Crypto Basics

NFTs Explained: What Are Non-Fungible Tokens?

A definitive guide to explain NFTs, or non-fungible tokens.
Token Metrics Team
7 minutes
MIN

NFTs, or non-fungible tokens, are gaining widespread popularity in the market for digital art and collectibles. In recent years, NFTs have become a cultural phenomenon, attracting the attention of crypto enthusiasts, digital art creators, and celebrities alike. As the Web 3.0 ecosystem continues to grow and adoption increases, many believe that NFTs will play a key role in the ownership of assets online.

So what are NFTs? Let's find out.

NFT Basics

NFTs, or non-fungible tokens, are a type of digital asset that represents ownership of something on the blockchain.

NFTs can be anything such as art, collectibles, music, profile pictures or PFP, DAO memberships, event tickets, gaming assets, virtual land, domain names, and so on. They can represent either completely digital assets or tokenized versions of assets that exist in the real world. Currently, there is a lot of excitement around using NFTs to sell virtual art.

Characteristics of NFTs

  • Ownership: NFT represents digital ownership of an item on a blockchain
  • Permanent: NFTs have data permanently stored within the token. This information includes images, messages, signatures, or any other data
  • Programmable: An NFT can be programmed to do anything. For example, an NFT artwork might be programmed to pay the artist royalties on every secondary sale of that artwork
  • Unique: NFTs are unique, and that uniqueness can be confirmed on a blockchain

How to Make an NFT

To create an NFT, or non-fungible token, you will need to first prepare your media file. NFTs can support a wide range of file types, including audio, images, and even 3D files. Some popular file types that are supported by NFTs include MP3, JPG, PNG, and GIF. You can also use 3D file formats like GLB to create NFTs that represent unique, digital objects.

Once your media is ready, you will need to set up a non-custodial wallet to securely store the cryptocurrency that you will use to buy, sell, and create NFTs. Non-custodial wallets are important because they allow you to retain control of your private keys, which are needed to access your cryptocurrency and make transactions. There are many different wallet options available, so it is important to do your research and choose one that is secure and user-friendly.

Once you have set up your wallet, you will need to buy Ethereum, or other fungible tokens depending on the blockchain being used, to cover the cost of minting your NFT. Ethereum is the most commonly used blockchain for NFTs, and it is typically the easiest to get started with. You can buy Ethereum using a variety of methods, including through a cryptocurrency exchange or from other individuals who are willing to sell.

Once you have your Ethereum, you will need to connect your wallet to an NFT marketplace like Rarible or OpenSea. These platforms allow you to easily create and mint your NFT, as well as trade and purchase NFTs created by others. To connect your wallet, simply tap the "Connect" button in the top right corner of the marketplace's website. This will create an account for you on the platform and allow you to begin creating your NFT.

To create your NFT, upload your media file to the platform and provide a description of your asset. You can choose to create a standalone piece, or create multiple NFTs of the same piece, each with its own unique characteristics. You can also set rules around royalties and other aspects of your NFT to ensure that you are fairly compensated for your work.

Once you are ready to mint your NFT, the process will require you to pay a small amount of ETH for transaction fees. This is necessary to get your NFT added to the blockchain and verified as unique. Once your NFT is minted, it will be available for trade and purchase on the marketplace. You can monitor the progress of your NFT and track its sales through your wallet or the marketplace's website.

NFT Secondary Markets

Creators make NFTs using blockchain-based minting platforms to retain more control over their creative output. Once NFTs are minted on a non-custodial wallet-compatible website, collectors and traders can sell these assets on the secondary market.

