Crypto-related scams are a common problem in the world of NFTs. To protect yourself from both new and existing NFT scams, it’s crucial to stay informed. In addition to the risk of fraud, there’s fierce competition for newly created NFTs, which can drive up prices and transaction fees, making them expensive for early supporters.
However, NFT platforms have solved these problems by introducing NFT whitelists or allowlists. These lists grant special privileges and access to newly created NFTs. Before NFTs are made available to the public, projects use allowlists to control who can mint NFTs. For example, being on the whitelist allows you to mint NFTs without worrying about engaging in costly gas wars.
What is an NFT whitelist?
Whitelisting is a cyber-security term that essentially means approving a specific list of IP addresses, email addresses, or applications while rejecting all others. In the context of NFTs, it involves granting special privileges and access to a particular item.
In the world of NFTs, a non-fungible token allowlist is a roster of wallet addresses with exclusive rights to mint NFTs. This ensures the ability to create one or more NFTs before they are made available to the general public, often at a reduced cost.
A pre-mint, which is commonly facilitated through a mint pass or an allowlist, provides an opportunity for community members and early supporters to mint NFTs before the public sale begins. However, it’s important to note that the main distinction between a mint pass and an allowlist is that a mint pass typically involves a fee to mint a specific quantity of NFTs ahead of the general sale.
How NFT Whitelists Function
NFT whitelists operate uniquely for each NFT project. Typically, NFT project leaders communicate the specific rules for their whitelist, approved wallets, and important dates through their social media channels.
It’s common for NFT developers to use whitelist spots as an incentive for community members to promote upcoming NFT launches. For instance, those who participate in an NFT project’s Discord group, share posts on X (formerly Twitter), and engage on Telegram often have a better chance of making it onto the NFT whitelist.
If you are chosen for an NFT whitelist, the project creators will request your crypto wallet address that is compatible with the blockchain associated with the NFT. For example, if an NFT project is on Ethereum, you’ll need an Ethereum wallet like MetaMask, while a Solana NFT whitelist will require a Solana wallet like Phantom.
When the official NFT minting date arrives, you can connect your crypto wallet to the project’s official website and mint the maximum number of NFTs allowed.
Sometimes, NFTs are given away for free, but more often than not, you’ll need to pay a small fee in cryptocurrency to mint an NFT. Additionally, you’ll incur blockchain gas fees, and once the process is complete, the NFT will appear in your crypto wallet.
Creating a whitelist for NFTs involves in-depth knowledge of blockchain coding, which is why NFT developers must be well-versed in the technical aspects of the blockchain they use. They also need to understand how to implement smart contracts to facilitate automated and trustless cryptocurrency transactions.
Why NFT Whitelists Were Introduced
NFT whitelists serve several crucial purposes, primarily aimed at fostering community growth, rewarding early supporters, curbing spam, and mitigating gas wars.
Fostering Community and Rewarding Supporters
NFT projects rely on building a vibrant community of enthusiasts who engage in activities like following and interacting on social media, participating in Discord servers, and volunteering for promotional work. It’s often challenging to financially compensate dedicated community members, especially when a project is in its early stages.
However, adding someone to the project’s whitelist is a straightforward way to reward and keep them engaged. The prospect of being whitelisted encourages individuals to promote an NFT project, and those already on the whitelist are further motivated to do so, as they are likely investors themselves who want the project to succeed.
Ideally, this collaborative effort results in a highly successful public sale, typically following the whitelist minting phase.
Preventing Spam
Spam and bot activities have become significant issues within the crypto and NFT space, particularly during NFT presales. Many NFT projects receive a flood of whitelist requests from fake wallets, and some individuals attempt to create hundreds or even thousands of accounts simultaneously to secure a large share of the presale.
Whether executed manually or by bots, these actions can severely disrupt a successful NFT launch. Implementing an effective whitelisting process is a powerful countermeasure. By restricting whitelist access to genuine participants and contributors within the NFT project’s community, whitelisting discourages mass sign-ups.
This approach ensures that a project’s NFTs are distributed among a diverse group of genuinely engaged owners rather than ending up concentrated in the hands of a few opportunistic individuals.
Preventing Gas Wars
Currently, the Ethereum blockchain remains the dominant platform for NFT minting. Unfortunately, during periods of high congestion, Ethereum transaction fees (known as gas fees) can skyrocket, leading to what some call a “gas war.”
For example, during the Bored Ape Yacht Club (BAYC) Otherside metaverse land mint, minting costs exceeded $7,000 per NFT, with one individual famously spending $44,000 to mint two NFTs. Overall, the minting process consumed over $150 million in gas fees.
While NFT whitelists cannot eliminate gas-related issues, they significantly alleviate the problem. By limiting the number of initial buyers and providing them with a specific minting window, whitelists prevent a massive crowd from competing simultaneously, which would otherwise result in escalating gas prices.
