Choosing the correct drop structure is among the most critical decisions for the NFT project's creator. It's not just a matter of making or breaking your project in terms of financials; it can also serve as a determining factor of the team's preparation and ability to deal with unexpected events.
Because let's face the facts: NFT drops aren't perfect. Adidas'"Into the Metaverse public drop had left minters with substantial gas bills and a bitter flavor in their mouths when bots took over a large quantity of the stock. This CloneX Dutch auction was plagued with hacks, bots, and untruthful community members' first-running trades. The initial TimePieces auction had a 96% success rate due to a leak in the contract before the mint.
Each approach has its own set of benefits and disadvantages. Unfortunately, there isn't (and could never be) any one solution that can make the whole community satisfied. However, that doesn't mean you shouldn't try to achieve it.
We've introduced a variety of ways to deal with NFT drops and then highlighted the advantages and disadvantages of each one while also making sure to include the intelligent opinions of experts who are keen on the subject.
FCFS Public Mint
How it Works:
The simplest First-come, first-served (FCFS) open mints can be among the most chaotic NFT drops. The name implies that FCFS drops are available, and minting sessions for public use are scheduled at a specific time. Then it's a race between dogs before minting, and every interested collector will attempt to make a mint simultaneously. Although some projects limit the number of NFTs, an individual wallet owner can buy them to prevent the flipping of coins and guarantee a fair number of unique users. Some are entirely all-inclusive systems. Every FCFS price for mints is set (often in between the .08 Ethereum and .2 Ethereum range); however, for the most high-profile mints, the collectors usually will be charged much more in gas costs because of the increase in traffic on the network.
Pros & Cons:
Naturally, with the urgency and scarcity is FOMO. And FOMO drives demand. A lot of public planned FCFS mints can be sold out quickly, generating more excitement for an idea. If developers can stop Bots aren't a problem, FCFS mints also serve as one of the most democratic methods to mint, allowing everyone the same chance of securing an NFT.
While the pressure of FCFS public mints could be an excellent method to boost demand, it's crucial to ensure your smart contracts are solid from efficiency in gas and bot-prevention viewpoint. Gas battles -- or the incredibly high rises in gas costs because of network congestion is a significant issue for all sought-after FCFS mints. Because only the early buyers can succeed in minting the NFT before the time when their collection is sold out, many other buyers suffer from losses and fail transactions.
Doing It Right
It's important to be ready for pushback from those who failed to make a profit, were forced to pay hefty gas charges or had to pay gas costs in the event of a failed transaction. These are all sadly commonplace, in addition to the many users who try to use bots to mint collections but flip most of the NFTs just a few minutes later.
Whitelist + Public Mint
How It Works
Employing a similar strategy to the FCFS mint, The Whitelist and the Public Mint combo has become the standard for NFT drops.
A whitelist (also called the allowlist or starlit) is a list of people who can access the presale of a project, which typically takes place between 24-72 hours before the sale to the public.
How do you get the whitelist and avoid all the fuss? The first step is to be an active participant in the community of the project. In the lead-up to a presale and a public mint, many projects give those who are active Discord members with spots on the allowlist based on engagement, including chat frequency, spreading the message about the project or doing something to others within the community. Many projects also host giveaways in their own Discord or other Discords associated with other initiatives to build excitement around the launch.
Pros & Cons
While prices for presale sales are usually less than public prices, getting the whitelist spot offers one crucial benefit: no gas conflict. Whitelists also permit people who are enthusiastic about the cause to have their right to mint without stress.
While the public mint component has the same risks as bots and gas wars whitelists carry a different risk-based list. Most often, people who belong to Discord communities will be active until they get a whitelist spot; only after that do they disappear from the map and then switch over their NFT when they have minted. Although this isn't illegal, you must seek out and reward people who join your community with the right motivations.
Doing It Right
As the project's founder, You'll want to establish a group of holders who consider your NFTs an investment in artwork and technology, not a quick-flip, speculative asset. While flipping them isn't legal, you must look for people who are part of your community with the right motives and award them whitelisting spots.
Free Mint
How it Works
As the name implies, the free-to-mint NFTs can be released to the public for free, other than fuel costs. In this bear market, where the liquidity and funds are in short supply, the free mint has been a popular alternative for many project owners. Deciding to defer the initial capital out of the primary sale profits, those who choose free mints usually earn money through the secondary royalties earned on sales of all collections.
One of the most well-known and popular Free mints known to the world is Goblin-town, which has paved the way for other projects like Moonrunners or Saudis. It was the original, anonymous brainchild from Truth Labs; Goblintown boasts one of the most loyal and dedicated communities of NFTs.
Pros & Cons
On one side, it's a positive change in the business as it lowers one of the significant barriers to access for everyone: price. The project must be well-thought-out, diligent and committed to delivering real value to the people who own them. From the founder's perspective, when the project is not a success and does not take any action toward its plan of action, then the volume of trade (and the income of the founder) will be affected as well.
