Learn how to properly begin an NFT project by eliminating exploitations during minting, assuring equitable distribution, and decreasing the cost of gas fees while minting NFTs.
In 2021, non-fungible tokens, or NFTs, swept the globe; if you are considering starting your own NFT project, congratulations! Ambition and achievement go a long way toward reaching one’s goals. There is potential for people and groups to generate socioeconomic value in the metaverse.
Today, we will discuss how to establish an effective NFT project. Remember that there are hundreds of unsuccessful NFT drops for every successful one. Due to technological challenges, bugs, or a lack of attention to principles, they become obsolete.
From what we have learned so far about the non-fungible token (NFT) market, developing a high-quality NFT project is one thing but quite another to launch it properly. With over 10,000 NFT projects listed in nine categories on OpenSea, the biggest marketplace, NFT collections are abundant.
However, what makes an NFT project valuable? This tutorial will cover all your considerations before establishing an NFT project. But first, let’s establish a foundational understanding of the metaverse and NFTs in general.
See Also: Top 10 NFT Marketplaces List
What Are NFTs?
Non-fungible tokens, or NFTs, are chunks of data kept on the blockchain. Consider the blockchain to be a decentralized, non-proprietary database. Instead, several contributors are accountable for maintaining the same database version. NFTs can be any data.
They may include images, videos, music, text, and any other type of creative material. Due to its storage on the blockchain, each NFT is unique, and its ownership is verifiable.
NFTs permit digital scarcity. We understand that the shortage of real-world goods is a prerequisite for their worth. NFTs allow internet items and data to have a monetary value.
What Constitutes a Successful NFT Launch?
Regarding NFTs, success is subjective. While some evaluate the debut of an NFT initiative based on its first buzz and if it sells out in minutes, a more complex success indicator focuses on the efficiency of the underlying procedures. These are the primary areas of worry for the latter:
- Unexploitable fairness
- User experience
Let’s examine what each of these terms means:
a). Unexploitable Fairness
If you ask any NFT collector what they anticipate most about a newly established and promising project, the answer will often be the opportunity to buy some of the project’s rarest NFTs. When an NFT project becomes live, interested projects may interact with the project’s smart contract to mint NFTs with varied qualities. On the secondary market, an NFT’s value increases in proportion to the rarity of its qualities.
Consequently, most individuals engage in these launches in the hopes of acquiring NFTs with the most incredible rarity ratings. The idea that the whole process depends on the random distribution of elements has contributed to the widespread adoption of NFT marketplace development Services launches. In essence, the standard view is that chance, rather than a fixed need, plays a crucial part in determining who obtains the rarest mints.
However, if history has taught us anything, such structures are always vulnerable to exploitation. Consequently, it is unsurprising that some players try to increase their odds of acquiring the most expensive NFTs during the minting phase. In most instances, these individuals deploy launch exploitation tactics.
This may be accomplished by searching for methods to extract the metadata of the NFTs in the collection. It is simpler to interpret the frequency of qualities in each rarity score using the information. With this knowledge, all that remains is managing the NFT project’s smart contract so that only NFTs with high rarity ratings are created.
If this occurs, the previously promised random distribution is lost, leaving the average participant with the less valued NFTs.
Consider, for instance, the debut of Meebits by Larva Labs. An attacker extracted information from the IPFS (interPlanetary File System) distributed storage protocol and developed a smart contract that verifies Meebits ID before completing the minting.
The minting procedure is immediately reversed if the Meebit’s ID does not meet a predetermined rarity score. As a result, only transactions involving minting rare Meebits NFTs were completed.
The solution is relatively straightforward: adopting a launch model that benefits people with little technical knowledge or familiarity with the complexities of blockchains and smart contracts, therefore putting average consumers at a disadvantage.
You May Like: Top 5 Industries Adapting to NFTs with Case Studies
b). User Experience
User experience is also examined when evaluating the success of the introduction of an NFT project. Developers would be well-advised to use minting techniques that do not overcomplicate matters, given that blockchain and cryptocurrencies are typically seen as being problematic. Basic models would level the playing field for those with less technical aptitude and blockchain expertise.
c). Price Effectiveness
It is important to note that the cost of minting NFTs may exceed the mint price, mainly if the NFT project uses a first-come, first-serve (FCFS) paradigm.
Naturally, the FCFS paradigm, seen during the launch of Otherside, the NFT-based metaverse established by Yuga Labs, causes an increase in gas prices. Since this launch was widely anticipated, many transactions were sent to the Ethereum blockchain, making it difficult for the network to scale effectively. As a result, customers had to pay higher fees for miners to prioritize their transactions. As a result, it was discovered that participants paid almost $176 million worth of Ethereum in transaction fees alone.
