How to Do Your Own Research (DYOR)
Here’s how you can evaluate an NFT project and (hopefully) pick winners
You will frequently see some sort of recommendation followed by a “DYOR – this does not constitute financial advice” disclaimer to avoid backlash if you decide to listen to them and lose money on the project.
The reality is, for anything you plan on buying or investing in, you should always perform your own due diligence. NFTs are no different. It’s best to be cautious because you alone are responsible for your investments and financial well-being!
These steps increase the chance of being more successful in identifying quality projects while avoiding rugs.

1. Preliminary Evaluation

Firstly, ask yourself: Do you like the art, collection size, mint price, and foundational project elements? Here are some important questions to consider:
  1. 1.
    What is the value proposition of a project? Is there a future utility (a game, a token, an airdrop, breeding mechanics, exclusive access/membership, etc.)? As the space evolves, the presence of differentiators continues to become more and more essential to success.
  2. 2.
    How have similar collection sizes performed recently? Compare in terms of hype, following, and mint price. Too many projects struggle to correctly price the mint, which can ruin the project before it even gets off the ground.
  3. 3.
    What is the community like? Is there a large and ACTIVE Twitter following or only a couple hundred people on Discord? Having a huge number of followers isn’t essential to success, but it does offer credibility. Equally, be aware of followers-for-pay scams and programs that can artificially inflate numbers.
  4. 4.
    Are there any identical projects out there? Whether on a secondary market or an upcoming mint. Is it just a copycat or is there something unique that adds value? If you can’t answer that question, it’s probably worth passing.

2. Assess the project's potential and team

Look at the project’s website. Key factors in the evaluation include the roadmap, project team, overall thoughtfulness, and website quality. It is usually pretty easy to tell if a site was thrown together for a quick cash grab. A team that spends a lot of time making sure their website (and socials) are all consistent, clear, and free of errors is often indicative of the quality of the project.
If a team’s baseline website and marketing materials are high quality, it is more likely than not they will apply the same type of diligence on future items on the project’s roadmap.

Roadmap

A well-articulated plan can put collectors at ease before buying into a project. Every collector has criteria for a “good” roadmap: royalties, utility, project tokens, charity donations, merchandise, community spaces, and many others. There is no right or wrong answer here. Your evaluation should be aligned with what you are looking for as a collector.

Team

Is the team public about their identities (e.g., links to their Twitter, LinkedIn, Discord)? Creators doxxing themselves isn’t required but having a positive reputation in the crypto world goes a long way, even if the person chooses to remain anonymous. I look for team members with past Crypto/NFT experience, relevant skill sets/backgrounds, and a passion for the project.

3. Evaluate their Twitter and Discord

With so many ‘paid promoters’ of projects, it can be challenging to evaluate the authenticity of projects. Identifying projects with large followings and communities versus the projects that only appear to have large projects and communities can be difficult and require time and effort.
It is more important to look at the quality of the followers by getting a feel for their level of engagement than it is to look purely at the numbers.

Twitter

For example, check out how many people are replying to tweets instead of the number of retweets (which can be easily bought). It is also important to scroll through some of the likes and retweets and validate that the accounts are real, have real profile pictures, bio, and are regularly tweeting from their accounts (not just entering in paid promotions and giveaways).

Discord

Similar to Twitter, bots can easily be bought as part of paid promotions. I like to check the general chat channels and see active discourse from many engaged users, as well as evaluate the number of “online” users as a percentage of total members of the server (paid bots often default to offline after the initial ‘join’). I aim to see between 10-30% online depending on the project size and time of day.

4. Don’t underestimate your gut feeling

There are so many scams and rugs out there, even some that are well put together and may even get past the first three steps above. You need to trust your instincts. If a project seems too good to be true, it probably is. ALWAYS use a “burner” wallet with only the amount required NEAR to cover mint cost plus fees (with no NFTs in it).
Some projects have stealth mints with limited warning and sell out instantly, so it can be challenging to get a feeling for the authenticity and requires quicker decision-making. While others have slower mints that allow you to evaluate minting progress and perform a deeper dive into Twitter and Discord for confirmation of a project’s legitimacy.