The NFT marketplace has been exploding in value. From the thousands of applications and tokens on offer, it is easy to get lost in all the noise. An investor’s most important job is to sift through all that noise and find legitimate projects with long-term prospects.
With so many scammy projects emerging, it is always a good idea to stick to the well-established platforms or those that are backed by reputable investors or developers. The NFT space is still in its infancy, and scams are a sad reality of any new and exciting space.
There are so many NFT games and Dapps on the Ethereum blockchain. Some of them are good, and some of them are bad. Most of them are scams or Ponzi schemes.
So how do you spot a legitimate one? In this article, we will help you identify them with these tips.
What you need to know before investing in NFT games:
1. Do extensive research and background checks.
The first thing you’d want to do is visit their website. If the website isn’t secure, under-developed or lacks relevant information, such as details about the developers, whitepaper, roadmap, community links, social proof and partners. This is already a red flag.
There are a handful of price-tracking websites for crypto assets for all things crypto-related. These well-known platforms provide accurate, timely and unbiased information. Data in these websites can include cryptocurrency prices, events, links to NFT game websites, communities, whitepaper and compatible crypto wallets among many others.
Aside from the website’s aesthetics and information, you’d also want to know if they have an established team – the people behind the project. Make sure their LinkedIn profiles check out. It is also a plus if the team involved has previous experience building games or has been involved with other successful NFT games.
Another way of keeping yourself informed and updated is through actively engaging with the specific project’s communities. You’ll get an idea if a project is good or not if they have a helpful, engaging and well-informed community.
2. Beware of all things fake!
If the NFT game is raising money, make sure they have a list of the entire team involved with their relevant information. Projects like Pegaxy have set these up on their website. If they don’t have one, ask why.
By having the team’s real-life pictures, names and information open to the public, they are now held responsible and accountable for any legal issues that may arise in the future. This provides trust between the investors, gamers and community.
More importantly, don’t invest more than you’re willing to lose – always be prepared for the worst-case scenario. Stay away from games that promise high returns or “passive income”.
Fake websites, fake technical support, fake offers and giveaways are polluting the NFT gaming space. Avoid clicking suspicious and unfamiliar links you receive from emails, random private messages and prompts asking you to reveal your secret recovery phrase.
3. Understand the Tokenomics
Tokenomics helps to illustrate the future worth of an asset. It provides an insight into the profitability of one crypto asset over the other in the future.
An important element for investors that can help them decide which asset will be more profitable to invest in is the tokenomic characteristics. These characteristics include Metcalfe’s law, network effect, and scalability.
Another factor to consider is the liquidity of the marketplace. If there are not enough people buying the NFTs, it’s another sign that the NFT project you’re considering is likely a scam.
Other key elements include the existence of an ecosystem. Is there any app or platform built on top of this NFT or does it exist in a vacuum? You should also be able to find a demo or beta version of the product to play with before committing anything to them.
One of the most important aspects of tokenomics is that it helps crypto projects achieve a fair distribution of their tokens and grow their communities organically through incentives. The basic aim is to create value for everyone involved in the project — from users and traders to developers and investors.
Bottom Line
Smart NFT gaming communities set clear rules on how players can conduct themselves, what is expected of them, and what is off-limits.
Scams, shills, and rug pulls are detrimental to the development of gamer culture and in the end, hurt the entire community. The best way to prevent issues with scamming and bad actors is to expect them, be prepared for them, and take clear measures to disallow them from happening.
Writer on Demand PH 