NFTs: a 5-step framework to assess & pick a collection
A glimpse into the O-score formula
Hi, I am Othmane, an entrepreneur who strongly advocates for Web3 and NFTs spaces as I believe we’re happily witnessing a social, economic, and innovation breakthrough.
Web3 is the first opportunity to align content creators with their audience by engaging them both financially and emotionally!
NFTs are an innovation that tokenizes, everything with an intrinsic value, or an appreciating one, at scale with shared upside potential through unique assets on the blockchain.
Who’s this framework for?
- Enthusiasts keen on sharpening their approach to picking up NFTs projects,
- Web3/NFTs advocates,
- Anyone curious enough to learn more about web3/NFTs.
Why do you wanna read this?
I have built conviction, learned from my mistakes, and wanted to share these learnings with as many people as possible.
Factually, over the last month:
- I have watched 50+ hours on Youtube University to get better educated and I am active on 60+ discord servers.
- I have invested 100k+ USD from my own pocket within a month, with successes & failures in picking up the right projects.
This is my intake through a month of learning.
I have put together an O-Score from my learnings to better weigh in my decisions.
Hereunder are five blocks that build up to a formula helping me better pick my NFT projects:
O-score = 20 % (A) + 10% (T)+ 30 % (C)+ 30% (U)+ 10% (S)
Where sections are as follows:
- A = Art
- T = Team
- C = Community
- U = Utility
- S = Cultural significance
Each section (art, team, community, etc.) can have a score from 0 to 5.
- 0 being extremely poor appreciation.
- 5 being a strong positive appreciation.
The breakdown within each section can be scored. The sum of these scores adds up to the section’s score.
Each section score has a pondered weight applied to its score based on its relevance & importance.
The overall O-score is determined by each section score multiplied by its weight (more on that later).
1/ The ART (score from 0 to 5)
Quality: how do you feel about the art? (score between 0 to 4pts)
- Brand ability: does the character have potential collab leverage, i.e fashion, retail, music, community, entrepreneurship? What values does it display? What’s the underlying identification potential?(0 to 2 pts)
- High effort to make: easily doable or strong expertise needed such as 8-point grid, 2D, 3D or, animation? (0 to 1 pts)
- Aesthetically pleasing: is it appealing? Do you enjoy it? Is it harmonious? (0 to 0.5 pts)
- Rarity: what palette of traits is the collection built upon? How many different traits? (0 to 0.5 pts)
- Distinguishable: how distinguished are these traits? (0 to 0.5 pts)
Copyrights: who do they belong to? (score 0 or 1pts)
- Creator, (0 pts)
- Owner, (1 pts)
- CC0 (in the public domain, i.e no one owns it). (0.5 pts)
2/ Founders & Team (score from 0 to 5)
Public Image: (score from 0 to 0.5pts)
- Are the founders/core team public or anonymous? (0.5 pts)
Connections & XP: (score from 0 to 1pts)
- What’s the core team track record, relevance, and vision? (0.5 pts)
- Are there any upcoming partnerships or collaborations that can add leverage to the collection? (0.5 pts)
Audience Size: (score from 0 to 0.5pts)
- Do they have a brand, large following, interests? (0.5 pts)
Activity: (score from 0 to 3pts)
- How often do they engage with their community? (0.5 pts)
- Is their engagement relevant? (0.5 pts)
- Is moderation seriously taken into account (mods team, time zone layovers, channels segmentation, etc..)? (1 pts)
- Are they embarking on their community with updates on their roadmap/issues/votes? (1 pts)
3/ Community: what is it made of? (score from 0 to 5)
Real people or Bots (0 to 1pts):
- Check social engagement: likes, views, retweets, activity & reactions in discord. (0 to 1pts)
Most discords have +100k members with little engagement => +95% of bots & fake accounts to hype the project.
