Contrary to common knowledge, blockchain technology entails more than just cryptocurrencies, harboring a host of other use cases; one of which is NFTs – a burgeoning sector fast becoming one of the biggest markets in the blockchain industry.. As the NFT marketplace continues to grow, the need for NFT tools has increased as more investors try to find the next best non-fungible asset.
While the benefits of NFTs have become apparent over the past two years, the NFT markets is one many consider to be a bubble and investing in this space can be daunting, particularly as a newbie. That, and the fact that there are always bad actors with malicious intent (as with every other sector). It needs no saying that it is crucial to have the appropriate tools to guide your investment decision when dealing with NFTs, hence, the introduction of NFT analysis tools.
It doesn’t matter if you are new to NFTs or you have your collection in the market, NFT analysis tools help evaluate the availability and rarity of specific assets and can help provide insights to guide your investment strategy . This is what we will be covering this in this piece.
What is an NFT?
NFT stands for (Non-Fungible Token). They are digital assets, or can be described as a type of digital certificate that represents a great variety of intangible and tangible items such as digital arts, music, paintings, virtual real estate, postcards, videos, and so much more. They cannot be replicated or equated with any asset that is similar to them, with reasons being that all non fungible token assets are unique on their own.
The uniqueness of NFTs is what creates scarcity for them hence, increasing their value. When you purchase an NFT, ownership is being transferred to you although the creator gets royalties whenever their work is being sold. Unlike regular cryptocurrencies such as Bitcoin and Ethereum which are fungible and maintains a standard value even after their exchange, NFTs cannot be directly exchanged for one another, as its ownership can easily be verified, eliminating the need for third-party verification forever.
Before we dive into NFT analysis tools, let's briefly look at the history of NFTs.
Brief History of NFTs
We can trace the origin of NFTs from colored coins, which were issued on the Bitcoin blockchain in 2012-2013. These colored coins represented real-world assets, like art or real estate, and they were used to prove ownership of these assets. In 2017, Crypto Punks was released by two persons named John Watkinson and Matt Hall on the American Studio Larva Lab’s Ethereum Blockchain. It didn't stop there, in that same year, another project named generated an investment of $12.5 million.
Following these events, the year 2021 witnessed a sudden rise in NFTs as more people became interested in digital arts and the associated benefits it provides. The most expensive NFT ever sold is Beeple’s “Everydays: The First 5000 Days.”, which was auctioned for over $69 million on March 11, 2021.
The NFT trend ushered in a new possibilty of creators, enabling them sell their art globally and still retain royalties for their work. A good example is the Berlin net-art gallery, where buyers were able to show appreciation while supporting the artist and the gallery. The NFT narrative enables people to create a marketplace for just about anything with trackable proof, and their history of ownership is verified.
Key Features of NFT
Digital Asset: It is represented with digitalcollectibles such as paintings, art, music, real estate, games, etc with an authentic certificate backed by blockchain technology to certify ownership.
Unique: It cannot be forged
Exchange: You can sell it to others for a fee using cryptocurrencies as payment
Top NFT analysis tools to look out for
According to an analytics report on DappRader the NFT space was able to record a trading volume of $10.7 billion in Q3 of 2021,, resulting in a 704% increase compared to the last quarter, and the Ethereum network accounted for over 77% of the NFT trading volume. With NFT analysis tools, investors are now able to recognize unique assets.
Considering the number of NFT tools available today, you can evaluate and review an NFT before making an investment decision. With the appropriate tools, you can uncover good NFT projects that will be worth a fortune in the near future.
In no partcular order, we have put together some NFT tools to help you as you search for new NFT projects to invest in. They play an important role as you perform due diligence because wrong data can get you involved in a scam project. They will also help you identify rarity in NFTs, news sources, and marketplaces.
Rarity Tools is a well-known NFT tool for creators. Rarity.tools platform makes use of a unique and simplified method of ranking individual NFTs which makes it easy to determine how rare a particular NFT is. To obtain the overall NFT Rarity, the Rarity scores are summed up to determine which NFT will be ranked highest. NFT enthusiasts can easily compare the relative value of different NFTs on the platform which makes NFT swapping and trading easier. Some of the top NFT projects on rarity tools are CryptoPunks, Bored Ape Yacht Club, Hashmasks, etc.
