Make Or Break: Why NFT Drop Mechanisms Matter
Drop mechanisms for NFT projects have evolved as quickly as the medium itself. There are many factors to consider when deciding how to deploy, like how to effectively reach an audience while remaining inviting and attractive. This in turn is influenced by whether the drop is an open edition, limited edition, auction, or something else entirely.
There is no one-size-fits-all solution for a successful NFT drop. The key is to fully understand the purpose of a project, what it is trying to achieve, and the value it brings to the artist and the community.
Good mechanisms are inclusive
Community members often end up becoming victims of gas wars. Poorly designed Whitelists (or Allowlists), where projects simply execute FCFS (first-come-first-served) procedures without properly noting the drastic effects and aftermaths of such measures, can cause this to happen. As a result, whales (entities that own a large amount of a particular cryptocurrency) enjoy an unfair advantage while leaving collectors with less money to spend far behind. In some instances, the inefficiencies of minting contracts can deal heavy blows to collectors as well. These inefficiencies create miscalculations of gas limits, which then create a wave of unnecessary failed transactions.
Certain NFT drops also fail to consider that highly-skilled operators can create bots to purchase NFTs instantaneously — bypassing the normal human motions of collection. This is extremely detrimental to a successful drop as bots can create an absurd amount of wallets to buy up all the available editions of a project, leaving collectors little or nothing left.
What all NFT projects should strive for
A desirable NFT launch should be fair to all buyers. It should be timezone-agnostic and gas efficient enough for the everyday collector. If a project is truly looking to onboard first-time collectors and is planning to introduce the NFT medium to those who are unfamiliar with the space, time-sensitive conditions are unnecessary as they do not create the best results.
There are many ways to solve this.
Redefining the Whitelist process: The TR Lab Way
We believe innovation can be applied to an NFT project every step of the way, including the Whitelist process. In our eyes, this process is an opportunity for the NFT community to do a deep dive into a specific artist and their endeavor within the space. This belief was put to the test in our ground-breaking multi-artist NFT project AI 2041, where we structured our Whitelist process to reward our earliest supporters, facilitate active engagement from the general community, and minimize senseless waste of ETH in gas wars.
The process was composed of two types of Whitelist access: General and Reserved. While the Reserved Whitelist was only made available to TRLab genesis NFT owners, anyone was able to participate in the General Whitelist raffle by completing a few tasks and cracking the secret code with clues from the artist’s Twitter and AMA session.
These requirements not only discouraged bots and flippers but also provided educational opportunities for collectors to learn more about the project. Additionally, unclaimed mints from both the Reserved Whitelist and General Whitelist were available to the public, making the drop inclusive for all types of collectors.
We’re always happy to help shape the NFT world. Successful and effective drop mechanisms can be accessible and fair when the community and user experience are prioritized. Everything else will eventually follow.