Flippers or Collectors (0 to 2 pts):
- A high amount of holders: items listed Vs collection items (ex:1000/10000). (1pts)
- Not obsessed with FP (floor price). (0 to 0.5 pts)
- Engaged with the future of the project and its roadmap. (0 to 0.5 pts)
Connections (0 to 0.5 pts):
- Smart, wealthy, famous individuals (0 to 0.5 pts)
Size (0 to 1.5pts):
- Discord members (0.25 pts),
- % of holders (0.25 pts),
- Social following (Twitter, Instagram), (0.25 pts),
- Discord: announcement Vs Members engagement (0.5 pts)
- Social media: retweets, likes & comments (0.25 pts).
4/ Utility & Roadmap (score from 0 to 5)
Utility is the fuel for the community and the strong layer on which a projet’s potential upside is built upon.
Utility is driven by:
Roadmap (0 to 2 pts):
- Comprehensive (reveal, art, play2earn game (P2E), future drops, perks & benefits, timeline)
- Metaverse footprint & platform: any headquarters in Decentraland or Sandbox for the community to gather, share and meet? Is there a platform built for holders?
- Community-driven (DAO based, whitelist spots for holders, interests)
- Charity donations to a cause of concern
- DeFi: Is there a token built for the project to allow different mechanics of rewards and upside?
Access (0 to 1pts):
- Parties & Events (gatherings, conferences, focus groups, vacations etc..)
- Partnerships (brands, artists, collections and privilege access)
- Exclusive Merch (privileged access to specific merch)
- Community (access to high-end profils within the community of entrepreneurs, athletes, coachs etc.)
Defi Mechanics (0 to 0.5 pts):
- Token Drops (derivatives of the collections, ex: cydog for cyborg)
- Staking (can you stake you NFTs, in a play2earn game for ex, against Tokens? Ex: Mobox or Zookeeper)
- Lending
- Fractional NFTs (is your NFT a fraction of a bigger piece, ex : Merge from Oak)
- Exchanges (footprint across different exchanges and volume: Opensea, Rarible, NiftyGateaway etc.)
Rewards (0 to 0.5pts):
- Merch (drops for token holders)
- NFT Airdrops (drops of other tokens)
- Community Rewards (content, access to next collection, free mint, etc..)
Perks & Benefits (0 to 0.5pts):
- Power-ups within games (specific features for the token holders within a P2E game)
- Game Advantage (speed, strength)
Dollars (0 to 0.5pts):
- Is the entry cost affordable? Mint price + gas fee.
- How are the floor price precedents? stable, appreciating, collapsed?
- What’s your target goal and your average expected holding time?
5/ Cultural Significance (score from 0 to 5):
- Generation: does it talk to a specific generation or is reminiscent of a past consumption (cartoons, games, habits, interests, etc..)? (0 to 3pts)
- Celebrities & Influencers (actors, artists, athletes, youtubers etc.) => going mainstream? (0 to 0.25pts)
- Social trends: search volume, YouTube, content? (0 to 0.25pts)
- Memes? (0 to 0.25pts)
- Social Trends? (0 to 0.25pts)
- Inspires other NFT (derivatives): art, utility, mechanics, roadmap? (0 to 1pts)
After going through these different blocks, I would assess a general opinion and score each point given my understanding & appreciation.
I would give the following ponderation:
- 20% to Art,
- 10% to the Founders & team,
- 30% to the community,
- 30% utility,
- 10% to the cultural significance
Feel free to adjust all the above to your preference.
Let’s assume each section scored the following:
A (Art)= 4.
T (Team)= 3
C (Community)= 5
U (Utility) = 4
S (Cultural Significance)= 3
That will lead to:
O-score = 20 % x 4 + 10% x 3+ 30 % x 5+ 30% x 4 + 10% x 4 = 0,8 + 0,3 + 1,5 + 1,2 + 0,4 = 4,2
I would invest in general where the O-score is above 4/5.
Last but not least, I track performance based on my assessment score and the collection floor price growth/decline to find a correlation that might lead me to filter or adjust this model.
Disclaimer: this is not financial advice. DYOR. This is MY personal way of evaluating projects and investing, it’s MY personal OPINION and you should always find your OWN!
If you’ve enjoyed reading this, you can follow me on socials where I post regularly on my thoughts, vision & experience:
- Twitter : https://twitter.com/osr720
- Linkedin: https://www.linkedin.com/in/nfts-web3/
Cheers,
Othmane
