NFT projects are often compared to investments in stocks. As is the case with stock ownership, owning an NFT often gives you some sort of ownership or access to unique project benefits, benefits that often increase in value over time. Moreover, as with stocks, some NFT projects climb in value while others fall.
Determining who’s behind the project will often help you determine whether or not the project is worth backing. Here’s what you need to know:
There Are 2 Types of NFT Project Teams
The crypto industry, whether it’s NFTs or cryptocurrency, is all about decentralization and anonymity, so, not all teams share their real-world past, which creates an interesting dynamic. It also draws a line between two distinct types of teams:
- Doxxed. Doxed teams share their real-world names, career histories, and other information about the people in the team.
- Undoxxed. Undoxxed teams are teams that use fictitious names and their proprietary NFTs as their online personas.
Which Should You Choose?
Traditionally, leadership that gives as much information as possible is the best bet, but the NFT industry is anything but traditional! There are some benefits and drawbacks to choosing to work with both doxxed and undoxxed teams.
Advantages & Disadvantages of Backing Doxxed Leadership
Here are the pros and cons of backing doxxed leadership:
Doxxed Leadership Pros
- You’ll have more insights into the past of team members. This often includes education and career information that will help you gauge whether the leadership team would stack up as leaders prior to the NFT industry and what skills each member of the team has.
- There’s little chance of a rug pull event, one in which an NFT project launches, collects a bunch of money, and the leadership disappears, rendering the collection useless.
- You’ll also be able to do your research on doxxed leaders to see if there’s ever been a financial criminal history.
- The idea of doxxing takes away from the core concepts of the metaverse, decentralization and anonymity.
- NFTs are a new industry. So, someone’s career history may not shed too much light on what they’re capable of in the future. Even worse, it might give collectors false hope that a once-successful person in one industry will be successful in a budding industry where they could fail.
Undoxxed Leadership Pros
- Keeping with the original decentralized concept behind the metaverse as a whole.
- Gives the collector the opportunity to ignore the leadership’s history in real life and focus on what that leadership team has done specifically in the NFT industry.
- Some undoxxed leaders in the industry have been in it since the first few NFTs were hitting the blockchain. These leaders often have a deeper understanding of the industry as a whole than most doxxed leaders.
- There’s potential for a rugpull event.
- You may be backing leaders with very different core values than your own.
The Secret to Choosing a Great Management Team
The secret to deciding if an NFT project’s management team is worth your support isn’t really a secret at all.
It’s all about research.
Whether the leadership team is doxxed or undoxxed, dive into their history in the NFT industry. Have they been part of any major projects like CryptoKitties, CryptoPunks, or Bored Ape Yacht Club? Have they been part of any rugpull projects in the past? What has the management team done to communicate with its audience? Are they active on Discord and other social media?
The above questions, and questions like them are the most important to answer when researching an NFT project’s management team.
The Bottom Line
The bottom line is simple. As is the case in the real world, an NFT project’s management team can make or break the project for collectors. So, when choosing a project to back, make sure you do some digging into its leadership before diving in.
That’s all for today, come back next week for the next lesson!