Episode 7-NFT whitelist and the strategy behind free mints

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Transcript

Find below the transcription of the video from Amit Vyas and Andrew Thomas.

 

Andrew

I'm good, I'm good. How are things? So we are jumping into our web three digest show and I have a droopy mic. Let me just let me just tie this up. It's not a euphemism. So, good stuff. Welcome to show guys, if you're listening and watching to the Web3 Digest. We’re talking white lists and also free mints today, right Amit?

Amit

All in the context of NFTs. 

Andrew

All in the context of sleepless nights, you know, because you're in the wrong time zone for some of this buzz. So I think, do you want to start by explaining what whitelist and free mint is?

Amit

Sure, do you want me to?

Andrew

Yeah, okay. 

Amit

I’ll do one. So, ultimately what happens is NFT collections are launched and collections are normally made up of multiple NFT s, right? So typically they could be anything from, say 1000 to 10,000 is what you see, um and a lot of the time based on what that NFT is trying to achieve. So is it something that's on the back of a community that's been formed? Is there some sort of utility that's tied into it? I think a really kind of good example recently is for the Stickmen Toys project, which is a collaboration between Warner Records in the UK and then Bows. And they've been building a community for the last few months and all of a sudden they said, right, we're ready to launch our NFT and to get white listed. You needed to have, you know, a couple of other things, right? You need to follow them on Twitter, you needed to be on their kind of Discord channel. You needed to perhaps own another NFT from a partner collection, but ultimately, you know, there's, there's a, there's a series of things that you typically need to do. Some things are easier than others and then that gives you a chance of being whitelisted, which basically means that if they've got 5000 NFTs being released, if you're whitelisted, that means that you'll be  guaranteed to get the opportunity to get one. 

Andrew

Yeah, you still may have to pay for it. You may get it at a lower price potentially. 

Amit

Yeah, potentially. 

Andrew

Yeah, I think you should get it early, like these mints when something goes mint and it's obviously got a buzz on a project, you know, you're talking about potentially minutes that can sell out in a collection that sense.

Amit

So having that kind of whitelist kind of safeguards that. You normally have maybe a 24 hour advantage over a potential public man where you can go in and obtain your NFT or NFTs based on what you want. 

Andrew

And usually they'll give you a limit, right?

Amit

Yeah. And then usually that can be just related to the project. So some projects will say, look, only one mint per wallet. Others - there was one, there was one that we got involved in the last, a few weeks back, and for whatever reason they said there’s 20, you get 20 per whitelist and it was a free mint. 

Andrew

Right? Okay. Cool. Cool. Okay. I mean so that kind of nicely brings us into free mint. So we wanted to talk about these two things basically quite kind of busy out there at the moment anyway essentially a free mint is exactly what it says. You know, obviously we've I think we've done the basics before from a safety perspective when you go and purchase an NFT obviously usually at the moment predominantly kind of Ether or Solana, when you purchase it there's a certain amount of gas fees associated to minting it. So on top on what the actual NFT costs, you have to pay a gas fee. Obviously with a free mint, the idea is that well actually it will cost you nothing. You're just essentially paying the gas fee/

Amit

Like a transaction fee.

Andrew

Which is like a transaction fee. So think of it like a credit card transaction in that sense. So there's now been a lot of projects that kind of, you know, are jumping into that space from a, from a free mint perspective. So I think, I mean, some of the popular collections that are out there at the moment or on the back of a free mint. Right, so some of the ones that are potentially quite big are also on the back of a free mint. 

Amit

Yeah, there's a few things I think which are quite, quite interesting in this space right? Because I think what you've got is, and I think if you're about to launch a collection I think that's one of the key decisions that you want to make, because ultimately you want to generate some sort of revenue or there has to be some reason for you launching a collection. Um, and so you can either choose to launch it as a free mint  or you can charge a nominal fee.

Andrew

Like Tiffany, right? 

Amit

So Tiffany, yeah $52,000.

Andrew

So I mean that is something that's obviously current at the moment that's basically out there and you know they're doing. Tiffany obviously, as we know, the jewelers doing an NF.Tiffany

Amit

NF-Tiff

Andrew

NFTiff, sorry NFTiff, but wildly already someone has done Tiff Punks. Yeah so and had that minted free and blah blah blah people piggybacking on the hype, right, in that sense. But yeah so you've got to make a decision, I think in those projects, you know, do you want to do you want to attach a value to that, you know, and that may be like an artistic value or it may be, you know, there's something on the back of it. So I think examples of that recently would have been like Etihad Airways where it's $306 to mint the NFT. But immediately you got silver access to their loyalty club, you had like an airport transfer. There was some like monetary value associated to jumping in and spending money on that. Right? So

Amit

Yeah and I think then obviously, you know, it's easy then to try and justify the cost, right.

