We are encountering very successful NFT projects with high trading volumes while there are also a lot of failed NFT projects. But, why some NFT projects are failed? Let’s answer this question together!
What is a Failed NFT Project?
Firstly, we must explain a failed NFT project. If an NFT project is called ‘failed’ or ‘unsuccessful’, the main subject is the projects’ floor price. For example, think about a project that lost its floor price by 90% in the first 6 months of its launch. This example is showing a failed project.
Sometimes, the low floor price can contribute to the rise in the number of holders of an NFT collection, but this situation does not mean that the project is not failed. Although the number of holders increases, low floor price shows that there is probably an unsuccessful project.
In addition to the floor price, we can mention NFT projects’ trading volumes to understand whether a project is failed. If a project’s trading volume regularly decreases during a time period, we can say that it is failed. For instance, CryptoPunks is a very popular PFP NFT collection, and the collection’s trading volume is high. Hence, we can indicate that the collection is successful, and the possibility of failing for CryptoPunks is low.
What are the Key Reasons Behind a Failed NFT Project?
For an NFT project’s failure, the first reason can be the existence of an ineffective team. As you know, lots of NFT projects are a product of a team work. Generally, NFT teams involve one or more designers, blockchain developers, community managers, content creators, and so on. If one of these persons does not consider the project and pay enough attention, the project can go to failure.
For preventing failure, a project’s head must create an organized, planned, knowledgeable, interested, dedicated, and logical team.
As an investor, you should search NFT projects’ team before purchasing from them. As a project head, you should communicate and fill your available positions with experts in the field.
In the virtual world, we are encountering similar NFT projects. For example, a lot of teams imitate popular collections, like BAYC and CryptoPunks. This circumstance shows that most NFT teams do not consider creativity, and this is very critical to be successful.
In addition to imitations, utility is another side of creativity. NFT projects generally offer similar utilities or do not offer any utility, and this makes investors unhappy. Due to these two circumstances, NFT projects should provide aesthetic, artistic creativity, and extra features.
As a project head, you can present some different utilities for your community/holders. As an investor, you can check the whitepapers and roadmaps of projects to understand their utilities and features. In our opinion, you should not prefer imitations because these projects can cause the losing of your money.
As you know, every company must develop proper marketing strategies to increase their sales and reach their target audience. The same situation is also significant in the NFT space.
If an NFT project does not utilize necessary marketing ways to promote itself, it probably goes to failure. At the recent time, we are living in a world with full of social media, so digitalized marketing strategies are very important for promotion. For that reason, we are suggesting the consideration of marketing on social media to NFT project teams.
As a project head, you can check the marketing strategies that are adopted by successful projects. Furthermore, you can reach some NFT influencers for promotion. As an investor, you should invest in active projects on social media.
Most NFT lovers consider the community size of projects before investing in them. Due to the circumstance, we can say that NFT projects might fail due to their weak communities.
As a project head, you should try to increase the number of people in your community. Especially, you must consider the number of people in your Discord and Telegram. Also, the number of followers on Twitter is important. As we emphasized above, you should utilize digitalized marketing strategies to strengthen your NFT community on social media platforms.
As an investor, you should not invest in projects with a very small community. Generally, the small communities present the existence of a scam. Furthermore, you can examine the loyalty of an NFT community before purchasing.
We explained some key reasons that cause the failure of NFT projects. The number of reasons can be increased, but you can realize that there are important relationships between these reasons. Therefore, you must consider all reasons to not encountering failure in the virtual world.