How to Evaluate NFT Projects

By Lily Hansen-Gillis, Kagami, and Dušanka Seratlić

Keep in mind that this article, as well as any and all Surge articles, are purely educational and not to be taken as financial advice.

Have you ever asked a question in Discord and been told to DYOR? Frustrating, right? Well, we’re here to tell you what DYOR stands for and how to actually do it. 

DYOR means “do your own research.” The crypto space is incredibly volatile and no one wants to be seen giving financial advice (if they are, that’s a definite red flag!). DYOR basically means: “You’re responsible for your own money and you should make sure your investments are sound.”

It’s a reminder to take the time to critically evaluate the projects you’re planning to invest in. But, how does one do the research? What are the things to focus on? What are the green, yellow, and red flags for NFT projects? 

In this article, we give you a DYOR roadmap that could help you set criteria when evaluating NFT projects. We compiled this list through shared effort in our community: from members, the writing team, and the founders. It’s by no means exhaustive, but this is what we use to evaluate projects we invest in. 

What to Look for in an NFT Project

NFT space is rapidly moving: new projects pop up every day. Even seasoned crypto veterans fall prey to NFT scams: just consider the case of the lovely Kevin. 

Some projects may be outright scams, but some may look good on the surface and end up worthless in the long run. That’s why we recommend… 

PRO TIP: Before we start, we’d advise to figure out your budget and investment strategy/values. Be aware that you could lose out on profits or even lose the initial investment. Knowing where your limits are will help you to avoid FOMO (fear of missing out) and think more strategically about what you’re minting.

Now let’s get to the list!

1. THE TEAM

Although it may seem the NFT space is all about monkeys and complicated crypto tech, it’s actually all about people. When you invest in a project, you bet on the team to deliver value - whatever that value may be for you.

A team is absolutely critical to the success of an NFT project. If you ask any serious investor, in crypto or traditional finance, they’ll tell you they always bet on people. 

So, how do you evaluate the team? Here’s what to look out for:

Is the team doxxed?

When someone says that the team behind an NFT project is doxxed, it means that they’ve chosen to publicly share their personal information (e.g. names, past work experience, and wallet address).  

Doxxed teams have a much higher incentive to keep their reputation unscathed. That’s why being doxxed is generally seen as a good sign for an NFT project. 

Or… are they anon?

On the other hand, you’ll also see projects where the founders and the team are anonymous (anon). This isn’t in and of itself a bad sign, but it certainly warrants a closer look and a deeper dive. The majority of scams we’ve seen in the space have been done by anon teams - it’s simply easier to cash out profits and disappear into the ether if you’re anonymous. 

That said, anonymity is generally more accepted in crypto than in other industries. Many teams that have made great projects are anonymous. For example, the artist Shl0ms is pseudonymous, but their past work is tied to their pseudonym and can be researched by those interested in a potential future project.

Doxxed or not, this is what you need to ask:

• Does the team have previous experience building? Have they built a successful project before?

• Is their reputation solid? Is there a way to track their career, whether through pseudonyms or real names?

• Can they demonstrate actual skill? If business people, what businesses have they built? If designers, do they have a portfolio online? For coders, do they have a GitHub profile that’s active?

• Are their socials legit? Going through their Twitter, do you get a sense they’re passionate and dedicated? 

• Once you get into their Discord, is the team willing to answer your questions? Are they engaging with the community in a warm and open way? 

• Do they have a strong presence and connections in the Web3 Twitter? Are they taking part in Twitter spaces and Discord hangouts?

Team TLDR

🚩 Anonymous and popped up out of nowhere.

🚩 Have no demonstrable experience in crypto or any other industry.

🚩 They inspire the worst in their community, have fake followers, and are constantly pumping the price.

⚠️ Anonymous but have demonstrable experience or have already made successful NFT projects.

💚 Doxxed and have demonstrable experience related to the project.

💚 Dedicated to the project across all socials.

💚 Ready to engage with the community and answer questions.

2. THE COMMUNITY

The team is what makes an NFT project solid, but the community is what ultimately makes it great. 

First, look at how the team is trying to build their community. 

🚩 Are they pumping their Discord and Twitter numbers with bots? 

🚩 Are they shilling (aggressively promoting) their project in a cookie-cutter way? 

🚩 Is the community encouraged to spam other people’s DMs? 

🚩 Are they relying solely on sponsored posts and giveaways every other day?

🚩 Is their allowlist a constant grind based on hype?

🚩 Are people who ask reasonable questions accused of spreading FUD (fear, uncertainty, and doubt)? 

🚩 Are they constantly discussing the price of the project?

These are all red flags. True community is built over time, organically. Communities come together based on shared values - if the only value they share is floor price, this is not a community you want to be involved in the long term.