Andrew

Yeah.

Amit

There's a couple of things I think a lot of brands are looking at this saying - well do we want to go down the free mint road? And I think a lot are choosing to do so. And I think it does make sense because you know potentially there's much less kind of recourse from the people who you know purchase free mint from people who maybe spent, you know, $200 - $300 on a mint, for example, on an NFT and perhaps let down. Right? 

Andrew

Yeah. 

Amit

So for whatever reason, you know the company can't deliver what it promised from a utility perspective or the experience is poor... And rather than have a backlash of people saying “hey I've just spent hundreds of dollars on this NFT and it's useless I'm gonna now lose money,” it’s sometimes easier for a brand to say: you know what, we don't necessarily need the cash from an NFT, and actually if we make this successful we're going to generate revenue anyway which I think is a secondary part of this, where a lot of free mints or, you know, free mint collections when they're initially launched and given away. So you'll see a lot of collections at 10,000 items for example. And I think there's a couple of reasons why they do. The first one is: it's really easy to then say “hey, we've sold out,” when 

Andrew

You haven’t sold anything, you’ve given it away.

Amit

A lot of people like things for free. 

Andrew

Exactly.

Amit

And then the second reason is just that, that lack of, you know, there's much less kind of recourse right? People are going to come back and start screaming at you. 

Andrew

I think also as well, look, I mean it kind of fuels the whole environment at the moment. There's, you know, there's people in this space that are flipping these free mints right? So you know, minting a certain amount and they're making dollars on the penny as it were, kind of flipping them over and again that drives secondary sales and everything. So obviously once you have, as you said that, most of the kind of free mint, you know that I've been following that “sold out” is on their Twitter, it's on their Discord… It's, you know, it's, kind of heavily, heavily, heavily publicized, right? 

Amit

Yeah, and they're trying to drive demand and but now if something is sold out and obviously, you know, someone then goes and buys one from the secondary market. Typically people are making between 7.5 and 12% royalty fees and that's where that revenue starts to kick in. 

Andrew

Exactly. 

Amit

I think in the previous episode we spoke about the Goblins and how successful that is, right? That is a free mint. 

Andrew

Yes. Yeah. I think that that should be, that’s a good, valid point. And the other reason that people are actually looking at this whitelist giveaways and these free minutes and why they worked pretty hard on it is the fact that they're looking for that next project. They're looking for the next project that could be potentially life changing or could potentially kind of put some more money on the table as well, right, as well.

Amit

I think the challenge, the challenge with all of this is, you know, there's definitely a trade off, right? So I'm seeing a lot of premium where you can try and get whitelist platform called premium and they're now asking for a minimum amount of Eth in your wallet -

Andrew

And you have to put Twitter, Discord, email.

Amit

Plus, plus, plus. 

Andrew

Yeah.

Amit

And the reason they're doing that is because they want almost kind of disqualify the speculators who are coming in 

Andrew

And the bots.

Amit

Yeah and the guys who are ultimately, you know, penny stocks. The same sort of mindset: Goes up double, they’re happy to walk away with $50. Right? 

Andrew

Paper hands is what they call it.

Amit

But this; it does create that as a challenge because you're potentially attracting the wrong audience, you know, when you're giving away something for free. Right? And so that's the same with all walks of business, right? 

Andrew

Yeah, you see that, I mean it's that valuation piece, right? So the value, the value perception of the actual value associated with the NFT, you know when people are trying to instill some value and then you've obviously got people that are kind of listing let's say on the secondary market far below market rate that can fluctuate. And I think the thing is, what we should say is this as well is: it happens very fast in real time. I've been involved for the last couple of weeks basically, no sleep on US time zone but but seeing how fast these things can mint out, obviously because they're free, then obviously move to secondary market then see them go up and down and see it fluctuate, and then obviously there's a reveal piece and once it reveals and perhaps the next episode we can possibly look at some rarity in some of those things and take a bit of a deeper dive into it. But yeah. Cool. Good stuff. Alright guys, we're always trying to make these short, punchy. We hope that kind of gives you a bit of an overview of free minting and whitelisting. As always if you want to get in contact with me and Amit, shoot us a tweet. Drop us drop us a LinkedIn shout out. And obviously we're happy to have a conversation but in the meantime,  thanks Amit. 

Amit

Thanks Andrew. 

Andrew

Cheers.