NFT tutorials for beginners: a must-see knowledge for newcomers
Recently, Christie's, the world's leading auction house, sold its first NFT-based artwork, a collage of 5,000 images taken by digital artist Beeple over a 13-year period
The work will be the first purely digital NonFungible Token artwork to be offered in this way, and in less than 15 minutes after the official opening of the auction, bidding for the work had already reached $1 million. It has now reached a staggering $69,346,250.
Prior to that, another crypto-art NFT piece by Beeple, CROSSROAD, sold for $6.6 million on the secondary market, setting a new record for an NFT artwork at auction.
The reason that almost everyone in the cryptocurrency community is talking about NFT these days is that NFT represents the future of digital content, an on-chain programmable, tradable, license-free and DIY "digital Lego" for the digital age. These "digital Legos" are a game changer for creators of all shapes and sizes. It's one thing to talk about this new thing in the digital age, it's another to try to add NFT to your portfolio, and look at billionaire investors like Mark Cuban (owner of the NBA team Dallas Mavericks) and Chamath Palihapitiya (CEO of Social Capital, a leader in leading the U.S. retail investor beatdown of Wall Street institutions) With billionaire investors bearing the brunt of the NFT economy, how should you too participate in this once-in-a-lifetime event?This article will show you how to build an NFT portfolio in a variety of ways, including buying NFT directly, buying NFT platform tokens, or buying NFT index fund tokens. Of course, we still need to do our own research work, and this guide just provides some ideas on how to get started.
Goal: Add NFT to a crypto portfolio Skill difficulty: easy or intermediateStudy time: 15-30 minutes
There are many ways to get exposure to NFT, and you can choose what works for you to grow your portfolio. The easiest way is to buy NFT assets in your psychological price range from projects and creators that you think are worth watching, and you can manage these NFT assets in the same way you manage ERC20 tokens, for example through a hardware wallet or a browser wallet like MetaMask.Beyond that, there are some interesting ways you can get involved in the NFT ecosystem. This article will expand on all the main options so you can start designing your own NFT strategy.
Direct ownership of NFT assets
Ethernet already has several general-purpose NFT marketplaces like OpenSea and Rarible that aggregate NFT across the ecosystem, thus allowing users to purchase various NFT assets through a simple user-friendly application interface. In addition, there are specialized NFT marketplaces such as SuperRare and Nifty Gateway, which are dedicated to NFT crypto artwork. You can buy NFT artwork through these two platforms, but before you can do so, you need to have some ETH ready to buy or bid on these NFTs.Marketplaces like OpenSea allow the buying and selling of many tokens, with ETH usually being the main currency traded. You also need a browser wallet like MetaMask so that you can interact directly with smart contracts on the NFT marketplace.
Once you have your cryptocurrency and wallet ready, you are ready to go shopping. Head to the market of your choice and connect your wallet, then you can start collecting those NFT assets. Set a budget and then look for NFTs that are within your psychological price range. Some NFT assets that catch your eye can be extremely expensive, and allocating these NFT assets right or wrong is hard to judge. You need to be aware that NFTs are extremely illiquid assets, so investing in these assets does not guarantee that you will make a profit.The safest approach is to only buy NFTs that you personally think are really cool or unique, and that you won't mind holding onto for years at a time. The potential benefit of this approach is that others may also eventually find your NFT really cool and make a sizable offer at some point in the future.
You can use NFT market data sites such as NonFungible to analyze NFT price trends and recent market activity.
Ethernet ERC20 tokens can represent anything through asset tokenization, so we'll see many ERC20 tokens around the NFT ecosystem. For example, governance tokens like Rarible's RARI or Axie Infinity's AXS. These are all NFT-focused projects and therefore likely to benefit from the NFT boom.These tokens allow holders to govern these projects from the bottom up and own them together as a community, rather than being owned by the company.
If these NFT projects are able to achieve significant growth, then there will be a corresponding increase in demand for their governance tokens. Buying these tokens on a DEX like Uniswap is one way to gain exposure to the NFT ecosystem, although these particular assets can also be acquired by participating in their ecosystem (e.g. buying and selling on Rarible or playing Axie Infinity regularly).
Next are some functional tokens, such as the Meme protocol's MEME, and the Sandbox gaming platform's SAND token. The term functional tokens refers to the fact that these assets offer some advantages or uses to the holder, and some features cannot be accessed without holding them. For example, the Meme protocol is an NFT liquidity mining project that requires users to pledge MEME tokens in order to receive NFT airdrops, while SAND tokens are used to pay for Sandbox games natively.These assets capture the growing demand for these NFT projects, so they are another alternative investment path.
The final category of NFT-centric ERC20 tokens are fractional ownership tokens, such as NIFTEX's sharded NFT, or Metapurse's B20 token.
NIFTEX is a platform that allows users to convert their NFTs into easily tradable and liquid ERC20 tokens, so it is a good way to go when it comes to splitting ownership of NFTs, and it already has about 20 NFT split marketplaces to choose from.
A similar idea has been adopted by Metapurse's B20 token, which has split the ownership of The Beeple 20 series of artworks. With the Beeple's work coming to auction at Christie's, this could be a unique way to acquire its artwork.
If you think the value of the underlying NFT will go up, then fractional ownership tokens are an easy way to get it.
More and more NFT holders are interested in pledging their NFTs on NFT collateralized lending platforms like NFTfi to lend out cryptocurrencies. The point of this play is that you can lend cryptocurrency on a P2P basis to users who pledge NFT assets and earn interest on it. If the borrower defaults on the loan, you get access to their collateralized NFT assets.
This sounds like an NFT x DeFi hybrid model where you can navigate to NFTfi's lending page, connect your browser wallet, and then lend against any NFT collateral requests listed to your liking.
We have started to see the rise of NFT index funds that track NFT assets. One of the pioneers here is NFTX, which focuses on building index funds to track the price of specific NFT classes such as Zombie CryptoPunks or Origin Axies.In other words, if you want easy, fluid access to Zombie CryptoPunks in your portfolio, you can purchase a small portion of the PUNK-ZOMBIE token, and the same goes for the ORIGIN-AXIE token when you want to participate in Origin Axies.
These NFTX index funds are currently highly liquid on Sushiswap and are available for trading including
PUNK-BASIC: Track the lowest price of CryptoPunks.PUNK-FEMALE.
Track the lowest price of Female CryptoPunks.
Tracking the lowest prices of Zombie CryptoPunks.
Track the lowest price of CryptoPunk for 4 attributes.
Track the lowest price of CryptoPunk for 5 attributes.
Index funds consisting of various CryptoPunks indices.
To sum up
The NFT economy is heating up at an unprecedented rate and people are realizing the potential of these assets. As such, any savvy crypto investor should consider how they can participate in the current boom.
There are currently many ways to participate in the NFT economy; you can invest in NFT directly, buy NFT-centric ERC20 tokens or NFT index funds, or even lend cryptocurrency to borrowers who wish to use NFT as collateral.
Of course, all approaches here are risky! So be careful when investing in new assets and approach your NFT strategy with a great deal of due diligence and consideration of risk.
If you put more thought into your NFT collection, you'll have more and better chances of creating a strong NFT portfolio!