How to Ensure NFT is Profitable for You?

As it is difficult to pinpoint the value of NFT,we can use the formula mentioned next to determine if a particular NFT for an asset will be valid for the developer or buyer.

NFT Value = Ownership and History + Utility + Liquidity Premium + Future Value

This equation can give a better idea about the value of NFT. But first, we have to understand each of the four components that add up to make the NFT value.

1. The value attached to the NFT ownership and its history

The popularity of a person who created a particular asset adds more value to the overall value of NFT.  Similarly, if the NFT is attached to a big company or brand, its value is significantly higher.

2. The value attached to the utility The utility value is probably the most important when it comes to determining the price of the NFT.

In a video game, NFT will enhance players' experience by providing them more control over their digital game assets. By this gamers will be able to sell the assets they own to other players.

3. Value of NFT in the Future Like the price of shares and cryptocurrencies that rise based on speculation, the future value of digital assets can increase based on assumption.

Creators can sell their products as NFTs and then get royalties whenever their artworks are sold in the secondary market.

Creators can sell their products as NFTs and then get royalties whenever their artworks are sold in the secondary market.

4. Value based on the liquidity of the NFT Liquidity means how quickly an asset can be converted into usable money. When the liquidity is high, it becomes easier to sell the NFT.

Pro Advice: Don't buy NFTs just because everyone is buying them. Only buy NFTs if you understand the goods being sold and use them.

Disclaimer: Cryptogurukul has no relationship to these projects, and there is no endorsement or investment advise. Please seek professional advice before taking financial risks.