We recently took a look at ways to diversify your portfolio, including the benefits of accumulating pieces from (i) early NFT Projects that are still relatively affordable, like CurioCards; (ii) gaming and metaverse NFTs, like Axies and land parcels in Decentraland; and (iii) DAO tokens representing social and governance participation rights as they relate to large or significant communal NFT collections.
That first list intentionally looked at some of the uncommon ways in which NFT enthusiasts are building their portfolios, but there are a number of tried-and-true methods to create a collection of valuable NFTs from both a financial and individual perspective.
The first and the best, Art Blocks represents the most significant project in generative art, a relatively new genre of art that exploded in 2021. Launched late last year with three unique tokens—Construction Token, Genesis and Chromie Squiggle—Art Blocks has cemented itself as both the focal point and foundry for digital artists using algorithms to create art.
At the time of publication, Art Blocks has released 43 projects under its “Curated” platform, which features projects that have undergone review and approval by a multidisciplinary board.
Art Blocks also offers projects through its “Playground” and “Factory” platforms, the former reserved for artists that have already released projects through Curated and don’t want to go through the full board review process for a particular release, and the latter for artists that fulfill the minimum set of requirements established by Art Blocks.
To say that Art Blocks has been successful independent of the secondary market success of collectors would be a gross understatement. Art Blocks continues to attract mainstream media attention, significant and increasing capital from institutional investors and is often referenced as one of the safest places to store ETH. In addition to releasing beautiful art, many of the projects have skyrocketed in value, which means that early investments of small fractions of a single Ethereum have netted many investors hundreds of thousands, if not millions, of dollars in returns. Of course, not every project is a Fidenza or Archetype, but holding early projects for the long term is a good play given the scarcity of the tokens.
Profile Pictures (PFPs)
Not much more can be said here that hasn’t already been covered by others, but PFPs should play a role in most collectors’ portfolios, for at least two reasons. First, getting in early to a project that has incredile growth, like Bored Ape Yacht Club or CrypToadz, can be the key to accumulating huge amounts of ETH from a relatively small investment. Most PFP projects mint at extremely low prices (mostly to whitelisted users), making the potential return on investment astronomical.
Key to finding new projects to invest in is spending time in various NFT Discords and following important Web 3.0 personalities to see where the money is flowing into—follow the money, they say. The second reason is simpler: most Web 3.0 users are becoming known by easily identifiable and persistent profile pictures on Twitter, Discord, OpenSea and elsewhere. Putting some capital into something that will become part of your digital identity, at least for a while, is a worthy investment if it means gaining better traction on social media.
There’s an adage that you should only invest in what you understand, which—I think I can safely say—has been largely discarded by most speculative investors in the Web 3.0 ecosystem. A similar idea has developed, particularly with respect to NFTs, which is “buy what you like.” In other words, buy the things that you are personally interested in or attracted to. What makes you happy or excited? For some (including me), that’s collecting important or artistic photography available through institutions like Magnum Photos or Aperture. But new platforms are emerging and digital photography NFTs had a breakout year, led by Justin Aversano’s Twin Flames project that captures portraits of 100 sets of twins.
With a current floor of 165ETH, Twin Flames is out of reach for the vast majority of collectors at this point, but there are ways to build a collection by simply Googling “photography NFT” + [your interest]. For example, Noe Alonzo, a South Korea-based photographer, has been putting out entrancing images of nightlife throughout East Asia, attracting high prices for 1/1s on SuperRare and Nifty Gateway.
But collecting art of, say, Tokyo streetlamps (if that’s what you’re into, no judgment), doesn’t have to come at a high price. Doki Doki, the gacha platform of NFTs, featured an early project by artist Tokyluv highlighting Tokyo night life, still accessible on OpenSea for next to nothing (around 0.05ETH at the time of publication). There’s a huge range of prices and a huge range of opportunity to collect from emerging to established artists and projects—you just have to look.