NFTs – The New Money-Making Machine (Podcast 105)
In this episode we’re discussing how crypto enthusiasts are making money out of NFTs. Stay tuned to hear about play-to-earn gaming, how NFT projects can be profitable, and things you need to be careful of when investing in NFTs.
- While there’s money to be made in NFT projects, they are not all good investments. You’ll need to do some research and investigate every potential opportunity
- The lack of regulation in the NFT space leaves the general public vulnerable to being scammed
- The internet is currently split on NFTs and cryptocurrency, some seeing the obvious opportunity and others showing concern
One of the most popular ways to use NFTs is in game play. Video game developer Sky Mavis’ Axie Infinity is built on the Ethereum blockchain and is played with in-game NFT characters known as Axies that battle with strategic moves and in-game cards to earn Smooth Love Potion – the in-game currency. To get started, players invest an initial few hundred dollars to buy their first 3 digital characters. AXS, an Axie Infinity coin can be used to breed Axies, as users often opt for combining two of their strongest Axie to flip on the marketplace for a profit.
The barrier of entry to Axie can often be too high for players in the developing world as it requires an initial investment to get started. Scholarships have grown in popularity. Axie University in the Philippines aims to buy and breed Axies to rent to new players & support them to hop over the mandatory initial investment.
Meanwhile over in The Sandbox, a viral metaverse giant, creators contribute to what will be the metaverse, more opportunities are arising. The Sandbox has another way of monetising NFTs. Players are able to equip their avatars with gaming accessories that they can use in the Sandbox metaverse. Also built on the Ethereum blockchain, gamers create and trade digital assets while creators build 3D games without writing a single line of code.
The currency generated in this game, SAND coin, is used for game play, purchasing NFTs, governance via the community DAO and staking for rewards and accrued interest. In the Sandbox, NFTs provide proof of ownership and help to facilitate fair trading. Users can purchase digital land and effectively own digital real estate in the Sandbox. Players and companies from all over the world have already started snapping up some of the 166,464 parcels of land available.
Despite the obvious opportunity, NFT projects are still quite expensive to invest in and require both disposable income and savvy market analysis. Smart contracts are often written into the individual NFTs to establish a baseline of profit with conditions about royalties and subsequent sales.
Where there is opportunity there are also growing pains, and NFTs despite being a huge technical innovation also pose problems. While there is money to be made, this space is largely new and unregulated, so it comes with some volatility. “The Line Goes Up” a feature length documentary about the viability of NFTs and the longevity of cryptocurrency by Dan Olson of Folding Clothes on YouTube has sent shockwaves into the NFT space.
Olson, like many other critics, delivers a rather scathing review of both the NFT and cryptocurrency space, splitting the internet into two heady groups of skeptics and believers. While there is no denying there’s a lot of money to be made in the NFT space, there isn’t currently enough regulation to make the space safe enough for everyone to invest. Investing in NFTs can take a few forms, whether it be investing in a popular project like Bored Ape Yacht Club or Cunning Wolf Society, or creating and minting your own digital NFT collection with our NFT Collection Generator (link).
Due to the lack of regulation, NFT heists – or rug pulls have become more common. This happens when a crypto enthusiast or organization builds an online persona using a popular NFT image, garners a following on social media, usually on Twitter and creates a Discord channel with very little substance and predatory marketing tactics. Shortly after all the available NFTs have been sold, the organizers then delete everything from their servers, the discord channel and any accompanying websites, along with any assets you have purchased. Then rinse and repeat, as the culprits are basically free to run this scam again and again.
Experts advise really taking the time to look into each NFT project offering, try and identify the key members of the community outside of their social media presence, take note of the engagement level in the discord channel for example and investigate the project’s mission. How will their collection add to the conversation? Does their artwork look cool or unique?
Are they offering anything beside the digital asset?
The Cunning Wolf Society is currently developing a data tool that they’ll be sharing with their NFT buyers that helps them investigate the market and identify trends for free. This is a good example of an investment into their buyers and community and an indication that this project is not just out to make money.
Want to create your own NFT? It’s easy as pie with Appy Pie’s No Code NFT collection generator! Design unique and innovative digital pieces without writing a single line of code. Using the power of AI, mint your digital creations with our easy to use the tool. With a choice of blockchains to mint your NFT on, support for airdrops, and initial offerings, our NFT collection generator is easily scalable and secure. Sign up and start collaborating with fellow designers today!
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