Key Takeaways
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Getting on the whitelist for upcoming Solana NFT projects that are of interest ensures you'll be allocated a piece of the collection without having to compete with the general public on mint day.
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Following influencers on Twitter is a great way to find projects to follow, while participating in Discord communities are paramount for finding profitable projects, making connections and are a safeguard against getting rug pulled.
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Besides trading on secondary markets, traders can also explore setting up AMM pools.
Solana solidified its position as one of crypto’s best platforms for NFT interactions through the enactment of low transaction fees and high transaction speeds at the end of 2021. Since then, it’s emerged as a competitor to Ethereum—the chain always known for its flourishing NFT ecosystem.
Today, a year and a half later, the Solana NFT space has prevailed through multiple events, like the FTX scandal and the removal of enforced on-chain royalties. Although NFT trading volume is lower than January 2022's all-time-highs, there are indications that the market is recovering. NFT traders can take the opportunity offered by quieter times of lower NFT activity for in-depth research, preparation and speculation on the next big Solana project that’ll net them the highest returns.
This article will cover the basics when it comes to getting started with trading Solana NFTs. We will also look at how to find upcoming NFT projects with potential—often the hardest parts for an NFT trader—using Discord communities and Twitter profiles, and will also cover more advanced forms of NFT trading like utilizing AMMs. Before we begin, remember that all tips and tools I’ll be covering are not meant to be taken as financial advice, and every reader should exercise discretion and do their due diligence before investing in any product.
What are NFT Whitelists?
In this article, there'll be multiple mentions of NFT whitelists. NFT whitelists consists of wallet addresses that will receive early access to an NFT collection before its project launch. Every NFT project has a fixed amount of collection pieces (except open edition NFTs), so projects often hand out whitelist allocations to the most engaged members of the community as a way of recognising their efforts—allowing them to have a guaranteed allocation for a piece of the collection without having to compete with the rest of the world when mint day comes around. Being on the whitelist can also include other benefits like lower prices.
Getting Started
Before you start trading Solana NFTs, here are some of the tools you'll need.
Wallets
To begin trading Solana NFTs, you’ll need a wallet, and Solana offers a multitude of different wallets to choose from.
From the dawn of Solana NFTs back in 2021, Phantom has always been the go-to wallet for those interested in getting into the trade due to its user-friendliness. Other wallets like Slope and Solfare are also options to consider. Non-custodial software wallets like these are convenient for daily use and trading, although you may opt to keep your long-term holdings in a cold wallet for better security.
Price Trackers
Price trackers are essential tools for NFT traders. They help traders make better decisions when initiating or closing trades. For instance, when a new NFT project is launched, price trackers can signal to potential buyers whether the current price is optimal for buying into the project. This is done by analyzing indicators such as listing count and trading volume, which can maximize potential earnings. Similarly, for new minters of the project, price trackers can help them predict when the floor price of the NFT will reach its peak, allowing them to maximize potential earnings.
Source: Solsniper | Solsniper’s UI
One such price tracker is Solsniper, which offers more than just tracking. It has an integrated sniper—an algorithm that instantly buys any NFT that has the user’s desired trait or when the user’s pre-set price has been triggered. Additionally, it allows crypto traders experienced in technical analysis (TA) to add other typical TA indicators like Bollinger Bands to trade NFTs, just like how they would trade crypto coins.
Marketplaces
Every NFT trader needs to know where to buy and sell their NFTs at the best rates. Marketplace aggregators like Tensor compile listings from multiple marketplaces (including the biggest NFT marketplace, Magic Eden, on Solana) onto one common platform, and are often are the best marketplaces for NFT traders.
Source: Tensor | Tensor UI
Tensor’s growing adoption in the NFT community is partly due to its blazing-fast transaction speeds, outperforming other mainstream marketplaces like Magic Eden. Tensor even offers integration with TradingView, enabling it to also serve as a price tracker, while also offering a rewards system for incentivising users to trade on its platform.
Another type of NFT marketplace involves automated market makers (AMMs), enabling users to trade NFTs using liquidity pools just like how one would trade crypto using Uniswap. One such marketplace is Hadeswap, which allows its users to create buying and selling pools, an advanced method of trading that will be covered later on.
Understanding Market Sentiment
Now that we have all our necessary tools for trading Solana NFTs, how do we start finding projects to look into?
Following some of the biggest influencers in the space could be beneficial for finding new projects, as some of these projects pay for promotion and coverage on their channels, or collaborate with these influencers to give out whitelist spots.
Not a BTC Maxi, but there is a few things I know:
— S◎L Big Brain (@SOLBigBrain) March 19, 2023
- There is only 535 BTC @DeGodsNFT
- @frankdegods has consistently been a BTC Maxi from the jump
Frank with his own BTC collection = ??
