You can flip NFTs by participating in the mints of upcoming NFT projects, or by using NFT marketplaces to trade NFT collections that have already been released. Flipping NFTs refers to buying NFTs and selling them later at a higher price. In other words, it’s just a cooler way to say “NFT trading”.
In this guide, we explain how to flip NFTs for beginners. Please note that flipping NFTs, like any other form of trading, involves risk. You may lose some or all of the money you commit to a trade, so never invest more than you are willing to lose.
What do I need to flip NFTs?
The first thing you need to do is decide which blockchain(s) you will use to trade NFTs. The most obvious choice is Ethereum, as it has the most active NFT ecosystem and is also home to the most valuable and liquid NFT collections. However, there are also many interesting NFT projects on other blockchains such as Solana, Polygon and even Bitcoin.
After deciding which blockchain you will use, you need to create an NFT wallet that you will use to purchase and securely store NFTs. Most popular cryptocurrency wallets can also be used to store NFTs, but be sure to check that your wallet of choice supports NFTs before attempting to transact.
In addition, you need to fund your wallet with some crypto to pay for the gas costs. Since NFTs are typically traded directly on the blockchain, you must pay a transaction fee every time you mint, buy, and sell NFTs. If you plan to use Ethereum, make sure you send some ETH to the wallet you plan to use for your NFTs.
Now that we know what we need to get started, let’s look at the two main ways to flip NFTs. You can participate in minting new NFT projects or trade existing collections on NFT marketplaces.
NFT coin flip
Most NFT collections have a coin process where interested users can mint their NFTs at a set price set by the issuer of the NFT. In many cases, NFT collections implement a whitelisting process in an effort to keep the coin as fair as possible.
Since most NFT collections implement randomness to some degree, you usually don’t know exactly what your NFT will look like after it’s minted. This adds some excitement to the coining process as you can potentially get an NFT with very rare properties.
In the absence of whitelisting or other restrictions on minting, tech-savvy users can create bots that automatically scoop up a large number of NFTs during the minting process. This results in an uneven distribution and can negatively affect the future potential of the project. Ideally, projects want their NFTs to be managed by a wide variety of users, as this creates powerful network effects that can ultimately make the collection more attractive.
Participating in NFT mints can be very lucrative if you have a good eye for identifying high potential projects. Usually coin prices are not too high, so you can get a very nice return by later selling your minted NFTs on a secondary marketplace.
For example, the coin price for a Bored Ape Yacht Club NFT was only 0.08 ETH. Currently, the bottom price of the collection is 51.4 ETH. So if you hit a Bored Ape Yacht Club NFT and held it up to this point, you would now see a return of at least 642x (and even more if your NFT had rare traits).
Of course, the NFT collection must be popular in order to realize any returns. There is no shortage of NFTs trading below their coin price, so participating in mints is certainly not without risk.
NFT flipping in the secondary market
Flipping NFTs on secondary markets is more convenient than trying to mint NFT flips because you don’t have to go through the trouble of finding upcoming mints and getting whitelisted. However, the potential returns from NFT flipping in the secondary market are often lower compared to participating in NFT mints.
To convert NFTs into secondary markets, simply use NFT marketplaces to purchase NFTs from existing NFT collections that you believe will gain value in the future. Here are three NFT marketplaces you can use to flip NFTs.
Open sea
Although competition is getting fiercer, OpenSea is still the leading NFT marketplace. The platform has set the standard for what NFT traders and collectors expect from an NFT marketplace.
On OpenSea, you can trade NFTs issued on the Ethereum, Polygon, Klaytn, Solana, Arbitrum, Optimism, Avalanche, and BNB blockchains. This makes it an extremely versatile platform suitable for anyone looking to flip NFTs on multiple blockchains.
Plus, OpenSea makes it easy to explore trending NFT collections and sort them by trading volume, floor price, category, and more. Due to the diversity of NFT collections listed on the platform, OpenSea is not only a great tool for trading NFTs, but also for identifying NFT projects with potential.
Fade
The Blur NFT marketplace is a relative newcomer to the NFT space as it launched in October 2022. However, Blur has already made a big impression and established itself as a credible competitor to OpenSea.
