With the non-fungible token (NFT)-mania growing and more interested users joining the bandwagon, creators are deliberately incentivizing select community members using NFT whitelists.
Creators allow these crème de la crème players to mint tokens at a bargain, or sometimes free of charge, but most importantly, earlier than the rest of the regular community members.
According to the 2021 NFT Market Report by Chainalysis, statistics from the OpenSea marketplace showed that users who were privileged enough to join whitelists made over 75.5% profits after selling the NFTs they minted before everyone else.
Per the report, while 20% of the user addresses accounted for 80% of sales in the secondary NFT market, 5% of all user addresses accounted for 80% of profits made on secondary NFT sales. This means, therefore, that those not whitelisted only manage about 20% of profits.
Have you ever dreamed about making profits minting and selling NFTs in the secondary market? Did you read about hyped NFTs conducting whitelists, and you got tempted to join the fray but didn’t know how? If you answered yes, it’s in your best interest to learn about NFT whitelists, how to join them, and the steps you can take to get early access to NFT drops.
Welcome on board. In this article, we’ll tell you what an NFT whitelist is and the importance of getting into any one of the most hyped NFT projects. Joining one of those whitelists might have seemed next to impossible, but we’ll show you how joining one isn’t as hard as you have been made to believe.
What is an NFT whitelist?
Whitelisting crypto wallets offer a mechanism that guarantees faithful supporters early access and protection from unnecessary competition. An NFT whitelist is a database of select loyal buyers who get advance information and are allowed early access to mint.
In the world of NFTs, a whitelist is comparable to a VIP guest list for attendants of a special event. If you’re lucky enough to be on the list, you become one among a group of early supporters who enjoy special privileges.
If you’re a trader, you want to buy low and sell high. Since prices for popular NFTs are lowest immediately after the launch, there will be cutthroat competition during launches. The fierce competition among buyers for newly minted NFTs drives transaction fees to the roof.
To alleviate this problem and avoid disenfranchising loyal community members, projects dedicate a certain amount of time before the launch or drops so their whitelisted members can buy newly minted tokens before they’re made available to “outsiders.” Whitelisted users avoid hefty secondary prices and immense transaction fees for popular NFTs.
Your crypto wallet will sit on the NFT whitelist as you wait for your time slot. This mechanism makes NFT launches more democratic, ensuring early access for faithful supporters and avoiding the competition and gas wars often associated with popular NFT projects.
Why NFT Projects Organize Whitelists
Whitelisting is a common practice among NFT projects that serves two distinct purposes:
- A means of rewarding loyal community members
- A way of creating momentum before launching a project, also known as an NFT drop.
Projects use whitelists as a badge of honor for loyal community members who they choose from among their Twitter or Discord followers to give them access to pre-sales and protect them from the so-called “gas wars.”
There’s almost always an NFT project launching somewhere, meaning it can be difficult for NFT collectors or investors to keep pace and be ready to take appropriate action. Being on an NFT whitelist enhances the range of your market coverage, increasing your chances of making the most of the NFT market and making money from NFTs.
Since whitelisting is how NFT development teams drum up the buzz on their projects and promote a sense of community before the launch, the following are some reasons projects develop whitelists.
#1. Community Engagement
Adding loyal members to NFT whitelists is one of the ways that project developers reward active community members for their support and give their project exposure through social media, blogs, and internet forums.
Since the sheer number of new NFT projects can make it almost impossible for a new project to become noticed, whitelisting incentivizes community members to promote a project with a promise of a place on the VIP guest list. Developers typically organize projects through their Discord pages, which list the rules and requirements for joining whitelists.
As developers encourage community members to share information about NFT public drop dates, including where they can be minted, the potential benefit for whitelisted supporters is a higher value of the NFTs they mint. There’s nothing better for an investor than seeing the value of their tokens appreciate over time through increased attention.
#2. Reduces Network Congestion
Lately, gas fees in the Ethereum ecosystem have been a big problem, and anything like a famous NFT drop that introduces a spike in network activity can only worsen matters. The competition among buyers trying to mint NFTs simultaneously creates network congestion leading to an escalation of transaction fees.
Whitelisting creates a situation where all supporters don’t have to rush at once to try and grab an NFT. By introducing a whitelist, project developers help to scatter the NFT drops in phases. This process helps to moderate the issue of network congestion by regulating as it regulates the amount of NFTs per wallet and when the tokens can be minted.
The Pros of Being in a Whitelist 👍
Investors or fans lucky enough to join an NFT whitelist can accrue several benefits. Among the tangible benefits include:
Guaranteed Access to Mints
Good NFTs attract lots of attention, meaning buyers usually rush to mint them as soon as they’re launched, and chances of securing them can range from very slim to none. Whereas every collector would love to buy NFTs, most users don’t because those perfect ones often get sold out before the launch. Being on a project whitelist solves this problem by guaranteeing that you have access to all the virtual tokens you can afford.
