There are many factors that could influence the value of a collection. To perform a better evaluation, we have summarized 6 key indicators. Let's dive in.
1. Market Performance
There are some key metrics that reflect the collection's performance in the market, including market cap, trading volume, floor price trend, and liquidity. Their recent trends reflect the quality of a collection and predict its ability to grow. You can find these metrics under each collection page on NFTGo.io.
Holders also reflect the quality of a collection. There are three factors that matter the most, including the holder's identity, holding amount, and holding period. For BAYC, there are 90.69% blue chip holders and 8.36% whales, which indicates the component of the collection holders is healthy. Besides, the holder trends are stable and the whale holder trend is gradually increasing.
As for the holding amount and holding period, a healthy collection is considered to have a more distributed holding amount and long-term holders.
The listing information is a factor that reflects a collection's quality in the short run. For example, if there is a large number of blue chip holders and whales selling NFTs in the collection, it probably indicates that people are disappointed by the project and try to exit.
The utility of collections comes from their real application, between both the physical and/or digital worlds. Without utility, a digital asset has no use case and therefore, low demand. The forms of utility may vary, including staking, ticketing, gaming, exclusive access to a community, etc. You can usually find this information on the collection website and/or community.
5. Community size
Community is a key factor for the success of a collection as it reflects the popularity of the collection and its ability to expand in the market. Most collections are active on Twitter and Discord, so checking the number of followers and members in the community will help you evaluate the collection's quality.
6. Team background
The team's background and experience are also crucial to determining a collection's value. There are some important drivers that impact the value of a collection, including:
- A history of successful collections;
- Doxxed team with relevant skills (e.g. coding, marketing, operations);
- A clear long-term and practical growth plan;
- The ability to maintain valuation and VC funding in the bear market.
Updated 5 months ago