Blur is focused on speed, as it allows users to transact faster than possible on competing marketplaces. It also implements a number of features designed for advanced traders. For example, Blur users can sweep the floor of an NFT collection on multiple NFT marketplaces at once. The platform also offers advanced analytics that make it easy for NFT traders to have a comprehensive overview of their portfolio.
While OpenSea does not have its own token, Blur has launched their own token called BLUR. The BLUR token is used in governance, giving holders a say in the future direction of the Blur marketplace. The token was distributed to users of the Blur marketplace, giving it a big boost in activity.
Looks rare
LooksRare is another NFT marketplace that is trying to compete with OpenSea by launching a token and distributing it to users.
LooksRare is designed as an NFT marketplace owned by LOOKS token holders. Holders of LOOKS tokens can stake them to earn a share of the trading fees collected by the LooksRare platform. In addition, users can also earn LOOKS tokens by trading NFTs on the LooksRare marketplace.
Overall, LooksRare offers a solid experience for trading and collecting NFTs and is especially worth checking out if you’re interested in how they’ve implemented the LOOKS token.
How to evaluate NFT projects?
When it comes to turning NFTs around, it is essential that you know how to evaluate NFT projects and identify potential red flags. Here are the areas to focus on when evaluating whether an NFT project has what it takes to succeed.
founders
The founding team of an NFT project can tell you a lot about what the future of the project will look like. In many cases, the founders of NFT projects initially remain anonymous. However, you can still learn a lot about them by how they present themselves online.
Beware of founders who spend a lot of time talking about how their collection will bring profit to buyers. Such projects are usually just looking for a quick profit with the coin and tend to be abandoned soon after.
Community members
In many ways, NFTs are status symbols that show the holder’s loyalty to a particular community. Top NFT projects usually count respected members of the crypto and blockchain community among their holders.
When reviewing a project’s social media profiles, Discord and Telegram servers, and other online platforms, keep an eye on the quality of their community. Communities that show genuine interest in the project and plans are usually much more likely to succeed than communities that are filled with people only interested in quick profits.
Low-quality projects will often resort to bots and fake accounts to promote themselves. If you see the project being discussed mainly on social media by accounts that look like bots or paid traffic, it’s best to stay away.
Quality of art
While the quality of art is subjective, it’s not that hard to identify NFT projects that put a lot of effort into their art direction and have a visually distinctive style. The art of an NFT project is a key ingredient to its appeal. If you see a project where the art seems like an afterthought, it’s best to err on the side of caution.
For example, we’ve seen countless projects attempting to imitate the success of Bored Ape Yacht Club by releasing monkey-themed NFT collections with low-quality art. In general, such copycat projects are usually forgotten very quickly and never reach significant valuations.
NFT utility
When evaluating an NFT project, it is important to consider whether the NFTs have an additional utility that could positively affect their value.
On the other hand, you should be wary of projects that promise too much benefit to holders of their NFTs. Unrealistic promises will only lead to disappointment in the end, and you don’t want to hold onto NFTs from a project that is known for not living up to its hype. In the NFT space, a project’s reputation can deteriorate very quickly, which is usually reflected negatively in the value of their NFTs as well.
In addition, an NFT with no additional utility is not necessarily a red flag. For example, when CryptoPunks were released in 2017, they had no use other than cool looking avatars stored on the blockchain. Despite this, CryptoPunks went on to become one of the most expensive and iconic NFT collections out there.
The bottom line is that flipping NFTs can be lucrative, but it takes time and effort
While the process of buying and selling NFTs is very simple, making a profit is another story. The NFT markets are highly unpredictable and identifying projects with potential requires quite a diverse set of skills. You need to be able to judge art, be wary of red flags, and also keep a finger on the pulse of prevailing sentiment and culture in the crypto and blockchain space.
Rather than trying to buy and sell NFTs right away, a good first step would be to simply immerse yourself in the NFT community on Twitter, join Discord and Telegram channels related to NFT projects you’re interested in, and just observe and discuss with other community’s members. This will help you get a feel for the latest trends in the NFT space and it will also give you an insight into what successful early stage NFT projects look like.
If you want to get started with NFTs but don’t want to take any chances, you can try to find free NFT drops. While you shouldn’t expect any profit from free drops, you will gain valuable experience. If you don’t want to spend too much money, you can also check out some cheap NFTs to collect and trade.
