Bankless: Briefly describe 5 popular NFT placement methods and their advantages and disadvantages

Earlier this summer, I wrote an introductory article on the NFT smart contract approach .

Determining an underlying smart contract approach is half the battle when launching an NFT project. The other half comes from deciding which NFT Drop method to use.

Of course, NFT contracts and Drop methods can be configured in various combinations, and it is entirely possible to mix different Drop methods in various ways.

In the current NFT ecosystem, there are some basic drop methods that you need to pay attention to.

Popular NFT Delivery Methods

Bankless: Briefly describe 5 popular NFT placement methods and their advantages and disadvantages

01 First come first served (FCFS) casting method

A method of NFT placement where minting is open to the public or specific NFT community members on a “first come, first served” basis.

Variants: 

  • Permissionless – Anyone can mint on top of FCFS, example: Bored Ape Yacht Club .
  • Token-gated – Anyone who holds a designated token can mint coins on the basis of FCFS, for example: Blitnauts  , which can only be minted by  Blitmap holders .
  • Sweepstakes-based – requires the use of a sweepstakes system to allocate a limited number of license lists for FCFS minting, example: Boki Final Sale )
  • Price-tiered – In a series, different supply tiers have different minting prices, e.g. NFT ID 0-999 is 0.1 ETH, 1000-1999 is 0.2 ETH, etc. Example: Hashmasks.

Bankless: Briefly describe 5 popular NFT placement methods and their advantages and disadvantages

Hashmasks casting layer, image via thehashmasks.com

advantage: 

  • Easy to implement for builders
  • The caster is easy and convenient to use

shortcoming: 

  • Low-priced, high-demand FCFS minting can lead to “gas wars” congesting the entire chain (e.g. Ethereum).
  • prone to transaction failure at the end of a minting event
  • Easily overwhelmed by droid casters
  • Timezone independent as FCFS minting is usually fast

02 Dutch Auctions (DAs)

A method of NFT placement where a series of NFTs starts with an initial mint price (eg 10 ETH) and that price periodically drops by a specific amount (eg 0.25 ETH every 30 minutes) until a specified price floor is reached or demand is balanced and all NFTs are all sold out.  

example: 

  • Art Blocks – To ease the gas war and focus on supporting artists rather than minters, from summer 2021, generative art app Art Blocks will allow artists to launch their collections through a Dutch auction .
  • Azuki – The anime-themed PFP series was minted in January 2022 via a Dutch auction, but the series was minted in minutes and its initial 1 ETH mint price never dropped.
  • Forgotten Runes Warrior’s Guild – Phase 1 launch of the Forgotten Runes Wizard’s Club expansion series began with a Dutch auction; the initial minting price was set at 2.5 ETH, but dropped to a final specified 0.6 ETH during the minting process.

advantage: 

Bringing transparency to the NFT bidding and price discovery process

shortcoming:

Usually in favor of the wealthiest collectors, who are able to mint at or near the original auction price.

03 Free Claim / Free Minting

A method of NFT placement where NFTs for collections can be minted for free, in addition to the gas costs associated with claim transactions. More recently, projects opting for this style have often relied on above-average secondary sales royalties for revenue.

example: 

  • CryptoPunks – It may seem hard to believe now, but when the most token series of NFTs ever released in 2017, all “Punks NFTs” were free to claim!

Bankless: Briefly describe 5 popular NFT placement methods and their advantages and disadvantages

Image via  Larva Labs

  • Loot – Dom Hofman released Loot, an on-chain adventure gear collection , for free in August 2021 . All NFTs in the series are claimed from smart contracts within a few hours .
  • goblintown – The wild goblin-themed NFT series that swept the NFT space earlier this year, released in a ” 1 free per wallet + gas mint  ” delivery style.

advantage: 

  • Low cost makes these NFTs available to many users. 
  • Incentivizes continued delivery of projects as continued progress will support better royalty income over time

shortcoming: 

  • The rise of low-fee/zero-fee NFT markets could erode future revenue prospects for free minting projects
  • Easily overwhelmed by droid casters

04 Nounish Auction

A method of NFT placement pioneered by Nouns DAO that requires the generation and auction of a new NFT every day indefinitely. Recently, however, we have seen a wave of projects adopt the Nounish distribution method while adjusting their NFT rhythm, i.e. releasing multiple NFTs per day, etc. 

Bankless: Briefly describe 5 popular NFT placement methods and their advantages and disadvantages

Image via  nouns.wtf

Variants: 

  • Nouns DAO – “One Noun, Everyday, Always” is the slogan of Nouns’ main project. The underlying protocol generates an avatar from the signature database, auctions the avatar, and settles the auction once a day.
  • Lil Nouns DAO – Auction of a  Lil Noun NFT every 15 minutes , forever.
  • WizardsDAO – Auctions 3 Wizard NFTs per day until the collection’s total supply reaches 2000 NFTs.

advantage: 

  • This placement/distribution method is a new on-chain original method that projects can use to gradually build an NFT community.
  • Rhythm and parameters can be customized in different ways.

shortcoming: 

  • This delivery method is ultimately experimental 
  • High demand could cause auctions to become unacceptable for many in terms of price
  • The Nouns protocol is elegantly designed and quite complex, so it requires professional Solidity developers to fork and build it.

05 Open editions

A method of NFT placement where there is no hard supply cap on NFTs released by creators or projects.

Variants: 

  • Infinite – Infinite OE means the collection has an infinite supply of possibilities and the minting never closes. A recent example is the project “The Room of Infinite Paintings” .
  • Timed – Timed OE is a delivery method that does not set a supply cap, but only provides open minting for a limited time window. A recent example is Zora’s “ State of Mind ” project, which ran for three days earlier this month and raised over 123 ETH during that time.

advantage: 

  • Flexible for creators and collectibles because everyone can get one.
  • Easy to get started with modern Web3 creator tools

Honorable Mention: Bonding curves and MultiRaffle

One method of NFT placement that seems to have fallen out of favor over the past year is the Bonding curves minting method.

Bankless: Briefly describe 5 popular NFT placement methods and their advantages and disadvantages

One of the pioneers of this format in the NFT space is the  EulerBeats  project, which sells (and allows for resale) its NFTs along a price curve determined by a specific mathematical formula. As the EulerBeats  documentation states :

“Any collector can buy a print (print) according to a price formula set on the bonding curve. As the number of prints in circulation for a particular original increases, the price for the next print to be released increases exponentially. […] The curve acts as a liquid market allowing print holders to burn their prints tokens, thereby reducing the current print token supply of the relevant original in exchange for the burn price received at the time. The burn process therefore returns ETH from the reserve to prints Token Burner.”

Finally, one way of delivering NFTs that doesn’t get much attention, but which I think should be used more, is  MultiRaffle  . It is a reference implementation of a lottery method created by Anish Agnihotri and Hasu of Paradigm. 

In short, MultiRaffle is the result of Agnihotri and Hasu’s research on the fairest and most efficient way to place NFTs. So, in MultiRaffle, the duo optimized for unexploitable fairness, preventing race conditions, and maximizing the cost-efficiency of casting from top to bottom.

I believe some MultiRaffle experiments have been implemented, although I personally haven’t seen any since Agnihotri and Hasu published their related research post back in October 2021 . This is a pity.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bankless-briefly-describe-5-popular-nft-placement-methods-and-their-advantages-and-disadvantages/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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