Thread on the expectations of #NFT flipping.
1. Always check the community engagement of a project before it mints.
It doesn’t matter if the project has 100k followers, if the members are all there with the purpose of flipping for profit, it will never be blue chip.
2. The relationship between the development team and its members has to be completely transparent.
If your members, and in the case of NFT flipping - traders, cannot trust you, why should they invest their cash into the project?
3. This transparency can boil down to the simple statements such as release dates and timings.
If there are contract issues or rendering issues which delay release, this should be communicated well.
4. It should be a big red flag🚩if a project changes these timings without explanation.
Based on this, if you have a suspicion that a project seems dodgy or ruggy, you are probably right.
5. @MekaVerse highlighted this kind of action recently.
Timings of release dates were changed without notice and additional time to mint was allowed after community backlash.
6. If you didn't get a chance to mint, you will likely fail to flip an NFT off secondary sales.
Almost every project has a huge spike in value after minting as those who missed out want to get in whilst it is still hyped.
7. This spike is typically followed by a significant drop in value as owners realise they haven't got a 1/1 and their NFT is not very collectable.
It is always hard to judge the floor bottom but these FUD listings are the ONLY TIME YOU SHOULD BUY DIRECTLY AFTER MINT.
8. This is exactly what I'm talking about:
#Mekas originally spiked to 10 Eth off mint. Then consolidated at 6 Eth before the reveal period. After the Mekas were revealed to their owners, those with floor Mekas wanted to get out quick and floor plummeted.
9. This leads me to talk about game theory behind flipping a #PFP collection.
Everybody mints in the aim to gain a 1/1 to flip or to flex.
But, do you have a game plan for what happens if you don't get a 1/1? Always be prepared to get the floor, anything else is a bonus.
10. Another problem that has recently arisen is the overnight expectation that a 1/1 is worth 1000 Eth.
If a project has just released, has no proof of utility behind roadmap statements, where do you gather this evaluation?
11. Furthermore, don't be afraid to take profits on an NFT flip.
If you're worried you're selling too low, remember that just because a trait floor may be 100 Eth, you still need to convince others and especially outsiders that it is worth that.
12. Many members of projects reach herd mentality with traits as, if as long as no one sells, the value of the trait must be worth that they say... right?
Wrong. Projects die due to people refusing to sell, which leads to a lack of accessibility to new members.
13. There will always be people who grill you for selling early as they think the project will become the next #cryptopunks or #BAYC.
The ability to realise when a project is tanking is equally as valuable as realising it's a hidden gem.
14. It is also valuable to see how the floor price of an #NFT reacts to the pricing volatility of its native token.
E.g. If ETH pumps and an #ETH collection's floor drops dramatically, you can tell the owners have no intention to hodl.
15. It is also important to take a step back and evaluate the minting price of an #NFT.
If a 10,000 piece collection mints at 0.1 eth, what have the development shown you to evaluate the project at a minimum of 3.8 Million USD (as of writing) prior to secondary sales?
16. Check the royalties of an #NFT before purchasing one. If you intent to flip it for marginal gains, remember that it is typical for the founders and marketplace to take a cut.
It is fair to assume to be weary of a project if the development team take a very large cut.
17. Bots will be there to scoop #NFTs set at a certain value and this is understandable.
What is not understandable is individuals bidding significantly above floor pricing on unrevealed NFTs which after reveal are exposed to be 1/1s or valuable
This indicates insider trading🚩
18. It is possible for someone to investigate the metadata of a project to snipe some rare NFTs but when orchestrated to perfection without knowing trait value, this is always suspicious.
A rare agreement for myself with @beaniemaxi
19. Always be aware of how the development team/socials of a project change after minting.
If the twitter/discord is popping off before mint and then dies shortly after, you can tell it's ruggy.
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.