Recently, the term NFT has become a craze in the global cryptocurrency market. Many investors have used it to buy and sell items in various fields such as gaming, sports, art, and more.

So what exactly is the term NFT? What is the development trend of NFTs in the future? How to choose a potential NFT project? And which projects are considered promising in 2022 for investors? All of these will be answered in today’s article by Forex.

Let’s begin!!!

Table of Contents

1. OVERVIEW OF WHAT NFT IS

So what does NFT stand for? In the cryptocurrency market, NFT stands for Non-Fungible Token, which means “Non-Replaceable Token”. It is considered a unique digital asset created and stored on the Blockchain.

NFT can represent an electronic asset, a painting, a song, or tokenized assets such as land, objects, game characters, and more.

To better understand what the term NFT means, you need to grasp the following two concepts:

Non-Fungible: “Non-replaceable,” the opposite of “interchangeable.” For example, you can exchange a 200,000 VND note for two 100,000 VND notes, which means they are interchangeable.
Token: A digital currency developed based on an existing coin. Currently, tokens are primarily created and used on the Ethereum blockchain.

1.1. What are the characteristics of an NFT token?

NFT stands out and differs from other types of assets due to the following characteristics:

Scarcity: Each NFT is unique and has no duplicates. This increases both its value and rarity.
Uniqueness: Each NFT has its own distinct features and is not duplicated with other NFTs. Additionally, artworks such as paintings, songs, etc., in NFT form are the original copies, ensuring they cannot be counterfeited.
Indivisibility: An NFT cannot be split into smaller parts for trading like other cryptocurrencies. For example, 10 BTC can be divided into 10 parts, but this is not possible with NFTs.

Furthermore, when conducting NFT transactions, you can verify their information through data on the Blockchain without the need for a third party.

1.2. How are NFT tokens applied in practice?

With the above characteristics, NFTs have been and are being applied in several fields. Some of the most notable applications of NFTs in practice include:

Gaming

NFT gaming allows investors to buy, sell, or upgrade characters and items in games without needing to spend money in the traditional way. Each item or character has its own unique token code, stored on the Blockchain. This helps avoid the loss of purchased items in the event of a server malfunction or attack.

Art

Each piece of artwork, such as paintings, photos, music, videos, etc., can be converted into a digital file with a corresponding token code and uploaded to the Blockchain platform. The artwork then becomes an NFT and can be traded as usual.

The biggest advantage of tokenized artwork is its ability to significantly reduce the risk of copyright theft.

Real-life example: The artwork Every: The First 5,000 Days by artist Beeple was sold as an NFT for a value of up to $69.3 million.

Digitizing Real Assets

NFTs are also used to tokenize real assets or intellectual property in various sectors such as: electronic tickets, domain names, real estate, and more. These assets are then stored and traded on the Blockchain as tokens.

Real-life example: Nike created a tokenized sneaker system to sell limited edition shoes.

1.3. Where to buy NFT coins?

Currently, NFT tokens are widely sold on cryptocurrency exchanges such as Binance, Huobi, Global, Coinbase, etc. To buy and sell NFTs, you need to follow these steps:

Step 1: Create a cryptocurrency wallet account and connect it with the NFT platform you want to use.
Step 2: Buy the NFTs listed on those platforms.
Step 3: Store the purchased NFT token in your digital wallet.
Step 4: Sell the NFT when its value increases to make a profit.

Some benefits you gain from owning NFT tokens:

The product is unique and guarantees copyright.
Transparent information, high security, as all data is stored on the Blockchain.
Direct transactions between the buyer and the seller without the need for a third-party intermediary.
Easily resell NFTs on the market for profit.

2. METHODS FOR CHOOSING A PROMISING NFT INVESTMENT PROJECT

While investing in NFT tokens promises many opportunities, it also comes with potential risks. Therefore, to choose a promising NFT project, you need to pay attention to the following factors:

2.1. The project has a large user community

Currently, most NFT token projects revolve around gaming models combined with earning money. Therefore, the project can only thrive if there is a large and strong user base.

