Keeping up with the latest market activity could be stressful and time-consuming, especially in a highly volatile market like the NFT market. When it comes to investing in non-fungible tokens, you might want to look out for accurate and up-to-date information that is the key to avoiding flushing your life-long savings down the drain of worthless NFTs. You may be wondering, how can you make studied and data-backed decisions that will lead you to great NFT investments. Well fret no more my friend, here is where NFT analytics come to your rescue.
In the uncertain world of NFT trade, the data analytics field plays a vital role in making blockchain-based decisions. NFT analytics tools provide you with the needed insights that can make you better understand trading behavior and market trends in the NFT space.
This article will be your deep dive into why NFT analytics are important, their various benefits, and how to use analytics tools to make well-thought investments! Read along and thank me later as using NFT analytics will be your game changer.
What is Data Analytics?
Data analytics is a field in computer science that uses various algorithms, statistics, and machine learning capabilities to find meaningful patterns in data. Nowadays, the field of data analysis is getting global recognition as the upcoming way for businesses to enhance their services. In fact, a study has shown that over 70% of businesses are willing to spend more money on analytics than software investments in the upcoming years.
Data analytics help businesses by improving decision-making, providing more effective marketing strategies, and enhancing customer service. Let’s take an example to see how data analytics works.
Let’s say you are running a website that features videos about cooking. By using the right tools, you can collect data about which videos different visitors watch, how highly they rate the videos, and which ones they comment on the most. This data can help you make certain videos that target a specific audience, and hence, improve the overall quality of the site.
NFTs and Data Analytics
So you might wonder, what does data analytics have to do with NFTs? Well, it has to do with how NFTs are traded. NFTs are cryptographic assets with unique identifiers. What makes them differ from other crypto assets is their non-fungible trait. Cryptocurrencies such as Bitcoin and Ether are fungible, meaning they are interchangeable, just like the US dollar. However, NFTs are unique assets in a way that it is impossible for one NFT to be equal to another.
The Need For NFT Analytics
These non-fungible assets act as a certificate of ownership that gets confirmed on a decentralized blockchain. And thus, since they are considered digital assets with unique traits, they are sold and traded on the open market. And therefore, all traders who aim to make a profit or make a worthy investment in a certain market need to equip themselves with the right data in order to make a better decision.
NFTs can be a way for traders to lose money on overhyped projects. How? Well as human beings, we tend to make irrational decisions based on our emotions, such as FOMO (fear of missing out), exaggerated hype, or a way for people to flex in front of their friends.
Trader 1: Look at this cool (and useless) NFT with a derivative art that I bought with all my ETH!
Trader 2: Did you DYOR? You got rug-pulled fam.
Trader 1: *Cries in non-fungible tears*
So, let’s highlight the main issues in not using data analytics when choosing an NFT to invest in.
- Lack of NFT market understanding and relevant data for investment.
- Difficulty in accurately evaluating the value of NFT projects and assets. For example, thinking a certain NFT is worth much more than its actual value.
- Biased decision-making based on FOMO and emotional rationale.
These types of rushed decisions can be avoided by understanding the market status of the NFT in question.
What Are NFT Analytics Tools?
That’s great and all, but what are NFT analytics tools in the first place? Well, these tools allow traders to use on-chain data and analysis as a tool to surpass other investors. These tools can be dashboards and charts that provide NFT-based data such as floor price, volume trends, sales history, historical charts, alerts, and much more.
What to expect when using an NFT analytics tool:
- Finding New Mints: Some tools offer the ability to track the newest mints where you can follow price trends, volume, and the top NFT flippers without the time-consuming wandering in Discord.
- Tracking Specific Collections: Many tools offer extensive and detailed dashboards providing in-depth collection analysis, which includes: an overview of trading volume, transactions and buyers, holders, trades, listing, related collections, Blue-chip holders, and much more.
- Checking Rarity: Some platforms offer analytics tools that calculate NFT rarity. This way, you could check which NFT has the most valuable trait, who is holding such NFTs, and more.