Here is a list of the most used NFT marketplaces:

  • OpenSea: OpenSea is the first and largest marketplace for NFTs. OpenSea is building tools that allow consumers to trade their items, creators to launch new digital works, and developers to build rich, integrated marketplaces for their digital items. It recently announced the support for Solana-based NFTs.
  • Coinbase NFT: Coinbase, a cryptocurrency exchange, recently launched its NFT marketplace in beta version to the public. This marketplace acts as a social media platform in which users can not only buy and sell NFTs but also interact with and showcase their collections using user profiles, likes, and comments.
  • Solanart: Solanart is the first and largest fully-fledged NFT marketplace on Solana. Users can get quick and easy access to digital collectibles, and explore, buy, and sell NFTs that run on the Solana blockchain.
  • Rarible: Rarible is a do-it-yourself NFT marketplace where you can mint NFTs when and how you please. Creators are highly favorable towards Rarible, as the minting process is free, easy, and unrestricted. Rarible’s native governance token “RARI” is used to incentivize platform users and give the community members a voice.
  • Nifty Gateway: Nifty Gateway is owned by the Gemini crypto exchange and has become one of the most known NFT marketplaces lately. They focus on viral drops from artists like Beeple, Trevor Jones, Pak, and more.
  • SuperRare: SuperRare (SR) is one of Ethereum’s debut crypto-art NFT marketplaces. Artists must be accepted to the platform before they can list their assets.

Notable NFT Projects

NFT-based companies have seen significant growth in recent years. Some notable examples include:

  • Yuga Labs: a blockchain technology company that creates Ethereum-based NFTs and digital collectibles. Yuga's most valuable NFT collection is Bored Ape Yacht Club, which has seen a floor price of over 150 ETH at its all-time high. In addition to apes, Yuga has also created dog NFTs, mutant apes, and deeds for its Metaverse. The company recently acquired Larva Labs, bringing high-value projects like Cryptopunks and Meebits under the Yuga brand. Yuga is backed by investors like Coinbase, Samsung, and Mark Cuban.
  • Doodles: a collection of 10,000 Ethereum-based NFTs created by artist BurntToast. The Doodles collection includes a wide range of visual traits, heads, costumes, and colorways. Owners of Doodles NFTs have exclusive access to new experiences like Space Doodles and Dooplicator.
  • Okay Bears: a collection of 10,000 Solana-based NFTs. Ownership of an Okay Bear grants access to a community of collectors and exclusive products, merchandise, and events.

Investing in NFTs

NFTs, or non-fungible tokens, provide many benefits as an investment vehicle.

One of the main advantages of NFTs is that they allow physical objects, such as artwork, to be tokenized.

Additionally, NFTs offer greater liquidity for investors, making it easier to trade and sell their assets.

The Future of NFTs

NFTs offer a new way to represent and prove ownership of assets on the blockchain.

This technology has already been used for digital art, collectibles, and in-game assets, but it has the potential to be applied to a wide range of other industries as well. For example, tokenized real estate could provide a way for people to invest in property without the barriers to entry that currently exist.

High-end fashion brands like Louis Vuitton have also expressed interest in using NFTs to track the ownership of luxury items.

Additionally, NFTs can be used to tokenize certifications, degrees, and licenses, providing a way to securely track and maintain this sensitive data on the blockchain.

Overall, the potential applications for NFTs are nearly limitless.

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Token Metrics Team
Token Metrics Team

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🚀 Token Metrics API Goes Live on Hacker News – The AI Crypto Toolkit for Builders

Token Metrics Team
5 min
MIN

The Token Metrics API has officially launched on Hacker News, marking a major milestone in our mission to bring AI-powered crypto insights to every developer, founder, and builder in the Web3 space.

If you're building trading bots, dashboards, investment tools, or AI agents that interact with the crypto market, this is your developer edge in 2025. Forget raw feeds and static charts—this is real-time, AI-grade crypto intelligence available in minutes via a single API key.

What Is the Token Metrics API?

The Token Metrics API is a powerful crypto intelligence engine built for developers who want more than just price data. It combines machine learning, quantitative modeling, and narrative indexing to deliver structured signals that help users make smarter trading decisions.

Instead of simply showing what the market did, the API helps predict what it might do—with insights like:

  • Trader & Investor Grades (0–100 scores on momentum and fundamentals)
  • Bullish/Bearish Signals across 6,000+ assets
  • Narrative-based Indices like DeFi, AI, Memes, RWAs, and more
  • Quantitative Risk Scores and sentiment analysis
  • Real-time updates, no lag, no stale metrics

It’s like giving your crypto bot a brain—and not just any brain, an AI-trained crypto analyst that never sleeps.

