Whether you’re a beginner with zero knowledge or you have more experience, here are 10 things you should know:
I personally recommend using the Phantom wallet for Solana and Solana NFTs. I believe they have the best product by far. One common mistake newer community members often make is only using one Phantom wallet. I have 10 wallets that use the same recovery phrase enabled by seamless switching between wallets within the Phantom interface.
Each wallet serves a different purpose:
- ‘Cash’ wallet: Stores all of my liquid $SOL and has no NFTs. I do not use it for anything other than storing $SOL and sending/receiving from my other wallets.
- Mint wallet: Prefunded with the exact amount of $SOL I require for minting. I immediately transfer my newly minted NFTs out after minting.
- “HODL” wallet: Stores the NFTs that I don’t plan on selling any time soon.
- Short-term wallet: A trading wallet that stores NFTs that I plan on potentially/selling listing soon
2. Research (DYOR)
Vet each project you plan to invest in thoroughly. Performing a thorough review enables you to get a feel for the project’s direction and is a key step in identifying potential red flags indicative of a rug and other fraudulent activity.
Follow the project’s Twitter, join their Discord and browse their website. Review and understand key project information, interact with the community, and ask questions to project leaders and community mods!
3. Secondary Markets
Assessing secondary markets after minting is extremely important. It’s often an opportunity to find some very good deals if you can wrap your head around rarity early.
Magic Eden is my favorite because of its screening process and user functionality. If a rarity tool is not available yet, Magic Eden has great filtering tools where you can see how many NFTs containing specific traits are listed for sale. Typically, the less of a trait listed, the rarer it is and the more it will be worth.
Always be careful of how volatile the secondary markets are when projects are newly listed. It is as easy to lose money as it is to make money.
4. Taking Profits
Contrary to common messaging, taking profits is not a crime in the “diamond hands” and “HODL” Web3 world we operate in! It’s really important to set sell targets BEFORE you buy, so you don’t let your emotions take over.
Let’s be honest, almost everyone in this space is looking to make some money (in addition to supporting the awesome communities, charities, art and tech) which means it’s essential to carve out time to re-evaluate your portfolio.
Challenge yourself by asking the right, tough questions to evaluate if it’s time to take some profits:
- Are you overly invested in one project?
- Do the reasons you bought in the first-place still ring true?
- How is your overall financial well-being?
5. Bankroll/Budget Management
Everyone starts with and has different budgets and goals. Know what yours is and what you are willing to lose. Develop a plan on how to successfully manage your budget.
A good rule of thumb is to never spend more than 25% of your bankroll on a specific project as it will help to alleviate risk and overreliance on only one project for your success.
When you are first starting out, establish a reasonable amount for you to invest and stick to this amount. If you find you’re losing money, take the time to understand what’s going wrong, and work to correct it.
If something seems too good to be true, it probably is.
Not to be cynical, but apply a lens of scepticism to all of the “free” advice that you receive on Twitter and Discord. I’ve met some amazing people, learned a ton and received countless amounts of excellent advice from the various communities I belong to, but internet strangers giving advice typically have one priority… and that’s their own financial well-being, not yours.
Absorb everything but respectfully question it. That’s how we make each other better!
7. Find a Partner
It is extremely fun to have someone you can trust and talk to in the Solana NFT community. It allows you to bounce ideas off one another, talk about new projects, and act as a second set of eyes and ears on all of your favorite projects.
Try to find a friend who is willing to journey with you. It will make things a lot more fun if you guys are in it together!
For anyone that has been in the NFT space for however long, FOMO is most likely a feeling you know all too well. Chances are you have been caught up with ‘chasing’ and more likely than not have been burnt by it. I know I have.
Ultimately, avoiding FOMO comes down to discipline.
You’re not going to identify the next great project every time, and that’s OK! If you feel you’re missing out, take some time to evaluate the project and understand what caused the boom! Is it likely to continue or is most of the benefit priced in already?
It’s OK to miss out on a project, there will almost always be another one around the corner. Accepting that is a big hurdle to overcome!
9. Don’t overreact
Markets move quickly but cryptocurrency and NFT markets move faster.
Panic selling when you see floor price dropping is the worst thing you can do because you lock in losses and sell out of your precious NFTs that you worked so hard to research and acquire.
Take a deep breath, understand why prices are declining and figure out what’s the best way to proceed. Make a rational decision, not an emotional one.
10. Have fun
Trust your instincts and have fun!
This should be fun. If you are stressed out or do not think this is healthy for you, take a step back or walk away.
There are truly some amazing people who are looking to help others, change the world through charity donations, and genuinely help other strangers make money and learn. For a lot of us this isn’t a full-time job, but more of a side-hustle or hobby, so enjoy it! Always trust your instincts and happy trading!
I hope you found this helpful. Feel free to hit me up on Twitter (@The_SOLo_Dolo) if you have any specific questions about any of these points or have ideas for future topics you would like me to cover!
Written by The Solo Dolo 🪄