How to Get on an NFT Whitelist
Getting onto an NFT whitelist involves engaging with a project through its Discord server, X (formerly Twitter), Telegram group, and more to capture the attention of the project’s creators. Here are the essential steps to secure a spot on an NFT whitelist:
Find an NFT Project Pre-launch
Most NFT projects, especially in their early stages, actively seek community members who can help build awareness and offer rewards in return. You can discover these projects by following X (formerly Twitter) and YouTube or by using platforms like Rarity—Tools to stay updated on emerging trends.
Join the NFT Project’s Discord Server
Once you’ve identified a project that interests you, join its Discord server. This allows you to connect with other project members and contribute to its growth. You can also find valuable information about the project, such as details about the founders, the project’s roadmap, and the latest updates, which can help you assess the project’s credibility before pursuing whitelist access.
Follow Whitelisting Instructions
The process for joining a whitelist can vary from one project to another. Follow the specific instructions provided by your chosen project to apply for whitelist inclusion. After meeting the requirements, you’ll be asked to provide your cryptocurrency wallet address. If accepted, this will grant you access to the whitelist. Once you’re on the whitelist, you’ll receive a designated time slot to mint your NFT token.
The Advantages of Being on an NFT Whitelist
Being part of an NFT whitelist offers several notable benefits, including:
Discounted Prices
During the whitelist period of a successful NFT project, you can often access NFTs at their lowest prices. Some projects even distribute free NFTs or offer discounted rates exclusively to whitelist members. These perks may be extended to all members, early whitelist participants, or distributed through raffles or contests.
Acquiring Rare NFTs
Most large NFT projects feature NFTs with varying levels of rarity, and these rare tokens are the ones that tend to skyrocket in value if the project succeeds. The rarest NFTs within a collection can be worth 10-20 times more than an average NFT from the same set.
However, locating and purchasing these ultra-rare NFTs after a project’s launch can be challenging and costly. During the whitelist minting period, with fewer people attempting to mint NFTs, it becomes more manageable to secure one of these valuable gems.
Guaranteed Minting Access
Getting whitelisted ensures you have a guaranteed opportunity to mint NFTs within a specified timeframe. Those who must mint during the public sale often face high gas fees or network congestion issues that can prevent them from participating. Additionally, failed minting attempts can lead to wasted gas expenses, where someone spends a significant amount only to leave empty-handed.
Community Engagement
Engaging with an NFT project’s community to earn whitelist access provides valuable insights into the project and the broader NFT market. Once whitelisted, you can assess whether the project is a worthwhile investment, potentially saving you time and money.
Conversely, you might discover that the project holds more promise than initially thought, prompting you to consider a more substantial investment in its NFTs. This exploration also helps you identify the rarest NFTs within the collection, which, as mentioned earlier, have the greatest potential for rapid price appreciation.
Airdrops and Rewards
NFT whitelist members sometimes receive free NFTs simply for being on the whitelist or actively participating in the whitelist minting process. Remarkably, some of these free “airdropped” NFTs have evolved into highly valuable collections in their own right.
For instance, Bored Ape Yacht Club (BAYC) owners received free Mutant Ape NFTs, Cool Cat owners received Cool Pets NFTs, and PROOF Collection owners received Moonbirds. These unexpected rewards can significantly enhance your NFT portfolio.
How to Recognize an NFT Whitelist Scam
The NFT industry is relatively new; unfortunately, scammers are eager to exploit unsuspecting individuals. Being aware of certain warning signs is crucial to protect yourself. While the process of getting on an NFT whitelist involves some straightforward steps, there are red flags to watch out for:
Bribery Requests: If a project representative or an unknown user demands a payment or bribe in exchange for securing your spot on the whitelist, it’s a clear indication of a scam. Legitimate NFT creators do not engage in such practices or control their community in this way.
Private Key or Bank Details: If you are ever asked to share your private key or sensitive banking information as part of the whitelist application process, consider it a major red flag. Legitimate projects do not require access to your private keys or personal financial data.
Unverified Contact: Be cautious if you receive unsolicited emails, texts, or phone calls claiming you’ve been selected for a whitelist. Always conduct thorough research on the project before committing any funds. Trust only official links and announcements posted on the project’s official social media channels.
Conclusion
NFT whitelists represent opportunities and risks within the rapidly evolving world of nonfungible tokens. While they offer advantages such as discounted prices, access to rare NFTs, guaranteed minting opportunities, community engagement, and the potential for airdrops and rewards, they also come with the potential for scams and fraudulent schemes.
To make the most of NFT whitelists and avoid falling victim to scams, it’s crucial to stay informed, engage with communities responsibly, and exercise caution when sharing sensitive information.
By following legitimate projects through official channels and being mindful of warning signs, individuals can navigate the NFT whitelist landscape more safely and make informed decisions in this exciting and dynamic digital asset space.