- Viewing Market Summary: Many tools offer stats pulled from the top 24h volume on Opensea’s ranking page. It’s a perfect way for you to see which NFT projects are topping the charts and which are flopping hard.
Other main features you can find:
- Data visualization
- Historical data
- Watchlists
- Volume alerts
- Profit calculator
- Trending collections
- Community sentiments
Benefits of Using NFT Analytics
Well, you kinda get the point by now that NFT analytics tools are mega important. However, let’s highlight even more some of the key benefits of using data analysis when making NFT-based decisions. NFT analytics help users by:
- Grasping the overall market situation: With the increase in Web3 decentralized projects, it can become a mayhem of NFT collections, where traders are left to speculate which NFT to invest in. NFT Analytics help by tracking and monitoring different NFT projects and marketplaces across multiple blockchains at a faster rate, thus, giving real insights into the rapid and chaotic development of the market.
- Developing rational and well-informed decisions: Instead of vague estimations and hype-based investments, NFT stats can help traders make well-rounded decisions based on statistical information and reliable evidence.
- Developing strategic thinking: Because of the numerous false speculations and scams that circulate in the NFT space, traders need to cultivate a rational mentality in order not to jump into the hole of no return. To sustain in the NFT community, NFT analytics provide traders with the right mentality that allows them to analyze situations in an unbiased manner and deploy their recourses rationally.
Here are Some NFT Analytics Tools
Check out below some examples of NFT Analytics tools. For a more in-depth look, make sure to check the Top NFT Tools Directory!
Chainwitcher NFT Flip Tracker
Here on Chainwitcher, you can find an NFT Flip and Portfolio tracker. This is a management tool that allows you to track your collection of NFTs. This kind of tool allows users to view their current collections, track purchases, and sales, and manage their digital assets.
The NFT tool uses data collected from NFT markets to showcase where your digital assets stand in today’s market and calculates the profit made by your wallet in detail.
Try it now by entering your wallet address.
The tool provides you with two tabs: History and Portfolio.
History
The history tab allows you to access details about the purchases you made with a specific wallet address. The tool will provide you with the entry price, exit value, profit, HODL duration, and a summary box that summarizes the wallet’s total winning flips, losing flips, total spent, and total profit in ETH.chainwitcher.com/web3-terms
Portfolio
The Portfolio tab showcases where the NFTs stand in today’s market in terms of 24h volume, floor price, CRT value, buy cost, and much more. The summary box showcases the number of total owned NFTs, owned collections, total spend, and the minimum value.
Dune Analytics Dashboard
Dune is a great platform for NFT analytics that provides various dashboards where traders can find what are the top NFT collections by volume, asses the overall market status, get insights on general blockchain statistics, and much more. The great thing about Dune is its user-friendly data visualization. In addition, Dune is totally free to use and is not locked behind a paywall.
Key Features:
- Multiple blockchain analysis
- Offers key metric analysis for DeFi, NFTs, and other decentralized apps.
- Instant Data visualization
- Smart contract support.
Nansen
Although Nansen requires a premium account to access its wide range of features, you’ll get real value out of the money you spent. Nansen is a data analytics platform that provides extensive insights into the NFT market status. Aside from the general market analysis and data visualization, Nansen’s Item Profiler dashboard calculates the potential price of an NFT and matches it against the listed price.
Nansen operates in three modes:
- NFT Paradise: Provides market overview (24-hour activity, volume prices, trading activity) and trending projects.
- NFT God Mode: Provides a collection of specific data such as price, volume, transaction overview, waller profiler, HODLR activity, and more.
- NFT Trends & Indexes: Provides data on NFT indexes like art, gaming, metaverse, and more.
You can use Nansen for free in the Lite membership option if you want more of a basic oversight of the markets. However, for more in-depth insights, the membership options ranges from $399 to $9000.
Rarity Sniper
You can check an NFT’s rarity by using this rarity tool provided by Rarity Sniper. This tool allows you to locate the rarest NFTs in a collection, see upcoming drops, check stats of popular listed NFT collections, and allow you to list your NFT projects. Check out some other NFT rarity tools right here.