Why It’s Different from Every Other Crypto API

Most APIs give you prices, volume, and maybe some on-chain data. Token Metrics gives you opinionated intelligence derived from over 80 on-chain, off-chain, technical, and sentiment indicators.

That means:

  • Your dashboard users get real-time grades and trending tokens.
  • Your AI agent can speak fluently about token fundamentals.
  • Your bot can act on bullish flips before the rest of the market.

We’ve designed this API for modularity and plug-and-play usability. With 21+ endpoints and official SDKs, you can ship faster and smarter—no custom pipeline needed.

What Can You Build?

Whether you're a solo developer or building inside a Web3 team, the possibilities are wide open.

Build smarter with Token Metrics if you’re creating:

  • 🧠 AI trading agents that query real-time token grades
  • 📊 Investor dashboards that surface top-rated altcoins
  • 📈 DApps that alert users to sector momentum shifts
  • 📱 Mobile apps with embedded market signals
  • 🧪 Backtesting systems for narrative-based portfolio strategies

Because the API supports OpenAI, Claude, Cursor, and Raycast integrations, your agents and LLM-powered tools can query live crypto intelligence in natural language—no additional parsing required.

Why the Hacker News Feature Matters

Token Metrics API just made it to the front page of Hacker News, one of the internet’s most trusted platforms for discovering high-impact developer tools.

This means:

  • 💬 A community of builders and engineers is already testing the API
  • 🧪 Feedback is pouring in, helping us evolve faster
  • 🚀 Your early adoption puts you ahead of the curve

If you’ve been waiting for the right time to integrate AI-native crypto signals into your product—this is it.

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Research

Bullish or Bearish? Interpreting AI Signals in Today’s Volatile Crypto Market

Token Metrics Team
5 min
MIN

Introduction

Crypto moves fast — and traders who can't read the signs get left behind. But in a market where emotions dominate, how do you distinguish between a real trend and a fakeout? That’s where AI-powered trading signals come in.

Token Metrics AI monitors over 6,000 tokens using 80+ data points, from technical momentum to on-chain activity and social sentiment. Its bullish and bearish signals aren’t just flashes of color — they’re actionable, data-driven insights that can guide decisions in chaotic markets.

In this post, we break down how to interpret bullish and bearish signals, what they’ve been saying recently, and how to react when market direction flips suddenly.

What Are Bullish and Bearish Signals?

Let’s start with the basics:

  • Bullish Signal (Green Dot): Indicates that a token is showing signs of an upward trend based on combined technical, sentiment, and on-chain analysis.
  • Bearish Signal (Red Dot): Suggests that a token is losing momentum, and price downside or stagnation is likely.

But these signals aren’t standalone — they come with contextual grades, like the Trader Grade, which ranks signal strength from 0 to 100. This allows you to not just know the direction, but the confidence behind it.

What Happened Recently? The May 30 Flip

On May 30, 2025, Token Metrics AI issued a broad bearish flip across much of the market. That included:

  • Ethereum
  • Bittensor
  • Launchcoin
  • Many Real World Asset and L2 tokens

The AI signal flipped red, and Trader Grades fell across the board. Why? Here's what the AI detected:

  • Slowing volume
  • Negative sentiment shift
  • Liquidity thinning on DEXs
  • On-chain accumulation stalling

This wasn’t panic-driven — it was a data-driven, proactive warning that the cycle had peaked. In a world where most traders rely on lagging indicators or Twitter sentiment, this was an edge.

How to Interpret a Bullish Signal

A bullish signal isn’t an instant “buy” — it's a call to investigate. Here's what to check when a green dot appears:

✅ 1. Trader Grade Above 80

This means high conviction. If it's between 60–79, the trend is forming, but may lack strength.

✅ 2. Volume Confirmation

Price up + volume up = good. Price up + volume flat = caution.

✅ 3. Narrative Alignment

If the token fits a hot theme (like RWAs or AI), that adds strength to the signal.

✅ 4. Recent Price Action

Did the signal appear after a breakout, or just before? Entry timing depends on whether you're catching the beginning or chasing the middle of the trend.