Successful NFT initiatives have as one of their primary objectives the development of robust communities around their holdings. Regardless of one’s opinion on Bored Apes (BAYC), one cannot ignore the power of its community, which includes eateries with a BAYC motif and Ape holders wearing goods symbolizing the project.
To accomplish this, it is essential to distribute NFTs to various users rather than focusing on a specific demographic or geographic area.
Finally, the related procedures must be untrustworthy. In other words, customers should not be forced to believe that the operator or developer would apply appropriate methods and mechanisms, thus adopting blockchain technology.
3. How to Successfully Launch an NFT Project
After discussing the criteria that are evaluated when evaluating the effectiveness of an NFT launch, it is time to discuss how you might optimize your future NFT minting event. Let’s first analyze the four primary stages of an NFT launch.
- Bidding: The launch phase during which potential purchasers are anticipated to bid to the smart contract or operator.
- Clearing: During this phase, the intelligent contract compares the offers against the remaining NFT supply to establish a fair clearing price and the winning bids.
- Distribution: Following the conclusion of the clearing phase, it is time for winners to claim or receive their newly-minted NFTs.
- Metadata Reveal: In the last phase, the operator or visionary contract discloses NFT characteristics.
The challenge then becomes how can all of these processes be optimized.
a). The Phases of Bidding and Clearing
Initially, it is essential to determine if a continuous or sequential strategy for bidding and clearing is appropriate for your launch.
Bidding and clearing happen concurrently in a continuous process. Here, each bid is instantaneously matched with the remaining NFT collection stock. The approach of first come, first served is a classic illustration of the continuous model outlined in this tutorial. As previously indicated, this strategy significantly strains the underlying blockchain infrastructure. It also increases transaction costs.
A superior approach implements the bidding and clearing processes more consecutively.
Unlike the continuous system, the sequential technique guarantees that the bidding and clearing periods do not overlap. In other words, the operator or smart contract accumulates all offers for a certain length before trying to match them with the remaining supply.
This technique enables the operator to decide the fair clearance price, one of its advantages. Additionally, there is no opportunity for an unwarranted increase in transaction costs, as customers are not attempting to beat the rush. As project bids often take days, it also permits individuals from various time zones to participate in the event.
Other considerations must be made based on the shady character of the bidding process. The objective is to guarantee that most operations are conducted on the blockchain rather than in an off-chain configuration that needs consumers to trust the developer’s honesty.
b). The Phase of Distribution
The primary topic of discussion at this phase is the necessity to build systems that issue tokens, distribute them to their proper owners, and reimburse losing bids. The objective is to maximize the efficiency of these operations. To avoid gas auctions or cost inefficiencies, it is desirable to give NFTs to successful bidders in batches rather than opting for a primary distribution method that might cause gas prices to skyrocket.
The distribution phase is crucial because the possibility of earning a profit on the secondary market may motivate users to claim their NFTs simultaneously, putting the whole network at risk of a gas price increase.
This may be prevented by barring users from claiming NFTs. Instead, the operator will gradually distribute NFTs to successful bidders. This reduces the effort required for users to get tokens. The sole condition is to include a delivery cost in their first NFT payment.
c). Metadata Reveal Phase
The last phase includes the disclosure of the NFTs’ characteristics.
To guarantee that the totality of the launch cannot be exploited, the metadata disclosure phase must be the last step. Remember that a leak of an NFT project’s metadata may give attackers the necessary knowledge to manufacture the rarest NFTs selectively.
The most effective countermeasure against such exploits is to protect the metadata until the end of the minting process. There are three choices when deciding the time to release the metadata of a freshly launched NFT project.
- Full-Collection Revelation: In this case, the major reveal occurs after all the NFTs have been issued. Although this is fuel-efficient, it may delay the release of information, mainly if the collection sells slowly.
- Per-Nft Disclosure: The second option permits the disclosure of metadata per NFT. Each user can expose the properties of their NFTs immediately after minting them.
- Batched Reveal: There is the ability to use a batch method that permits a more customizable approach to the reveal. Users may opt to open their NFTs once they have been created or wait for the operator-scheduled metadata disclosure date.
In this blog post, we have covered the critical steps involved in the launch of an NFT and how to optimize them. Overall, the primary objective is to avoid exploitations, maintain the fairness of the distribution, and lower the costs associated with minting NFTs. Now proceed to launch your NFT project successfully!