foxes's [rafffle](https://rafffle.famousfoxes.com/).

Famous Foxes' rafffle platform

Here, users can buy up to 20% of total tickets to participate in an NFT raffle. Raffle tickets cannot be refunded once bought, and will not be refunded if you did not win the raffle. All NFT prizes are held by rafffle in escrow and can be claimed by the winner or creator once the draw is done. For more tips on participating in raffles, please read this [guide](https://vell-sol.gitbook.io/fff_raffle_buyer_tips/) by Famous Foxes. # Giveaways Giveaways are the main tool that creators use to promote their projects and/or collections, and they are usually held on Twitter or Discord. The creator of a giveaway typically offers NFTs or whitelist allocations as the prize, with a list of required tasks to be fulfilled for users to qualify. Giveaways typically last for 24-72 hours, and required tasks can include the following: * Follow the social media account * Like the post * Retweet the post * Tag a few friends in the post * Drop a comment on the post Users may be required to share their wallet address in the comments to receive the prize if they win, or the creator may message them directly after the winners have been chosen. Users need to be extremely careful when participating in giveaways, as it can be used by scammers as a tool. It would be wise to avoid participating in any giveaway that has extraordinary requests, such as clicking on external links, connecting your wallet to a website, sharing your wallet's seed phrase, etc. Kyzzen has built a free Twitter Giveaways tool to help users to find and participate in giveaways on our platform, but do note the disclaimer below which serves as the terms of use of this tool. *Disclaimer: This tool automatically scrapes for potential NFT giveaways on Twitter using loose parameters, and users are advised to be extremely careful when considering whether to participate in any of them. In particular, users should be extra careful when there are external links in the tweets or if there are extraordinary instructions, such as “connect wallet”, “download something”, or complete some extraordinary tasks. Kyzzen does not verify or fact-check any of these tweets, and does not endorse or curate any of these projects . Kyzzen will not be responsible for any losses that may directly or indirectly result from the use of this free tool.*

Kyzzen's Twitter Giveaways Tool

# Events Events are a huge part of the NFT space where traders, builders, and investors connect in real-life (or virtually) for the purposes of networking, learning, collaborating, or just education in general. Users are encouraged to join these events where they can connect directly with project teams, ask any questions they may have and learn more about them. Events typically require tickets (paid or free), and the larger ones usually have Telegram chat groups to share more specific details and encourage networking, and also have a list of side events around the main event, typically organized by sponsors. Kyzzen has built a free Events Calendar to help users track major global blockchain or NFT events, where you can filter events based on country, and relevant links for Telegram groups and/or side events are shared if applicable.

Kyzzen's Events Calendar tool

# News It is important for users in the NFT space to be updated with the latest NFT news regularly, as key events or developments can significantly influence the NFT market as a whole. For example, potential SEC statements on NFTs as an asset class, progress in the intellectual property rights of NFTs, or huge global corporations entering the NFT space could have huge impacts on the space. Kyzzen has built a free aggregator specifically for NFT news to make it easy for users to stay updated, pulling newsfeeds from the following publications: * CoinDesk * CrytoNews * NFT Plazas * NFT Lately * NFT News Pro * NFT News Today

Kyzzen's NFT News tool