What are NFTs?
In order to understand non-fungible tokens, you need to learn the difference between fungible and non-fungible assets. Fungible assets are items that can be interchanged directly for each other, such as gold, bitcoins, crude oil, or dollars.
Assets that aren’t interchangeable are non-fungible assets. Plots of land, art and trading cards are non-fungible assets. Users can verify the authenticity of non-fungible assets by tokenizing them on the blockchain. For now, these assets can be traded through NFTs, including digital collectibles, art, and in-game items, but the possibilities for their future applications are endless.
It’s important to note that a non-fungible token by itself has no value. The value accrued from NFTs is from the media attached to it. For example, a CryptoPunk NFT is just as valuable as the CryptoPunk, and a plot of land on Decentraland accrues value from the location and size of the land within the virtual world.
Are Non-Fungible Tokens a Bubble?
Demand for sought-after NFTs is skyrocketing. Currently, the cheapest CryptoPunk game costs around 70 ETH, and the cheapest Bored Ape Yacht Club game costs nearly 80 ETH. Those are the lowest prices available on the market. You’ll need around 2000 ETH (about $6 million) for an Alien or Ape Punk of the highest tier.
With prices this high, it’s hard to not acknowledge the possibility of a bubble. However, CryptoPunks have been ingrained into art culture in a short amount of time, with Sotheby’s and Christie’s Art House both hosting auctions for CryptoPunks. Also, CryptoPunks were among the 1st NFTs on Ethereum, so investors see this as a historic project within the cryptocurrency industry.
Best NFT Projects In 2022
It’s important to do your own research before investing in a non-fungible token. These projects can be hard to value, and many NFTs are illiquid, meaning you may have a hard time selling your collectible in the future. Undoubtedly, many NFT projects will fail, leaving investors with a worthless JPEG.
CryptoPunks – Larva Labs
CryptoPunks were created in 2017 as one of the 1st non-fungible token projects on Ethereum. Each punk was algorithmically generated, and the collectibles were limited to 10,000 Punks. Human Punks are the most common, but there are other species of Punks. There are just 9 Alien Punks, 24 Ape Punks and 88 Zombie Punks. Alien Punks have fetched over $8 million dollars on auction.
Most Recent Alien Punk Sold: $8.06 Million
Axie Infinity – Highest Volume of 2021
Axies are the creatures used to play the popular blockchain-based game Axie Infinity. You need 3 Axies to play the game, so as the platform attracts more users the price of Axies will naturally increase. Axies vary in price depending on their attributes, but you can pick one up today for around $200.
Bored Ape Yacht Club – Yuga Labs
Bored Ape Yacht Club is similar to CryptoPunks in that these NFTs are commonly used as online avatars. The project features cartoon apes that have different attributes and rarities, and the cheapest Apes cost about 75 ETH ($250,000). Just a few months ago you could get your hands on an Ape for around 1 ETH, making this project 1 of the fastest-appreciating NFT collectibles in the industry. Since its inception, BAYC has airdropped token holders Bored Ape Kennel Club (BAKC) and Mutant Ape Yacht Club (MAYC) NFTs, which have accrued floor prices of 6 ETH and 15 ETH, respectively. Bored Ape Yacht Club also throws exclusive events for token holders, such as a private concert featuring The Strokes and Lil Baby in New York City.
Bored Ape Yacht Club recently sold for 400 ETH ($1.3M)
Meebits – Larva Labs
Meebits was launched by Larva Labs — the same company that made CryptoPunks. At the time of release, Meebits sold for around 2.4 ETH. Today, prices range from 3 ETH up to 100s of ETH, depending on the rarity of the Meebit. Meebits are intended to be used in the metaverse, as they’re 3-dimensional characters that can be used in open world blockchain applications.
Proof of Beauty Studios
Proof of Beauty is an innovative NFT project focused on documenting and celebrating the history of the Ethereum blockchain. Proof of Beauty’s first NFT series, HASH, allows users to take personal and historical blockchain transactions and turn them into beautiful NFT artworks. From Vitalik’s first Ethereum transaction to Jay Z’s Cryptopunk purchase, Proof of Beauty’s algorithm integrates the transaction metadata into color pallets, shapes and textures. Proof of Beauty’s second series, LONDON, is a sold-out collection of 8,888 generative art pieces. The London gift NFTs became available during the hard fork, and the first transaction that occurred post the EIP-1559 upgrade was a London NFT sale. Proof of Beauty began by documenting Ethereum history, and then they created it themselves.
A Proof of Beauty London Gift
Metaverse Land NFTs
Virtual Reality Land is one of the most unique ways to invest in nonfungible tokens. The 2 most robust virtual reality ecosystems where you can buy and sell land are Decentraland and The Sandbox. These platforms allow you to monetize your land through developing your real estate, and some investors have made casinos, amusement parks and NFT museums to monetize their land. Others simply buy this virtual reality land as a speculative investment to sell at a later point in time.
See our guide on the best metaverse investments, or a head to head comparison on Decentraland vs. The Sandbox.
Mutant Ape Yacht Club – Yuga Labs
The Mutant Ape Yacht Club is the follow up to Yuga Labs smash hit, the Bored Ape Yacht Club. While the Bored Apes are being hoarded by the celebrities and venture capitalists, the mutant apes offer a more affordable way to access the same network.
There are a total of 20,000 Mutants, including a handful of “Mega Mutants” with price tags as low as 3,000 ETH ($9 million). The Mutant Apes were made available to Bored Ape Yacht Club holders via an airdrop. All 30,000 apes (bored and mutant) were also granted early access to Adidas “Into the Metaverse” NFT project which currently reseIls for over 3x the retail price. It pays to be a member of this club, and investors see the value of MAYC with a price floor of around 15 ETH.
How to Buy NFTs
The best place to buy non fungible tokens is on OpenSea. This NFT marketplace has the most non-fungible tokens for sale, and you’re able to buy all of the previously mentioned NFTs through the platform (except CryptoPunks). To buy a CryptoPunk, you’ll need to use Larva Lab’s website.
To use OpenSea, you’ll need 2 things: an Ethereum wallet and Ether tokens. The best Ethereum wallet to use with OpenSea is MetaMask. It’s easy to set up via Google Chrome and easily connects to websites through your Chrome browser. If you don’t already have a cryptocurrency exchange account, you’ll need to make one to buy Ethereum.