✅ 5. Compare to Peers

If 3–5 similar tokens are also turning bullish, that indicates sector-wide rotation — a better entry environment.

How to Interpret a Bearish Signal

Red doesn’t mean "dump immediately" — it means it's time to tighten your risk.

❗ 1. Trader Grade Below 50

This indicates deteriorating conviction — exit or reduce exposure.

❗ 2. Volume Divergence

If price is flat but volume is fading, that’s a warning of a potential breakdown.

❗ 3. Signal Timing

Did the bearish flip happen near local highs? That’s often the best exit point.

❗ 4. Check for Repeats

Was this the second red dot in a week? That could confirm a longer-term downtrend.

❗ 5. BTC/ETH Context

If Bitcoin or ETH also flip bearish, it may suggest macro pressure, not just token-specific weakness.

Real-Time Examples from the Webinar

During the June 5 Token Metrics webinar, we walked through examples of how these signals worked in real time:

🟢 Bullish (April) – Launchcoin

Strong signal, grade in the 80s. Resulted in a massive short-term run.

🔴 Bearish (May 30) – Ethereum

Signal turned red around $3,490. Traders who followed it avoided the 55% drawdown that followed.

🔴 Bearish (June) – Fartcoin

After a 700% run-up, the signal flipped bearish with a low Trader Grade of ~24. Result? A slow bleed lower as sentiment cooled.

What Makes AI Signals Different from Traditional TA?

Feature                                                    Token Metrics AI                     Traditional TA

Combines social + on-chain                    ✅                                       ❌

Updated in real time                                 ✅                                       ❌

Machine learning trained on past data   ✅                                       ❌

Outputs confidence grade                       ✅                                       ❌

Adapts to new narratives                         ✅                                       ❌

This isn’t about moving averages or MACD — it’s about combining the entire digital footprint of a token to anticipate what comes next.

How to React to a Signal Flip

What do you do when your favorite token suddenly flips from bullish to bearish?

  1. Reduce exposure immediately — even if you don’t sell everything, cut risk.
  2. Check the Grade — if it’s falling, momentum is likely over.
  3. Watch Peer Tokens — if similar projects are also turning red, it confirms sector rotation.
  4. Set New Alerts — if the signal flips back to green, be ready to re-enter.

Your job isn’t to predict the market. It’s to respond to what the data is saying.

How to Combine AI Signals with a Strategy

Here’s a basic framework:

Entry

  • Bullish signal + Trader Grade > 80 = enter with full size.
  • Grade 60–79 = enter small or wait for confirmation.

Exit

  • Bearish signal = scale out or exit.
  • Grade < 50 = no new positions unless for short trades.

Risk

  • Position size scales with grade.
  • Only trade tokens with high liquidity and volume confirmation.

This keeps your system simple, repeatable, and data-driven.

Conclusion

In volatile markets, conviction matters. Token Metrics AI doesn’t just point up or down — it tells you how strong the trend is, how likely it is to last, and when it’s time to pivot.

Don’t trade on emotions. Don’t chase hype. Use the signals — and trust the grade.

Because in a market that never sleeps, it pays to have an AI watching your back.

Research

Crypto Market Cools Off: What Is Token Metrics AI Saying Now

Token Metrics Team
5 min
MIN

Introduction

The euphoria of April and May in the crypto market has officially hit the brakes. While traders were riding high just weeks ago, the mood has shifted — and the data confirms it. Token Metrics’ proprietary AI signals flipped bearish on May 30, and since then, the market has been slowly but steadily declining.

In this post, we break down what’s happened since the bearish signal, how major altcoins and sectors are reacting, and what Token Metrics’ indicators are telling us about what might come next.

The Big Picture: Cooling Off After a Hot Q1 and Q2 Start

The platform’s AI signal turned bearish on May 30 when the total crypto market cap hit $3.34 trillion. Since then, the momentum that defined early 2025 has reversed.

This wasn’t a sudden crash — it’s a slow bleed. The signal shift didn’t come from headline-driven panic, but from data-level exhaustion: volume softening, sentiment stalling, and trend strength fading across most tokens.