Secure Rare NFTs
Securing the chance to get advance access to a project’s minting process is the surefire way to lay your hands on rare tokens in any collection that could potentially be many times more valuable than the rest. In most cases, if a project launched a collection of, say, 4,000 tokens, there is every chance at least 100 or 200 scarce tokens with features that make them more valuable than the rest.
Collectors and investors who wait until an NFT project opens for public minting almost always lose the chance to lay hands on those rare tokens. By being pre-approved to join a whitelist, the developers grant you a golden opportunity to acquire tokens you would otherwise never have.
NFT developers who want to create tremendous initial momentum for their projects often do so by offering free tokens or discounted prices for their whitelisted members. The developers boost their projects by providing several hundred whitelist spaces.
The NFT creators will almost always recoup any loss they incur by offering free or discounted whitelists through royalties they receive from the resale and the free promotions that whitelisting affords. The only way to get endowed with such discounted minting prices is by being on an NFT whitelist.
A less obvious benefit of getting a placement in an NFT whitelist is learning more about the entire NFT ecosystem by getting involved in NFT communities. The lessons you avail yourself of could make you a better and wiser investor.
The Cons of Being in a Whitelist 👎
Like all other mechanisms, a few drawbacks are involved in being part of an NFT whitelist. Some of these include: it’s your responsibility, therefore, to weigh between the pros and cons of whitelists and choose which way the scale tips before you decide whether to join or not.
Getting whitelisted is time-consuming as you must employ several hours to ensure your wallet address gets added to popular lists. It would be best if you created sufficient time to tout the token publicly and engage with other fans on different projects’ Discord servers to get noticed.
Returns are not Guaranteed
Like all other investments, getting on the whitelist does not guarantee that a project will pan out well. If an NFT project fails to gain traction, you will lose time and money.
Risk of Scamming
Due to the possibility of striking gold when things go as expected, the world of NFT whitelists is full of scammers ready to take advantage of potential investors hoping to join whitelists.
You must remain on your guard, especially when you receive unsolicited offers through direct messages asking you to follow random links from unknown sources.
How to Get Whitelisted?
NFT whitelist requirements can differ from one project to another, and there’s no surefire way to get into an NFT whitelist. However, project developers use different metrics to determine which users deserve a spot on their whitelist projects. The following are the basic steps to increase your chances of being included on the coveted list:
Locate a Good Project Early
A whitelist is only effective when an NFT project hasn’t been launched. It’s, therefore, paramount that you locate an excellent project before a drop and before it gathers a huge following. Consider following NFT experts and influencers on Twitter or YouTube, or keep checking on sites like Rarity.tools where upcoming projects are announced.
Join The Project’s Discord Group
Discord is famous for its NFT project activity. You can be sure to find announcements, introductions to founding teams, project roadmaps, giveaways, and instructions on getting into whitelists.
Follow the Eligibility Requirements
Make sure you know and meet the eligibility criteria for qualifying to join the whitelist of projects you may be interested in. If you’re eligible, you’ll be asked to provide your digital wallet address before you can get pre-approved for minting. Once you select the best time to mint from the available options, mark your calendar for the time and date and prepare for action.
Most NFT projects reserve whitelist spots for genuine supporters interested in and adding value to the project.
There’s no better way for founding team members to notice you than by actively engaging in their Discord chats and contributing meaningfully to project-related conversations with other community members.
NFT project owners generally appreciate it when they try to bring more people on board. You can participate by sending unique invitation codes to your buddies or Discord servers to invite other folks to the NFT project you’re promoting.
All Discord servers have multiple chat rooms they use for different purposes. If you promote an NFT project on a different NFT Discord server, use the “shill” chat room. “Shill” means to brag in the NFT world.
Participate In Giveaways
Take part in NFT giveaways on Twitter or Discord, where projects ask followers to share or re-tweet for a chance to earn a whitelist spot.
Sometimes NFT projects easily give whitelist spots to their early supporters without asking too many questions to create an initial demand for the whitelist itself.
Spend Some Money
Try buying some NFTs from a project creator or their partners’ collections. Some projects reserve whitelist spots for users who already have some previously released NFTs.
Can You Lose Money Minting A Whitelisted NFT?
While it’s possible to make money-minting NFTs, it’s not a get-rich-quick scheme because an NFT project can fall to zero. By minting an NFT, you only tokenize the NFT and ensure that the digital work is verifiable through the blockchain. And that means that even though you can buy and sell NFTs, there’s no guarantee that someone will buy them and that you’ll profit.
You also want to remain vigilant because there can be situations where scams occur when founding projects fail to keep their part of the bargain, in a fraud that’s known as a rug pull. Nonetheless, early access to NFT drops allows you to purchase an NFT at a total price earlier than the public sale.
Parting Shot 👋
Getting on an NFT whitelist may take a bit of effort, but those few days of action could be the link you’ve been missing so you could mint a unique NFT and sell it for a fortune. If you’re lucky enough, that could translate to several thousands of dollars within just a few days, all because you invested your time to learn and follow the strategies mentioned here and a bit of your money.
You may also be interested in knowing about some of the NFT marketplaces.