Over the last year I've gone from buying NFTs based on gut, to buying based on research and data. While gut is what got me into this space, and without it I would have likely never bought any of my Bored Apes, it's the analytics side of NFT investing that has kept me so interested.
Of course, as the NFT world has grown, so have the multitude of solutions for analyzing NFT investment opportunities. While I haven't evaluated all of the solutions out there, or even most of them, I have found one tool that has been pretty handy over the last couple of months - Nansen.ai.
Before I go any further I'll tell you there's no way I can do Nansen justice in one post, there are just too many features, and I'm still learning everything the platform can do. That being said, I think I can highlight one way I'm using Nansen to spot potential NFT investment opportunities, and then let you DYOR and take it from there.
At a high-level Nansen collects a lot of data about both NFTs and cryptocurrencies like Ethereum, Polygon and more. But that's not what has really hooked me on Nansen - what I'm really liking so far is their wallet tracking algos.
Essentially, Nansen has built algorithms to analyze wallet activity and divide people into different categories. For NFTs they have categories like:
- Smart NFT Minter
- Smart NFT Trader
- Smart NFT Sweeper
- Smart NFT Hodler
Each of these categories represents people (or organizations in some cases) that are at the top of their game in a particular category. What I've been getting particularly interested in is when someone does something different from the behavior they are known for.
For example. If a Smart NFT Hodler starts selling a bunch of NFTs from a particular collection - that's interesting. If there's a project I'm looking at minting but no Smart NFT Minters are jumping in, that's interesting too. And yes, while I certainly am interested in looking at people following the behavior they're known for, when they do the opposite, that's even more interesting, at least to me.
So back to the title of this article. I thought I'd share one positive signal I've been using, through Nansen, to spot NFT minting opportunities. Also before I go any further, don't expect this to blow your mind, I haven't come up with some game-changing formula for finding risk free mints that will just print money. That being said, I do think I've found one interesting way to get some signal above the noise of all the different NFT projects that are minting to hopefully spot some higher-potential projects.
What I've been studying lately to identify projects minting that might deserve a bit more attention are cases where three or more category of investor are minting, and one of those categories is a Smart NFT Hodler. For example - if a Smart NFT Trader, Smart NFT Minter, and Smart NFT Hodler are all minting the same project, that's a project that would end up on my radar.
My logic here is relatively simple. First - yes, the Smart NFT Minter will probably mint a lot of things - they've done well through mints and my guess is that likely has to do with minting a lot. So this particular persona gives the least signal, but if they aren't minting something, that's actually a relatively negative signal IMO. It's the activity of the other two categories that makes it interesting, when combined with the Minter.
If someone who is known for holding and trading is also minting alongside a Smart NFT Minter, I think that gives some meaningful signal that there's something to this project that has broader appeal.
The next step for me is to model this out and let the numbers do the talking. I would really need to see 10+ occasions where this combined positive signal leads to a minting a project that goes and stays above the mint price for a meaningful period of time. I'm still early in my own use and analysis of Nansen but I did think the current path I'm forging to discover potential minting opportunities was interesting enough to share.
Thanks for reading and happy minting!