How to Analyze Solana NFT Projects: Checklist Revealed

Project analysis is key to success in NFT investing. The ability to identify good projects reduces losses and increases profit opportunities. In this guide, we’ll explore systematic methods for analyzing Solana NFT projects.

The Importance of Project Analysis

Countless NFT projects emerge every day. Most of them fail or turn out to be scams. Investing without systematic analysis can lead to significant losses.

Good projects share several common characteristics: a trustworthy team, active community, clear vision, and real utility. Systematically checking these elements can improve the quality of your investment decisions.

Investing time in analysis is ultimately protecting your money.

Team Analysis

The project team is one of the most important evaluation factors.

Check if team members’ identities are disclosed. Anonymous teams carry higher rug pull risks. While not all anonymous teams are bad, disclosed teams are more trustworthy.

Research team members’ backgrounds. Check their backgrounds on LinkedIn, Twitter, etc. Industry experience and previous project success cases are important.

Review the team’s past projects. If they have successfully operated previous projects, that’s positive. Conversely, if they failed or had controversies, caution is needed.

Observe the team’s communication style. Check if they provide regular updates and sincerely answer community questions.

Community Analysis

An active and healthy community is a major asset for a project.

Check Discord member count and activity. Rather than just having many members, actual active conversation matters. Some inflate numbers with bots or fake accounts.

Analyze Twitter followers and engagement. Check follower count, retweets, likes, and comment quality. Purchased fake followers have low engagement.

Feel the community atmosphere. Determine if holders are positive about the project, trust the team, and have the will to hold long-term.

Verify organic growth. Suddenly spiking followers or members may be artificial. Steady growth is healthier.

Art and Design Analysis

Since NFTs are digital art, artwork quality is also important.

Evaluate the art’s originality. Check if it’s copied from other projects or has a unique style. Art similar to famous projects could face copyright issues.

Check the art quality. Examine resolution, detail, consistency, etc. Amateur-level art may have low long-term value.

Verify artist information. Famous artist participation becomes a premium factor. Research the artist’s portfolio and reputation.

Check trait diversity and rarity system. A well-designed rarity system adds depth to a collection.

Utility and Roadmap Analysis

Evaluate the value NFTs provide and future plans.

Identify what utility exists. Determine if it’s just a profile picture, game item, or has membership benefits. Specific and achievable utility is good.

Assess roadmap realism. Overly flashy promises should be questioned. Check if achievable goals are set in stages.

Review roadmap progress. Check if past promises were actually fulfilled. Teams that don’t keep promises are hard to trust.

Evaluate sustainability. Check if there’s a long-term revenue model such as royalty income, partnerships, ecosystem expansion, etc.

Tokenomics Analysis

If a project has its own token, tokenomics must be analyzed.

Check total supply and circulating supply. If too much volume enters the market, there’s downward price pressure.

Review token allocation ratios. If excessive allocation is given to the team, caution is needed.

Check vesting schedules. Identify when team or investor tokens unlock. Mass unlocking can lead to price drops.

Verify token use cases. Distinguish between tokens with actual use cases and those for pure speculation.

On-Chain Data Analysis

Using blockchain data provides objective information.

Check trading volume and floor price trends. Determine if long-term trends are rising or falling.

Review holder count and distribution. If whale concentration is too high, there’s price manipulation risk.

Check listing ratio. If the ratio of listed NFTs to total supply is high, there’s selling pressure.

Track whale wallet movements. Check if large holders are accumulating or selling.

Red Flag Checklist

Caution is needed if the following are found.

Anonymous teams with unverifiable backgrounds are risky. Be especially cautious if there are allegations of past rug pull involvement.

Suspect unrealistic promises. Guaranteed returns and exaggerated roadmaps are red flags.

Community censorship of criticism is problematic. Healthy projects accept reasonable criticism.

Unaudited smart contracts carry technical risks.

Sudden roadmap changes or promise reversals indicate low credibility.

Analysis Checklist Summary

For team: verify identity disclosure, relevant experience, past success cases, communication ability.

For community: check activity, atmosphere, organic growth, long-term holding intention.

For art: verify originality, quality, artist reputation, rarity system.

For utility: check specificity, feasibility, progress status, sustainability.

For on-chain data: check trading volume trends, holder distribution, whale movements.

Conclusion

Project analysis takes time, but it’s worth it. Investing without systematic analysis is like leaving it to luck. Use this checklist to make wiser investment decisions.

In the next guide, we’ll explore how to avoid NFT scams in more detail.