Purchasing your first NFT is a daunting task. Read this post to learn how to do this today.
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Since I started writing this newsletter, I’ve had a lot of people ask me about the process for buying their first NFT. I’ll walk you through the basics here today. The first thing to decide is what type of project you want to participate in.
A good entry point is through a sports collectible project. These are set up to feel like buying a physical collectible like a baseball card or frankly any other online retail purchase. You simply create a login and buy with a credit card for the biggest projects. You never even need to set up a Crypto wallet for these projects. You can get a basketball highlight on NBA Top Shot, a digital baseball or NASCAR card from Candy, or an athlete collectible from DraftKings. I’ve got a solid collection on NBA Top Shot and even got accepted into their new NFL All Day program, so I’m a fan of these types of digital collectibles. However, to get the full NFT experience you’ll need to go deeper.
What is the next step down the rabbit hole? You’re going to need to check out OpenSea, who is the leader right now in the race to be the eBay of NFTs. In the past month, nearly 500K people have transacted on OpenSea with over $4Bn in volume. There are currently 28 million items listed for sale on OpenSea. It’s huge. In an upcoming post, I’ll go through in detail who else is competing in this space. For your first NFT, I’d recommend you focus on OpenSea to start.
OpenSea works much like eBay. Anyone can create (or “mint”) an NFT of just about anything and post it for sale on OpenSea, much like selling a physical good on eBay. There is a fee to create an NFT, which is called “gas” in the NFT world, and then it is up there on OpenSea for anyone to buy. Just like eBay, items on OpenSea can be sold at a fixed price or put up for auction. Prices on OpenSea are quoted in Ethereum ($ETH) and can have a massive range from ETH 0.05 (about $150) up to ETH 100 ($300K) and even much higher.
The biggest drawback of OpenSea is you cannot buy an NFT with USD cash on a credit card or bank debit, only with cryptocurrency from a digital wallet. If you don’t have a wallet with some $ETH in it, you can read my prior post on how to do this here. Unlike eBay, you won’t need to set up an account with OpenSea. Instead OpenSea makes it easy to connect with your MetaMask wallet as your credential.
So now it’s time to figure out what the heck to buy. As I mentioned above, there are 28 million choices. OpenSea highlights hot new projects and top sellers on their home page. You can also see the projects with the biggest trading volume under Stats – Rankings. Unfortunately, the majority of these have really high entry prices. You’ll see a term called “Floor Prices” on the OpenSea site, this is the lowest offered price to buy a particular project. The Floor Price for a Bored Ape is about ETH 93 ($275K). The Floor Price for a CloneX is about ETH 13 ($40K). And so on. If this is your first rodeo with NFTs, you probably want to aim a little lower.
**OK it’s disclaimer time now. A common phrase in the NFT space is DYOR – Do Your Own Research. Don’t buy something because I own it or because anyone else tells you to buy it. Check out the project yourself. Look at their website and socials, see who the creators are, look at their price history. Figure out if you like the art and community, and only spend what you can afford to lose.**
You can see my current collection at my OpenSea profile here. I tend to buy projects around the sports sector. It’s what I do for a living with Beyond The Game Network, and I get to support companies our group has invested in. A couple NFT projects with low entry prices and fun utility are from SportsIcon and Fan Controlled Football.
The SportsIcon Lion Club is 10K artistic lions, all with sports themes. Owning a lion gives you access to monthly calls with sports stars like Floyd Mayweather and Baron Davis. They also have run a half dozen raffles for Lion Club owners to attend sports games like the Super Bowl, a Knicks game, and England World Cup friendlies. Even if you don’t make money flipping your lion, you can get some real value from it. The cheapest lion costs about ETH 0.03 ($100) today.
Fan Controlled Football is another project with a ton of utility. This is a real life 7-on-7 arena football league, where fans watching the action get to vote what plays the offense runs. It’s like playing the Madden video game with real players. I went to their games last season, and it was a ton of fun. They sold 8K of their Ballerz NFTs for each of four new teams for season two. Owning a Ballerz NFT lets you vote on things like your team’s logo, personnel, coaches, and more. These NFTs will also give you the opportunity to attend games in Atlanta this spring. I own some Ballerz from the Knights of Degen team, but there are three other NFT teams in the league you can consider. Ballerz also have a low Floor Price around ETH 0.06 ($200) today.
Do your research, find an item you like on OpenSea, and figure out what you want to spend. Make sure you factor in the $ETH gas fees, which typically runs about ETH 0.015 ($50) per transaction. Just like eBay you can “buy it now”, make an offer on something below the list price, or bid on an item in an auction. The ETH will be deducted from your MetaMask account, and the item you purchase will show up in your MetaMask wallet. It is now yours. You can digitally display it, put it up for sale, and even destroy it if you want.
One last quick note of caution is that while OpenSea makes everything look liquid and easily tradeable, these are really illiquid items. Think of NFTs like rare items on eBay. Some might see their values skyrocket, and others might be worthless. Just because something has value today is no guarantee of the future. Pick items you want to own and display. Find projects like the Lion Club and FCF Ballerz with real world utility you can enjoy. This way you won’t be as bummed out if the price drops a bunch.
Happy shopping! Give me a shout anytime if you want to chat about projects.