Furthermore, Rarity.tools can be used to hold NFT objects from one collection, track new updates, and add new features to the platform. There is also functionality on the platform that enables you to sort by categories of traits which gives a new overview of things. Other unique characteristics such as aesthetics and trait combination may help make an NFT more valuable. Regardless, do not invest in an NFT purely on unique traits.
OpenSea is the biggest and most well-recognized NFT marketplace founded by Alex Atallah and Devin Finzer. It's used for buying, selling, and trading NFTs, digital assets, virtual collectibles, etc. The platform is expanding beyond collectibles to become a marketplace for digital assets such as game items, music, domain names, and many more.
OpenSea has an easy-to-use interface, which makes it simple for beginners to navigate the platform, mint NFTs, and trade. Being the largest NFT platform,many fraudulent NFTs have been listed, a challenge the platform hopes will be quenched with its newly implemented measures. Although these measures may help curb fraudulent NFT purchases, victims of fraudulent products will still be unable to recover their assets being a decentralized market. So, ensure you carry out due diligence before investing in any NFT platform.
Opensea is available on mobile devices for easy access and it also provides some helpful materials, including tips on how to avoid scams and stay safe on the decentralized web.
Nansen is a great analytic tool used to analyze billions of on-chain data points, wallet labels, and crypto-related entities to give all the information that any crypto/NFT investor could want. The platform has an NFT-specific section used to compare activity, portfolio, and strategies.
Nansen is utilized by serious NFT traders and it offers some of the most comprehensive NFT market analysis, focused on individual wallets with unique insight into the movements in the NFT market. Noob NFT collectors will find the amount of data overwhelming, but veteran NFT collectors/traders will discover an interesting amount of useful information at their fingertips.
Icy.tools analytics tool is almost like Nansen. The platform is basically for NFTs and you can either buy a weekly pass or buy an ICY Founders Club NFT (which grants owners lifetime access, and can be traded on OpenSea). Free users can get to see what they do but to utilize the complete feature, you either have to subscribe or own a Founders Club NFT.
The ICY Founders club NFT has a collection of 1,700 membership cards, with 1,649 for early access buyers, granting them a lifetime access, and 51 reserved for promotions and giveaways in the future. Its Discord server is a valuable resource for people using ICY Tools, and those holding the token will gain access to the Founders Club channels. Once you connect to the server using the wallet that contains your membership card, access will be automatically granted. Another important detail is that the server uses Collab.land — a user-friendly, tokenized, community-management system designed for anyone to build tools to manage their community.
The CryptoSlam NFT platform is another analytic tool that helps traders make decisions on which collection they should invest in. By displaying notable NFT sales data which includes sales volume, number of transactions, owners, and upcoming NFT drops, users can make investment decisions best suited to them. One of the most notable features of the platform is the daily NFT collection which is tracked by volume. Top-selling collections can be viewed in various time frames: 24 hours, 7 days, 30 days, or all-time.
The platform makes it easier for traders by providing a single view of all top-selling NFTs for each day, and it changes daily as data is streamlined from OpenSea and dozens of other NFT marketplaces. Researching sales data is essential for traders especially when they intend to determine if they are buying at a peak or a dip, or if the collection has been in a downward or upward trend.
General questions to ask before investing in an NFTs
While there are several factors to consider when investing in an NFT project, these questions can be a great way to help determine the credibility of a project;
How many pieces of the NFT collectible are available?
What marketplace is the NFT listed?
Do they have an account on Twitter, Discord, YouTube, or other NFT platforms where enthusiasts spend their time
Does the creator or artist have a community, is it a strong community, and where can you find them?
The main reason behind NFT analysis tools is to help limit the number of scams on major marketplaces. Investing in NFTs can be time-consuming, somewhat risky, and almost impossible without spending hours on social media platforms and NFT marketplaces perusing the million of NFTs available. However, with the aid of analysis tools, you can conduct accurate research, saving time, effort, and funds. Also, depending on what you want for an NFT, analysis tools canl help you with a variety of options to choose from, drowning out all noise and fuss of most projects on social media platforms, presenting you strictly with facts and figures to help guide your investment decisions.