Real-life example: The game Axie Infinity was able to grow rapidly in a short period because it attracted a large number of players. They joined the platform not only for entertainment but, more importantly, because it offered the opportunity to make money.

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So how can you determine if an NFT project has a large user community? The answer is by looking at the number of followers and interactions it has on social media platforms such as Facebook, Twitter, Telegram, etc. Besides the follower count, you should also consider whether the user interactions are genuine or just fake.

In fact, Twitter is the platform that attracts the most followers because users in Europe and North America tend to use this social network more. Additionally, it is a place where frequent updates and news about each NFT project are shared.

Aside from the number of followers, investors should also consider the quality of the community. You should choose a community where people actively discuss, frequently interact, answer questions, and share experiences with one another.

2.2. The founding and development team of the NFT token project

To attract users, NFT projects must have a unique appeal and differentiation from other projects in the market. The founding and development team plays an extremely important role. They are the strategists and visionaries who shape the future direction of the project.

To learn more about the individuals in the development team, you can visit the personnel section on the project’s website. Additionally, to gain a more objective perspective, you can look up the profiles of each member on LinkedIn. Typically, LinkedIn will have detailed posts about the biographies and achievements of notable figures in the blockchain gaming industry.

The development team of an NFT project usually has several positions. You don’t need to dive into the details of each member. Instead, focus on the three key positions: CEO (Chief Executive Officer), Game Design, and Community (Community Development Manager).

2.3. Price fluctuations of NFT tokens

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In addition to the two factors related to the investor community and the development team, the price history of an NFT token is also a very important evaluation criterion. By looking at the price chart, you can gauge the potential and level of interest from investors in a particular token. During your analysis, you should pay attention to two basic factors:

Token price at the time of IDO: At this point, the price of the NFT token is still relatively high. Therefore, you should avoid rushing to buy, as it is likely that the price may drop significantly afterward.
Price fluctuations over several days: This phenomenon could be related to issues with the game. However, if you believe the project is truly promising, you can still consider buying and wait for the price to rise again.

CoinMarketCap and CoinGecko are two platforms you can use to look up and monitor detailed price charts of tokens.

3. PROMISING NFT PROJECTS FOR INVESTORS IN 2022

In this section, let’s explore some of the most promising NFT token projects for 2022.

3.1. Decentraland

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This is an NFT game supported by Ethereum. In Decentraland, you can build a virtual world by using tokens to buy land and do whatever you wish. Additionally, with this platform, you will have full control over the assets you own and benefit from the earnings made through transactions on the system.

>>> Learn more about the project HERE.

3.2. Chiliz

Làn sóng Fan Token trở lại mạnh mẽ, mức tăng 170% liệu đã “tương xứng” với vị thế của Chiliz (CHZ)?

Chiliz is one of the few NFT coins that are worth investing in right now. This project is currently operating on the Ethereum Blockchain, with the platform socios.com functioning as a mini social network for sports enthusiasts.

Therefore, with Chiliz, you can participate in decision-making processes for several major sports clubs. For active members who contribute to the system, Chiliz has a dedicated reward mechanism.

>>>Learn more about the project HERE.

3.3. Axie Infinity

Đạt mốc 1 triệu người chơi mỗi ngày chỉ trong 3 tháng, Axie Infinity có thể trở thành đối thủ của cả Facebook, TikTok như thế nào?

Axie Infinity is an NFT game running on the Blockchain platform. When participating in this ecosystem, users collect and nurture creatures, then let them battle each other to build their own pet kingdom.

One way to make money in Axie is by competing in battles, collecting and investing in rare creatures, breeding them, and then selling them on the marketplace.

>>>Learn more about the project HERE.

3.4. The Sandbox – SAND

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The Sandbox is considered a virtual world game created with the aim of helping players build and monetize their gaming experience.

You can create NFT token assets, upload them to the Marketplace to sell, and earn profits. In addition, this ecosystem offers several products such as: VoxEdit for creating animations, Game Maker for building free 3D games, etc. Therefore, it is expected to be one of the promising and explosive NFT games in 2022.