Thus I picked up 4 more OTC this morning at .57 BTC each. FIWB! pic.twitter.com/rgA0mDvO7T
S◎L Big Brain is one of the biggest Solana influencers out there, and they post updates on Solana and the crypto space in general, along with their takes on NFT projects.
Two other influencers to follow are Anglio and SolHub. They promote NFT projects quite often, and have their own gated Discord alpha groups that they admit people to on a weekly basis by sharing limited-invite links on Twitter as part of a giveaway.
🎁GIVEAWAY 🎁
— SolHub (@koolk123456) March 15, 2023
Prizes:
🏆 3 $SOL
🏆 1 Inv to my discord
Entry:
1️⃣ Follow @liftedlions
&@koolk123456
2️⃣ RT LIKE+TAG FRENS
Must turn @liftedlions notification on🔔!
3 $SOL Giveaway will be live on their locked discord !
🔔Winners announced in 48 hours🔔#SolanaNFTs #ad pic.twitter.com/Iv8dcrYZUP
Other personalities to follow in the Solana NFT space includes Fake Jonny and Cozy ⓣhe Caller, who post analyses on projects and insights in the Solana space on their Twitter accounts.
The more Solana NFT Twitter profiles you follow, the greater your exposure will be to understanding the general market sentiment. You’ll have a better understanding of the hottest upcoming mints, or if there are any bearish changes to the ecosystem.
Discord
Getting into closed influencer discord groups is often the best way of initiating yourself into the forefront of the Solana NFT space, since they're usually the most active groups that have high-quality alpha calls and whitelisting opportunities. Best of all, all this is usually completely free of charge.
If you don’t have access to these groups, there are also other public discord servers that provide an active community for one to join, some of which I’ve been in for a couple of months now and initially found through connections.
Do note that while these are all public servers, most of them require newcomers to be active to be granted full access.
Founded by a developer-turned-influencer, Linked Dao prides itself as an educational hub for those starting in Solana NFTs, offering an extremely active community alongside free alpha calls, whitelist opportunities and educational articles.
Created by some big names in the space, The Nifty hosts Twitter spaces and YouTube live streams that discuss NFT topics on a daily basis, while also having a strong community of various types of traders as well as connections with some of the biggest names in Web3, perfect for beginner traders who wish to immerse themselves in the culture of the space.
A lesser known server with a quieter community, Leverage Devils features a multitude of free alpha calls spanning through different portions of Web3, ranging from NFTs to technical analysis in crypto.
Joining a wide array of Discord communities is absolutely crucial for learning about new and upcoming projects in the space, and beyond that, also allows you to connect with other NFT traders.
Minting and Trading Solana NFTs
Minting Upcoming Projects
Now that you’re up to date on the latest happenings through Twitter and Discord, you should be exposed to the onslaught of new and upcoming projects. But how do you determine which projects have the potential to yield a decent return on investment? Typically, the top projects in the space already have an established reputation, and you can easily discover what they are by asking in any of the Discord servers above.
Getting whitelisted in those servers is a top priority, whether it’s through whitelist opportunities offered by different Discord communities or through being active in the project’s Discord. These projects also occasionally offer presale allocations to select communities, allowing members to mint their NFTs at lower prices and in bulk, again emphasizing the importance of being active in multiple Discord communities.
Following that, finding the next big project before it gains hype is another method NFT traders use to maximize returns. When a project becomes hyped with tens of thousands of Discord members, getting whitelisted becomes exponentially harder, since the competition is fiercer and there’s a smaller chance you’re going to get noticed by the project moderators and scoring a spot on the whitelist. As such, finding these projects in their pre-hype days allows you to secure your whitelist spot, and maybe even get multiple accounts whitelisted as well.
The Bastards - A hyped project backed by an IRL animation studio that recently minted out with 30k members in their discord
Here are some common indicators that a project has potential:
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Backed by a real company or studio in the Web2 world with a good reputation
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Founded by an influencer or significant reputable figure like a member of the core team of a blue chip project within the space
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Has appealing, unique, and pfp-ble art (being able to be put as a profile picture easily) and a theme that runs throughout the project, alluding to good branding
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Has experience building tangible Web2 or even Web3 products with solid use cases that integrate solid business models, which ensures sustainability.
As a bonus, look out for free mints, which have low risk-to-reward ratios.
Reading through the roadmaps and whitepapers of new projects should give you a rough idea of what they’re trying to achieve, and if they possess any of the qualities outlined above. If they do, start conducting in-depth research into them.
For example, you could start a chat with their founders to find out more about the project and raise questions about sections of the roadmap which seem unclear. Assessing the founders’ responses will then give you an accurate gauge if they are competent enough to run the project successfully, and also if they have the passion and motivation to continue with the project for the long term.
