NFT and crypto currencies have gone along way since 2009. Now, a lot of people are invested and are seeing the profits of their initial investments years past. If you’re new to the NFT market and have plans to become an NFT collector or creator, chances are you’ve encountered the term “whitelisting” and are not quite sure what it is. Questions like the ones below are pretty common:
We’ll explain the basics of whitelisting to you and show why it has become a norm in the NFT and Crypto industry.
For people new to the whole whitelist in crypto process, you may be wondering what whitelisting is. Think of it as a reservation to a well known restaurant joint in town. Or, like a pre-booking ticket to a concert. Whitelisting is essentially, NFT creators and developers creating a list of people who will get first access to their NFT product.
Now, if you’re an NFT collector or planning to become one, whitelisting is something you should become very familiar with. Why? Because it’s become somewhat of an industry standard when releasing new NFTs. You see, NFT releases can be quite tricky and whitelisting resolves many of the issues arising from new drops. If you’re an artist hoping to create NFT art, or an investor planning to launch an NFT project, here are some of the perks of NFT whitelisting:
Return on investment is vital to a business, and whitelisting aids in getting sure sales. You avoid scam buyers through the whitelist process rigorous eligibility criteria which the NFT creator or the team working on the project can set themselves.
Examples of such criteria include requiring active engagement on social media platforms using their real accounts.
Gas wars can be liken to a price hike in the market due to high demand. For example, when the pandemic hit, masks were hard to come by and people often raised the prices to leverage on this demand. When an NFT drops on a public market the price for it fluctuate and even escalate to extremely high amounts.
People with money will pay more to get first in line to the cue, resulting in prices rising. The term gas in “gas wars” refers to the transaction fee you need to pay to get your NFT minted. Whitelisting removes this hassle by selecting who can get access to the NFT, which equates to less gas wars.
In an open public sale, anyone can bid and purchase which opens up a lot of loopholes for both the seller and buyer. Whitelisting covers up these gaps and allows for a more controlled and selective process. You won’t have to battle it out with tens of thousands of potential bidders since the list is predetermined.
For example, instead of having to validate 19000 buyers, you can lower it down to just 8000. This predetermined list will make buying and selling easier.
Whitelisting allows buyers to get sure access to the NFT drops before the actual launch date. This early access can even be a few months before the official launch giving you lots of time to build up your NFT and reap better rewards. Aside from a secured purchase, you also avoid all the unnecessary stress that comes with public sale. Such as having to purchase from secondary markets if you missed the first release. By the time you get your NFT from another marketplace, the price would have doubled or even tripled.
Early access means convenient minting process. Minting refers to adding the item you’ve purchased in the blockchain so it can’t be tampered or duplicated by others. Once minted, you’d get a certificate validating that the NFT is now yours.
Whitelisting makes the process smoother, since you have the NFT before anyone else. You don’t have to fight thousands of people for the block on the network. This limits the gas you’d use to get the item minted and the time you’d spend getting it on the blockchain.
One of perks of whitelisted releases is that the item drops are of uncommon to even rare in quality. Majority of the NFTs released are of limited edition quality, for example, MetaClash’s upcoming NFT collection will feature uncommon drops and even 8 legendary items. For you as a buyer, this means you’re getting more for your money than just early access.
It’s also crucial to note that the NFT drop you get during the whitelisting event will depend on your performance during the campaign. So, if the creators require X number of discord posts and you exceed that you’ll increase your chances of getting a rara drop.
Another perk of getting whitelisted NFT or even for Crypto is getting the items at discount prices. Project creators release their whitelisted items at 10% less or more compared to market price. With the discount you’d get you can purchase more or even sell higher in the future to get a return on your investment.
NFT creators also partner with other companies who in turn give additional discounts and promos to buyers included in the whitelist.
As with any investment in the market, there are instances where fraudulent activity happens. Extra caution and well thought out decisions should be made before investing. When it comes to NFT drops and projects, there are three ways you as a buyer can get involved. One is private sale where in you get items at very low prices but the risk involved is high. Next is the whitelisting where only a limited number of people can purchase the item at a discounted price. Last is the public sale.
Now with these three phases, whitelisting is the least risky and limits your chances of scam sales since the initial funding has already been given during the presale. Meanwhile, a public sale opens you to a lot of hurdles from scalpers to high gas fees.
One big issue with going immediately to public sale for a project is mass registration of accounts. The seer volume of the people wanting to get an item makes regulating the buying process difficult. As a project manager, you won’t have time manually check if the people trying to make a purchase are true buyers. This lack of checking opens loopholes that scammers and even competitors can use to their advantage.
Whitelisting helps NFT artists and project creators avoid this pitfall by setting strict criteria for people hoping to make a purchase.
For a new project to flourish, it’s vital to give acknowledgement and rewards to true supporters. Fans of the project dedicate large amounts of their time supporting and spreading the word to other people. The whitelist process rewards them and incentivices others to follow suit since proven support will get early access to the NFTs.
The rewards shows your supporters that you value them and in turn help you build a more solid fanbase. Most projects such as those of MetaClash provide more than early access but also other rewards like rare NFTs, promos, and battle passes. Check out their Genesis Collection Whitelist Event to see the possible offers NFT creators give to their supporters.
Gas wars can be detrimental to your prospect buyers and can deter many from following your project. For a newly launched NFT game or art, encouraging more fans is necessary for project longevity. Aside from the effect it will have on your supporters, gas wars also take much more resources from buyers instead of pooling it into your product. Most of the money from gas wars go to the networks and not to the actual founders of the NFT.
Let say for example, your project managed to earn 2 million dollars in sales, but an inevitable gas war occurs due to the popularity of your project. Though you earned 2 million in sales, the network will have earned twice as much at a whooping 4 million. Using a whitelist process will prevent your buyers from paying extra for fees and in turn allow them to invest more in your NFTs.
If one fake buyer is trouble enough, you can also encounter spam ones trying to sabotage your sales. Spam buyers are people who create multiple fake accounts and try to secure the NFT thus blocking out real buyers. They buy bulk NFTs which causes the item price to soar then when they’ve made enough money they’ll drop your project. This leaves a bad effect on both your project and the buyers.
Creating a whitelist and validating each account will prevent such buyers from coming near your NFT project.
The final benefit of whitelisting is verified purchases. The list would enumerate how many buyers will make a purchase, and you as the buyer can decide which drops will go to whom. This process of predetermination allows you to calculate how much you’ll earn in the initial launch. The buyers in your roster are all validated with real working wallets which leaves out spam and fake buyers.
Once the initial release is done you can create another whitelist event for your future drops.
Whitelisting is more than just a process. It a saferail for NFT artists and enthusiasts to keep people with bad intentions at bay. It enables NFT project managers to establish a democratic and fair way for all buyers to get an item without spending so much on fees. Through whitelists, supporters get recognized for their efforts.
The benefits of using a whitelisting process for NFT sales is undeniable, without it NFT collectors and creators would find themselves in a very inhospitable environment riddled with scam buyers and spam accounts.