Less than 21% of people who sell their newly-minted NFTs without being whitelisted turn a profit. 75% of people who do so after being whitelisted make money.
By the end of this article you’re going to know:
NFT whitelisting is a process used by NFT projects to grant exclusive access to minting NFTs to a specific group of people.
Whitelisting refers to approving a list of wallet addresses with special rights to mint one or more NFTs before the public launch at a lower cost.
These wallet addresses are granted early access to the project's collection, usually for 48 hours, and are curated by NFT projects to reward early supporters who have contributed to the project's development and publicity.
NFT whitelists were developed in response to a few key issues that were affecting NFT projects.
With thousands of interested investors fighting for a limited supply of NFTs, fierce competition and bidding battles became commonplace.
This prompted the adoption of whitelists, which have solved many of the central issues.
NFT projects use whitelists because:
NFT whitelisting offers exclusive early access to a select group of community members for upcoming NFT releases. Whitelist perks can include free NFTs, exclusive content, or discounted presale access, with each project offering a unique whitelist offer.
Successful NFT launches need a lot of early publicity. But, early supporters may miss out on NFT sales due to intense competition during the release. This can lead to a loss of motivation to promote future projects, which is detrimental to a space that relies on hype.
NFT whitelists solve this issue by guaranteeing early access to NFTs for project supporters, ensuring they get their hands on tokens before the official launch date. This creates a loyal base of supporters who can continue to promote the project with enthusiasm
High transaction fees and network congestion can plague NFT sales, leading to what is known as a "gas war".
During a public NFT sale, many users competing for minting transactions can drive up gas costs . Whitelisting allows only a select number of wallet addresses to mint NFTs before the public sale, reducing the likelihood of network congestion and gas wars.
By establishing a specific timeframe for NFT minting, whitelists reduce gas issues.
A whitelist sale with high demand creates hype around the release and potential later releases.
It's important to note that gas prices vary depending on blockchain network traffic and external events. Transaction fees on blockchains like Ethereum can become high during a popular NFT launch, leading many potential investors, including early supporters of the project, to be priced out.
Buyers are willing to pay more for a quicker transaction to secure a limited NFT, creating a digital auction and a "gas war".
Whitelisting eliminates this issue by giving buyers a certain time window to buy their NFTs, removing the sense of competition and resulting in a fairer, more democratic, and efficient system where people don't have to waste cryptocurrency to complete a purchase.
The high demand for some NFT releases attracts bad actors looking to take advantage of desperate investors. Scams and phishing links are commonplace, but whitelisting can combat these issues and keep users safe.
Spam accounts can also complicate NFT launches, especially when nefarious actors register hundreds of accounts at once. NFT whitelists prevent this type of behavior, ensuring a clean and healthy digital environment for actual buyers who are interested in the tokens being minted. NFT whitelists are a crucial tool for creating a fair and secure environment for all users.
One of the benefits of being on a whitelist is gaining access to anticipated NFTs and eliminating the risk of missing out on the initial minting process or having to pay higher rates on the secondary market.
Whitelists are especially beneficial for NFTs that sell out immediately after launch, as they provide collectors with guaranteed access to all the virtual tokens they desire.
NFT projects frequently offer free NFTs or discounted prices to whitelist members during the whitelist period.
These deals and perks are sometimes extended to all members, while other times they are only available to early whitelist members or through a raffle or contest.
Being on a whitelist allows you to buy an NFT from the creators at the base mint price, avoiding the need to buy from secondary market investors at higher prices.
If an NFT project is successful, prices may never be as low as they were during the whitelist period.
You are more likely to make money if you join a whitelist.
According to data from OpenSea, whitelisted users who sell their newly minted NFTs make a profit 75.7% of the time, compared to 20.8% for those who are not on the whitelist.
The data also suggests that achieving outsized returns on minting purchases without being whitelisted is nearly impossible.
A breakdown of newly-minted NFT sales based on the ROI achieved by the collector shows that whitelisted collectors who bought during minting outperform those who did not.
NFT whitelisting is an important part of the NFT market and can provide significant advantages to investors and creators.
While the application process can vary from project to project, being connected and informed about new developments can be beneficial to users hoping to get whitelisted.
Being on a whitelist means higher chances of getting outsized returns.
Joining a whitelist is not a guarantee of success, and you should always do your research.
The potential benefits of being on a whitelist make it valuable for NFT enthusiasts looking to make the most of their investments.