With the hundreds of new projects popping up in the space every day, it's important to be efficient and sift through ones that make empty promises to being the next “BAYC” or “Moonbirds” and learn to pick out those that could be potential rug pulls.
Identifying Rug Pulls
Minting NFTs expose users to the risk of a rug pull. Most of the indicators mentioned previously also act as reassurances against their founders engaging in a rug pull. There are also more subtle indicators that can be taken into account before choosing to invest in a project, like the age of the founders’ accounts, if the founders share any mutual servers, the age of the project’s Discord, and the like-to-follower ratio on the project’s Twitter.
Sadly, rug pulls are widespread due to the inherent anonymity within Web3, leading to a lack of accountability. Even with doxxed project founders, there are no consequences for rug pulling due to the absence of an enforcement system. As such, one must exercise absolute caution when minting projects.
Joining various Discord communities can provide a good safeguard against getting rug pulled because members often warn each other about red flags around projects, which are usually uncovered through joint investigations.
Example of a red flag from community members
If you want to minimize the risk of getting rug pulled while still earning profits, you can also consider secondary scalping or trading as another option.
Trading on Secondary Markets
The term “scalping” usually refers to a swing trade that traders initiate in a short time frame, reducing their exposure to the project and hence the associated risk of getting rug pulled. Scalping NFTs belonging to those hyped projects right after their typical post-mint dumps can also net huge returns for those who can analyze when to buy in using the price trackers mentioned above.
Post-mint dumps are usually caused by minters seeking to secure profits, where they repeatedly undercut the floor price causing it to fall below the value that the NFTs started trading at. Scalp traders who spot these post-mint dumps can often buy multiple NFTs at these lower dumped prices. They then wait for the floor price to recover, and then sell all of them, netting them a decent profit. As mentioned before, those experienced in crypto TA can also use price trackers to trade secondary NFT markets using indicators.
Post-mint dump for one of the biggest collections on Solana currently
Advanced Trading
Getting Involved in Other Networks
Solana is not the only cryptocurrency that provides NFTs. Several other chains such as Aptos, Polygon, Near, and Ethereum (which is dominant in the NFT space) also offer NFTs, and each of these have their respective unique NFT infrastructure, transaction fees, and minting methods. Learning how NFTs work in other chains, and how to trade them, opens up greater opportunities for finding profitable projects. During rare times when liquidity flows from the Solana NFT ecosystem to other chains, being versatile also allows you to quickly adapt to maximize profits.
AMMs
Once again, AMMs stand for automated market makers, and as mentioned at the beginning of the article, AMMs offer another unique way of earning revenue. A buying pool on an AMM marketplace like Hadeswap aids a trader in dollar-cost-averaging into a specific NFT collection by using a setting called the Delta. The Delta is a fixed percentage or amount that the trader can set for the reduction in price between consecutive buys in a collection, and conducts these buys by putting out collection offers on that NFT collection. Similarly, a selling pool containing NFTs sells them based on the Delta, such that the price of each NFT incrementally increases by the set Delta every time an NFT is bought from the pool.
Interface for creating a pool on Hadeswap
Creating buying and selling pools simultaneously for a particular NFT collection then creates a two-sided liquidity pool, which provides liquidity to both buyers and sellers of a collection. Hadeswap, like many other AMMs, incentivizes the creation of these pools by allowing the pool creators to collect fees on the price spread as people swap in and out of the pool. Though it might sound complex, at its core, utilizing AMMs to generate fees taps into the basic principle of “buying low and selling high”, where the AMM leverages market inefficiencies—slight differences in prices when selling or buying something—to generate fees, and in turn, profits.
To maximize the amount of fees generated from a two-sided pool, pool creators often choose NFT collections with the highest trading volumes, and also pour in the most amount of starting liquidity they can to cover the biggest ranges of prices effectively.
Conclusion
Besides trading, the Solana NFT space offers a ton of other revenue-earning options, like botting hyped mints. If you’re familiar with sneaker botting, buying the top Solana minting bots will allow you to get NFTs of hyped projects in their public sales, albeit also needing to set up virtual servers and nodes to accommodate the botting infrastructure.
Some Solana NFT projects also offer their own play-to-earn apps, with one notable example being STEPN. You can also take on part-time jobs in Web3, like being moderators in a community, which can also net you some decent money. Diversifying your income sources and exploring other methods of earning within the space is always a good thing.
As always, the above is not intended to serve as financial advice or an endorsement of the products and personalities featured. Always do your own research before interacting with protocols and NFTs.
With a growing interest in Web3 stemming from a background in NFT trading, Aidan wishes to delve further into the intricacies of Web3 beyond NFTs, and into the field of Web3 entrepreneurship. Follow the author on Twitter @aeids_
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