Token Metrics AI recognized the shift — and issued the warning.

What the Bearish Signal Means

The AI model analyzes over 80 metrics across price, volume, sentiment, and on-chain data. When key trends across these data sets weaken, the system flips from bullish (green) to bearish (red).

On May 30:

  • Trader Grades across most tokens declined
  • Signal sentiment flipped bearish
  • Momentum and velocity cooled down

According to the model, these were signs of a broad de-risking cycle — not just isolated weakness.

Sectors Showing Declines

Even tokens that had been performing well throughout Q2 began to stall or roll over.

🚨 Launch Coin

Previously one of the top performers in April, Launch Coin saw its grades decrease and price action softened.It may even be rebranding — a typical signal that a project is pivoting after a hype cycle.

🏦 Real World Assets (RWAs)

RWAs were hot in March–May, but by early June, volume and signal quality had cooled off significantly.

🔐 ZK and L2s

Projects like Starknet and zkSync, once dominant in trader attention, have seen signal strength drop, with many now scoring below 70.

The cooling effect is broad, touching narratives, sectors, and high-performing individual tokens alike.

The Bull-Bear Indicator in Action

One of the key tools used by Token Metrics is the Bull vs. Bear Indicator, which aggregates bullish vs. bearish signals across all tokens tracked.

As of early June:

  • The percentage of tokens with bullish signals dropped to its lowest since January.
  • New projects launching with strong grades also saw a decline.
  • Even community-favorite tokens began receiving “exit” alerts.

This isn’t fear — it’s fatigue.

How Traders Are Reacting

During the webinar, we noted that many users who rely on Token Metrics signals began rotating into stables once the May 30 signal flipped. Others reduced leverage, paused entries, or shifted into defensive plays like ETH and BTC.

This reflects an important philosophy:

"When the data changes, we change our approach."

Instead of trying to fight the tape or chase rebounds, disciplined traders are using the bearish signal to protect gains and preserve capital.

What About Ethereum and Bitcoin?

Even ETH and BTC, the two bellwether assets, aren’t immune.

  • Ethereum: Lost momentum after a strong May push. Its Trader Grade is dropping, and the AI signals currently reflect neutral-to-bearish sentiment.
  • Bitcoin: While still holding structure better than altcoins, it has also declined since peaking above $72k. Volume weakening and sentiment falling suggest caution.

In previous cycles, ETH and BTC acted as shelters during altcoin corrections. But now, even the majors show weakness — another reason why the bearish flip matters.

What Could Reverse This?

Abdullah Sarwar, head of research at Token Metrics, mentioned that for the signals to flip back bullish, we would need to see:

  • Increased momentum across top tokens
  • New narratives (e.g., real-world utility, cross-chain demand)
  • Higher volume and liquidity inflows
  • Positive macro or ETF news

Until then, the system will remain in defensive mode — prioritizing safety over chasing trades.

How to Act During a Bearish Signal

The team offered several tips for traders during this cooling-off period:

  1. Reduce exposure
    Don’t hold full positions in assets with weak grades or bearish signals.

  2. Watch signal reversals
    Keep an eye on sudden bullish flips with high Trader Grades — they often mark trend reversals.

  3. Rebalance into safer assets
    BTC, ETH, or even stables allow you to sit on the sidelines while others take unnecessary risk.

  4. Use Token Metrics filters
    Use the platform to filter for:

    • Top tokens with >80 grades
    • Signals that flipped bullish in the last 3 days
    • Low market-cap tokens with strong on-chain activity

These tools help find exceptions in a weak market.

Conclusion: Bearish Doesn’t Mean Broken

Markets cycle — and AI sees it before headlines do.

Token Metrics' bearish signal wasn’t a call to panic. It was a calibrated, data-backed alert that the trend had shifted — and that it was time to switch from offense to defense.

If you’re navigating this new phase, listen to the data. Use the tools. And most importantly, avoid trading emotionally.

The bull market might return. When it does, Token Metrics AI will flip bullish again — and you’ll be ready.

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