Author: William M. Peaster
Original source: Bankless
Compilation of the original text: The Way of Defi
Author: William M. Peaster
Original source: Bankless
Compilation of the original text: The Way of Defi
When it comes to great NFT projects, we see talented creators, innovative mechanisms, and vibrant communities as important factors.
What are the characteristics of a bad NFT project?
Below, I’ve listed thirteen red flags you need to keep in mind as you explore new NFT projects, and they range from issues of negligence to outright manipulation, so let’s protect our wallets.
Red flag 1: Untenable minting (mint) prices
There is a lot of space as to what is a "reasonable" NFT mint price, and there is no single right answer here. However, if a new team is charging significantly more than its "predecessors" or similar projects, it is a sign that they may be more concerned with taking your ETH than anything else.
Red Flag 2: Suspicious Social Media Activity
An NFT project sends you a message out of the blue to direct your attention to an upcoming NFT sale, such as an advertising tweet you saw about a few hours ago. Now you click on the project's profile and find out that (1) none of the people you follow follow the project, and (2) this new project has a large (unusual) number of followers. These are red flags! Good projects don't get personal attention through private messages or using Web2 ads, they get organic traffic and don't need to buy followers.
Dangerous signal 3: Deliberately maintain the floor price
If you see project leaders discussing or trying to maintain a floor price for an NFT, you should get out of the place, they're just running a financial scheme with little real interest in cultural value or community. This insincerity will affect all their troubles in the future, so be careful.
Red flag 4: Misuse of Discord
In a worrying situation, the NFT team chose to ban his Discord account when a community member asked legitimate questions. You want to see projects that are inclusive and forthright, not combative and secretive. There is no good reason for teams to abuse their moderation responsibilities.
Red flag 5: No audit
Audit reports from security companies are not perfect, but they do provide some basic security checks. If you are in Web3, you want to use audited DeFi and NFT projects, because unaudited infrastructure is more likely to be attacked or exploited. The problem is that every audit firm has been overwhelmed with demand lately, and some new NFT projects don't want to wait forever, and thus seize the opportunity by launching unaudited infrastructure. And we, should treat such projects with corresponding caution.
Red Flag 6: Bad Design
A poorly designed project can lead to bugs, inefficient gas, exploitable mint, and more. Measuring bad code, etc. is difficult for novices and a lot of non-technical experts, so following those who know the trick and learning from their judgment will be key.
Red Flag 7: Low-Quality Art
If you ever come across an art project that looks like it was conceived and completed in an hour by the Fiverr content platform, chances are it’s something like this. So, if the NFT teams themselves don't take their content seriously, why should you? Remember that there is a huge gulf between tasteful/charming/funny/weird minimalist work and kitschy trash. You can make a judgment call, but in my experience, projects in this range tend to be bad.
Red Flag 8: Selling Whitelists
A new thing I saw recently is that NFT teams are selling their NFT minting whitelist, wow! It's just a cash grab, plain and simple, and I personally see no justification for it.
Red flag 9: Being too optimistic
Have the creators of new NFT collectibles said their creations are "blue chip quality" and will be the next Bored Ape Yacht Club? Is the project’s roadmap a metaphorical run to the moon, or is it claiming something outlandish, such as claiming it will be the first actual lunar NFT marketplace? Avoid mere rhetoric.
Red Flag 10: Completely Anonymous Teams
There is nothing inherently problematic about having a completely anonymous team, people have a right to privacy and in many cases the quality of the project and code base etc will speak for itself. However, in the worst case, completely anonymous teams can cause serious damage, such as disrupting liquidity, and then have little to no liability.
Red flag 11: Lack of track record
If an NFT project team lacks experienced NFT veterans, the project is more likely to be eliminated.
Verifying your code with Etherscan assures the public that it is working properly on Ethereum. The use of unverified smart contracts means that you have no basic performance guarantee, so this is something you must pay attention to during NFT activities. For example, you can see how the Cool Pets smart contract is verified by its checked state. Just be careful with items that don't have a similar checkmark.
in conclusion
Suppose a project with a total of 10,000 PFP avatars caught your attention, but when you see its OpenSea collection page and notice that the ownership of the project is distributed among hundreds of addresses, then you must be careful, This means that these individuals can have a significant impact on this collectibles market.
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