Not sure how to trade NFTs on Cardano?
You've come to the right place!
It is, without a doubt, a good time to understand the NFT space while it is still in its infancy. As the NFT community grows, more and more intriguing projects are being developed on various blockchains.
Cardano, one of the top blockchains, has a bustling NFT market because it offers very low gas prices compared to its primary competitor, Ethereum.
This doesn’t just make it attractive to NFT traders, but to artists launching NFT projects as well. On Cardano, most of the mint price goes to the artist and not to blockchain miners which is how it should be.
Now that you have a brief understanding of why Cardano makes sense for NFT trading, let’s get into the details of how to actually buy an NFT on Cardano.
With this handy guide, you’ll be up and running in no time.
First and foremost, you should purchase ADA, Cardano's cryptocurrency, on a cryptocurrency exchange like Binance, Coinbase or Kraken. Binance is a more extensive and popular exchange with cheaper costs on average, but Coinbase and Kraken have been around for almost a decade and are considered very secure and reputable platforms.
Depending on your country of origin, you might be able to buy ADA directly with a credit card. If not, you’ll have to transfer it from your bank account.
Once you’ve acquired ADA on an exchange, you'll need a Cardano-supported wallet, such as Yoroi (for mobile devices) or Daedalus (for desktop computers), to store your ADA.
Nami and CCVault are also good desktop wallets that offer smart contract functionality.
Copy and paste the wallet address into the address field in the ‘Withdraw Crypto’ section of your chosen exchange and hit send. It usually just takes a few minutes to complete the transaction as long as the network isn’t congested.
New to wallet setup? Check out this step by step guide to setting up and funding your wallet!
Now it's time to find a project that interests you, one that is worthy of your hard-earned ADA.
Learn about upcoming drops at CNFT calendar or Wen CNFT. Ideally choose a project with art that resonates with you because if for some reason it doesn’t do well, at least you’ll have an NFT you enjoy looking at.
Do your own research (DYOR) by following the project on Twitter and Discord.
Check to see how often the creators are tweeting and posting announcements on Discord. They not only need to be interacting with their community often, there also needs to be good reaction from the community to every bit of news that is shared.
The energy, especially within the Discord chat channel, needs to be positive and uplifting. The most damning thing for an NFT project is members ‘FUDDING’ in the chat. FUD stands for fear, uncertainty and doubt and is commonly used NFT lingo.
Visit the project website to learn about the creators. Are they doxed? Meaning, can you see who these people really are? Do they have their own Twitter following? Have they launched projects before? If they are just a bunch of faceless avatars you should immediately be weary
In the Discord, ask questions about the project. You are doing all this due diligence to avoid the infamous "rug pull," which occurs when someone starts a project and then abruptly abandons it once they’ve made a fortune from the mint.
Learn more about the emergence of NFTS on Cardano here!
Once you’ve established the project is real and you’re confident in the development team’s ability to deliver on the roadmap, make sure you check the announcements in Discord for the minting time and date as well as other instructions like where the mint will be held.
Sometimes the website is used, other times an address is posted in the Discord announcements channel. There might also be a restriction, for very popular projects, on how many NFTs you can buy per transaction in order to ensure that most people get at least one.
Now that you've read the guidelines in the announcements channel, it’s time to load up your wallet with ADA and get ready for the mint. You’ll need to keep your wits about you because during the mint, scammers will do all they can to cash in on the frenzied activity to trick you.
They’ll do things like using the project creator’s avatar to post their own wallet address in the chat channel or direct message you and try to get you to mint on a fake website that appears to be identical to the real one.
If you’ve successfully avoided the scammers, you’ll need to be quick with the mint or you’ll likely miss out if it’s a popular project. Using numerous wallets might occasionally be beneficial in this situation.
Daedalus, because it is a full node wallet, usually does better under high network activity.
Perhaps you missed the drop or you've learnt about a worthwhile project after the drop. You can always get in on the project by finding good deals on the secondary market. Once again, DYOR, is of critical importance.
Purchasing on a secondary market is normally more costly, but at least you can be confident that the project has already been formed and that they are following through with their roadmap.
Pro Tip: Check out NFT tools like Open CNFT or CNFT analytics to quickly get the key metrics about NFT projects.
Just as with a new project that is about to mint, you should always DYOR by checking out the social media channels, project website and dev team experience. Now that the project has minted, you have even more information available like the mood in the discord server.
Is the community happy with the mint?
Do they like the NFTs?
Are they just concerned with the floor price or are they really invested in the long term potential of the project?
The price on secondary market will also tell you how the project is being received by the community. If the floor price is already below the mint price then this is an immediate red flag and the project should probably be avoided.
Now that your wallet is loaded with your first NFTs, head on over to pool.pm and plug in your wallet address to see them. It's not the best viewing experience, but its all we have for now until a proper viewing platform is built.
The question you need to ask yourself now is, "should I flip or hold on for dear life (HODL)?"
Trading NFTs is a high-risk endeavour and it's important to note that most NFT projects will go down to zero.
Hopefully, you've bought into a collection with OG potential and so HODLing will pay off in the long run. Most NFT traders agree that you can make more money being patient than just flipping immediately after the drop.
