On the leading digital collectibles marketplace OpenSea, the average price of an NFT sale is around $900. With this in mind, you can see why millions of people are keen to hop onto the NFT craze and secure themselves a piece of the action, especially when some of the most expensive NFTs now cost more than an original Picasso.
On that note, if you’re thinking about buying your first NFT, or if you want to add new items to your collection, you need to get to grips with NFT drops if you want to be able to beat the crowd and secure the best price for your investment.
What Is An NFT Drop?
Just as your favorite artist drops a new album or Marvel Studios drops an Avengers movie in the theaters, NFT artists drop new collections for investors to buy. As it is with the nature of NFTs, these collections are usually one of a kind. This uniqueness makes them valuable, as NFTs cannot be replicated, copied, or modified in any way.
As a result, NFT drops provide an excellent opportunity for investors to secure a one-of-a-kind piece of digital art at a low price, which means there are plenty of opportunities to turn a profit. It’s no surprise then that some of the most popular NFT drops are hotly contested, with hundreds, maybe even thousands, of people frantically trying to get their hands on these rare items.
Thus, if you’re planning to participate in a popular NFT drop from a famous artist, brand, or designer, you need to prepare yourself the best you can. On top of this, if you plan to profit from this trend, keep in mind that the more hyped-up and exciting an NFT collection is, the more competition, you’ll have when it launches.
Where To Find NFT Drops
In many ways, the hardest part about securing an NFT drop is hearing about it in the first place. As the industry becomes more popular and more investors enter into the space, it can be difficult to find a diamond in the rough, but there are some ways you can stay ahead of the crowd.
With most things in life, social media usually proves to be the best place to source information quickly, and NFT drops are no different. Twitter, Instagram, YouTube, and Facebook are great places to hear about drops before major publications report on them, so it’s a good idea to find a few reputable accounts and follow them. However, make sure you verify your sources, as social media is littered with bogus information and the potential for scams is high.
Financial/investment or NFT news publications (cough, cough)
NFT news publications like NFTgators can help you source news regarding upcoming NFT drops since you can have a higher level of certainty in the drops being mentioned. Our NFT collections index is another section to look at for finding opportunities.
Join an NFT related subreddit, Discord server, or another similar platform if you want to connect with NFT investors. These are excellent places to learn and share info about the industry and upcoming drops.
NFT marketplaces where drops are held usually advertise upcoming drops directly on their website. Places such as Opensea, SuperRare, NBA Top Shot, and NiftyGateway are some of the most popular, so make sure you keep an eye out for any drops that might catch your attention.
How To Prepare For An NFT Drop
Ready to take part in an NFT drop? Here is a quick step-by-step guide to follow that will help the process go smoothly.
Have a MetaMask Wallet
Most NFTs are hosted on the Ethereum blockchain, which means you’re going to need some ETH and a compatible wallet. MetaMask ticks all the boxes in just about every scenario, so set up an account with them if you haven’t already.
Purchase ETH to cover gas fees
Now you need to load your wallet with ETH to cover the gas fees (the cost of making a network transaction). Gas fees vary widely depending on how busy the network is, but generally, you can expect the fees to cost anywhere between $10 and $300+. If you’re attempting to win a popular NFT drop, here are some tips on how to win a gas war.
Research the NFT creator
Doing your research is a critical aspect of any form of investing, but even more so in the NFT world. When you buy an NFT, you’re essentially buying the brand (or the brand’s public perception) since that is what will drive the value.
Set your price limit
Know your price limit before you get caught up in the frenzy of an NFT drop. Just as with any other form of investing, you should only invest what you can afford to lose, so avoid drops that do not fall within your budget.
There are thousands of new drops each week, so try to avoid succumbing to the dreaded FOMO and buying an NFT that doesn’t match your criteria. Never rush – there will always be another drop.
How To Avoid Getting Scammed When Participating In An NFT Drop
Finally, you must keep your wits about you when partaking in NFT drops, as there are plenty of scammers lurking in the shadows. The unfortunate reality is that any time there is a significant amount of money on the table, opportunists and scammers will always be looking to pry money away from unsuspecting and naive investors.
Aside from the standard phishing attempts prevalent in many industries (such as fake websites, direct messages, and fake brands), one of the NFT specific scams you need to be aware of is rug pulls. In short, a “rug pull” occurs when an NFT artist creates a project, takes investors’ money, and then completely abandons the project. In turn, the designer’s brand becomes worthless, and as a result, your NFTs will lose all of their value.
So how do you avoid this? Well, the only way you can lower your risk of falling victim to a rug pull is to do your research before investing. Verify the identity of the artist. Check out how long they have been in the community and look at some of their past sales. If all of their social accounts are brand new and their portfolio seems a little unpolished, these are major red flags that you need to consider. In general, try to invest only in active bands or artists with a proven track record.
Participating in an NFT drop is one of the best ways to secure a rock bottom price on a great piece of digital art. If successful, you will be the very first owner of this digital asset, and if the brand becomes popular or the NFT collection goes viral, there is a real chance that you could see some nice returns on your investment. With that said, it’s worth taking your time to find the highest quality NFT drops, as well as doing your research before handing over your coins so that you can be sure you aren’t falling victim to a scam.