However, when manipulated by criminals, Free mints could also be a severe threat. While free mints are becoming more accepted and accepted, there are increased instances of "free mint scams," which claim that traders are minting an unrestricted NFT and are, in fact connecting their wallets to a deficient smart contract that takes away the wallets of users when transactions are approved. According to PREMINT's Founder Brendan Mulligan, this has been a major issue in the industry.
Doing It Right:
Most founders release free mints with legitimate motives, which is not surprising. However, be careful not to slander or defraud your community.
Dutch Auction
How It Works
While most NFT projects are based on Fixed mint prices, some (especially in the art world) prefer auction-style listings. While English auctions (think eBay or traditional bidding at auction houses) are relatively simple, Dutch auctions are a bit more complicated.
The Dutch auction can be described as a method of bidding which uses a declining price format. The auction begins at an upper price before slowly dropping it at regular intervals until it reaches the lowest amount it can be (resting prices). The auction will end at the point that the collection is closed or the group reaches the level of the resting price.
Let's look at Shvembldr's Alien Insects which was released under the ArtBlocks Playground collection. The total number of Alien Insects were offered for sale through Dutch auctions, starting at 3 ETH, which was later reduced to 0.25 ETH every 5 minutes. This is the sequence of the sale.
Pros & Cons of Dutch Auctions
The main benefit of Dutch auctions is the ability to stop gas wars through massive demand. However, there's also a social element. When you use standard public mints, most of the expensive cost of gas goes to miners' pockets, as Art Blocks Founder and CEO Erick Calderon explained in a recent Discord posting. In Dutch auctions, most artists give portions of their earnings to charitable organizations or community DAOs, which may increase collectors spending money for the project.
However, while they are good in theory and intent, Dutch auctions don't always perform smoothly. In the lead-up to their Otherdeeds drop, they claim that Dutch Auctions are a joke and claim (after the launch of multiple Dutch auctions themselves) that dropping auctions fail to manage gas wars or reduce demand efficiently. However, they were unable to do so. Other deeds failed to solve the issues, and an inefficient smart contract led to the loss of 64,000 Ethereum ($175 million at the date of the mint) in less than 24 hours.
Others in the community, such as Purrnelope's Country Club founder and the former NFTBOXES founder Carlini, argue that Dutch auctions harm those who are the biggest supporters of the project, who are the first buyers, but who end up paying an increased bill. To stop this, some drops, such as The Writer's Room Azurbala, automatically reimburse minters for the amount resulting from their first mint and clearance price.
Doing It Right
Ultimately, the community's response to Dutch auctions is usually an unintended mix. But there's one action that everyone who takes part in a Dutch auction will appreciate: refunding the difference between the original mint price and the clearing price.
Token-Gated Presale + Public Sale
How It Works:
Like allowlists, token-gated presales are presale drops restricted to NFT holders from a specific group (or groups). One excellent example can be seen in the Illuminati NFT launch, which took place in three phases, with each stage granting access to different well-known NFT communities.
The post-sales with token-gated gates are also popular that allow holders of tokens to claim their NFTs for a specified time after the public sale without time sensitivity and insane gas prices. Other deeds, possibly the most anticipated event this year, permitted everyone BAYC or MAYC owners to get NFTs up for 21 consecutive days following the sale. For those considering flipping, buyers can check how the project will perform before making claims.
Pros & Cons
Token-gating can be a fantastic method to thank existing members who have been supportive and to encourage new members to become part of your group. However, many, but not all, of the negatives of public mints remain in place in this area.
Doing It Right
Instead of the usual allowlist spots that could be sold, traded and rented out for participation, token-gating guarantees that your most loyal supporters (or those that your partner) will remain in the process of expanding your project. Being a founding member, creating results for your community must be at the top of any decision you make.
Smart Batch Auction
How It Works:
Innovative batch auctions can be among the most recent, creative types of NFT drops designed to reduce the effects of gas wars and network congestion. In this case, as outlined by FrankieIsLost, they make bids on an intelligent contract that specifies the price they wish to purchase and the number of tokens within a specified bidding period. When the bidding period has ended, a clearing price is determined to be able to meet supply and demand. Bidders who bid higher than the clearing price are awarded NFTs and are reimbursed for any difference in bid and clearing price. People who bid lower than the clearing price will be refunded in total.
Pros & Cons
Although we haven't witnessed any Smart batch auctions on the market, this is an exciting idea for developers and founders to consider. Although Smart Batch Auctions may solve some of the issues that plague gas conflict and congestion on networks, their effect isn't yet proven. Based on the current state of the concept, there's likely to be an educational curve for future minters, which could discourage those who want to mint in an already soft market.
Doing It Right:
Like all innovations, be sure to conduct your research and anticipate lots of feedback from your customers.
In the end, there is no proper method to eliminate your NFTs. However, there's a method to implement the strategy you decide to use. Think about which will benefit your customers, provide the best user experience, and follow through with a consistent approach. Remember that your drop will be the first point of contact for many potential and potential holders. One of the last things you'd like to do is to start with a wrong note.
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