When it comes to community, you’ll need to spend some time in the project’s Discord and Twitter to figure out the vibe. Look for communities that:

💚 Support and welcome newcomers.

💚 Don’t shame people for cashing out.

💚 Have organic engagement and team members involved in conversations.

💚 Hold Twitter Spaces and Discord events with other communities and relevant industry players.

💚 Engage in quality conversations and share resources and knowledge freely.

💚 Have a good balance of genders and are dedicated to inclusivity.

In general, when you jump into a good community, you’ll know it. It’s a special vibe! 

PRO TIP: Trust your spidey senses - NFTs might be a new technology, but people are people. Rely on your intuition and past experiences and keep these green and red flags in mind!

3. SOCIAL PROOF

Remember how you first heard about a particular NFT project. Was it recommended by a good friend you trust? Or was it shoved down your throat by an influencer?

Here are the red and green flags you can encounter when it comes to projects on social networks:

🚩 The project is often paying influencers and celebrities to shill the NFTs. Celebrities supporting a project will bring attention to the NFTs, but in the end, it often comes down to them getting a quick payout, regardless of the future success of the project. 

🚩 They airdrop their NFTs or tokens to famous wallets so it appears these crypto influences are supporting the project.

🚩 Their Twitter replies are all bots or people hyping the project with no more substance than “to the moon!!!”. 

💚 The team establishes real partnerships with NFT projects and Web3 orgs with a proven track record.

💚 Trusted crypto influencers organically support the project even if they have no stake in it. Try to look for respected and knowledgeable sources you trust. Intelligent and informed commentary on the project from multiple trusted sources is a good sign. 

💚 The team appears on podcasts and does events in other solid communities.

💚 The community organically produces fun content (derivatives, memes) based on the project.

💚 The community is openly supportive of the project on socials in a mindful way.

PRO TIP: If the project’s Twitter looks weird - do an audit to check how many of the project’s followers are real - buying followers is never a good sign.

4. ART AND UTILITY

NFT projects that give the holder exclusive perks are much more likely to maintain or accrue value. That utility can be access to educational content and mentorships, online events and communities, in-game utility, future airdrops and similar - it will depend on the project’s goals and mission. 

Quality NFT projects will usually offer a combination of different perks and the best ones will foster strong connections and a sense of belonging in the community. Others offer immersive world-building or are tied to a piece of intellectual property. 

Though utility is great, minting an NFT simply for the art itself is still a good way to support artists, grow your collection and maybe get yourself a fun new profile picture. 

Here are some things to look out for when it comes to art and utility:

🚩 The project is a copycat and imitates the style of other successful NFT projects.

🚩 The project is not sharing a lot of art sneak peeks or the sneak peeks look unfinished.

🚩 There’s nothing special about the utility - it’s cookie-cutter stuff every NFT project offers.

💚 The art is original, well-made, inclusive.

💚 The artist is well-compensated and supported by the team.

💚 The utility is locked in before the mint - it’s more than a promise.

💚 You actually need/want what the project is offering.

💚 The perks and other utility are tangible and more than just a way for a project to appear trendy/legit.

PRO TIP: Art and utility are important for NFT projects, but anyone can promise utility before actually having to execute a plan. Look for projects that are delivering real value to their community even before their mint.

5. THE ROADMAP

A compelling roadmap for an NFT project will be original but not unrealistic. Clearly outlined plans, such as a future drop for NFT owners, give owners a reason to stay in the game for longer. 

The roadmap will vary based on the goal of the project: some are focused on building a social club, some want to onboard and educate newcomers, some are building games in the metaverse.

Here are some good signs for a roadmap:

💚 The project has a clear mission (eg, gender inclusivity) and their roadmap reflects that mission in every step.

💚 The roadmap is unique in some way - it’s become a must for NFT projects to have a roadmap, but many will copy/paste bullet points. Look for those that break the mold.

💚 The founders are transparent about funding and allocation for profits - it’s a big plus if they use the profit from minting to further support the project.

💚 The team has the experience needed to execute the roadmap.

💚 Has the team already delivered on some aspects of the roadmap? That’s usually a good sign they’re invested in the project and want to keep it going.

💚 The website is well-made and there are no typos or errors.

Time to mint!

Now that you’ve done your research, managed to avoid scammy projects, and found a perfect NFT project for you… Congrats!

Remember to triple-check that the link you’re using to mint comes from official announcements or the official Twitter account. If you’re buying on secondary markets like OpenSea, check for verified accounts.

Any questions? Want to share some red flags that you’ve noticed when researching NFTs? Share your thoughts and questions on the Surge Discord or hit us up on Twitter!