Should Your Next NFT Launch Use The Free-to-mint Model?
October 4, 2022
In the bear market, NFTs have taken a beating, with floor prices plummeting and trading volumes dwindling. Even though the NFT market as a whole is suffering, free-to-mint projects are actually doing quite well. Because of this, more and more NFT projects are choosing to use the free-to-mint model to launch their NFTs.
So, what's attracting so many NFT collections to opt for free-to-mint NFT launch? Let's find out.
- What are free-to-mint NFTs?
- Why free-to-mint NFT minting model is trending?
- Benefits of launching your NFT collection using free-to-mint strategy
- Other types of NFT minting models
- Should you implement free-to-mint model for your next NFT collections?
What are free-to-mint NFTs?
Free-to-mint NFTs are a type of NFT minting model in which NFT projects launch their NFTs for free, with the exception of the gas fee required to mint an NFT. In contrast to NFT airdrops, which are incentives or free NFTs offered to existing token holders or members of the community who meet certain criteria, free-to-mint NFTs do not incur any costs beyond the standard gas fees of the blockchain network.
The free-to-mint NFT minting model dates back to the early days of the NFT world and was first implemented by CryptoPunks, which is one of the largest and most popular NFT projects of all time. CryptoPunks debuted in 2017 and were free to mint for anyone with an Ethereum wallet.
An NFT is created when a digital asset is converted into a non-fungible token by a process called minting. In exchange, you may be required to pay a gas fee to the blockchain network you are using. This fee is based on the blockchain that you intended to use and the selected minting model. The majority of the top blockchains charge a gas fee for minting, purchasing, or selling an NFT - or all three.
The free-to-mint model allows NFTs to be minted without incurring any costs other than the gas fee. In other words, with free minting, you set up the smart contract for minting the NFTs in such a way that the NFT buyer pays the fees rather than the NFT creator.
There seems to be a growing interest in the free-to-mint NFT minting model.
Because of the ongoing bear market, NFT trading volume has decreased significantly. Collectors are simply not showing an interest in purchasing NFTs, and new users are also declining. Therefore, NFT collections and individual artists have been preferring free-to-mint NFT launches to reduce the likelihood of having their projects completely wiped off the market.
The release of the GoblinTown NFT collection arguably started the trend of releasing free-to-mint NFTs. The project sold out in just a few hours of its launch, which sparked the NFT space, leading to more NFT projects opting for a free-to-mint strategy to launch their non-fungible token.
Free-to-mint NFT drops are undeniably entertaining for both users and projects. The potential for profit from secondary sale royalties with each transfer of an NFT has led to an uptick in the number of projects opting for this strategy.
Benefits of launching your NFT collection using free-to-mint strategy
1. Lower entry barrier
Since the risk of losing one's initial investment is mitigated by free mints, NFT projects can more easily attract new users and level the playing field so that everyone, from seasoned NFT collectors to curious amateurs, can participate in the NFT ecosystem.
2. An effective approach to launching NFTs in a bear market
During the crypto bear market, NFT sales across marketplaces have dropped significantly, making free-to-mint NFT collections an appealing and viable option for NFT collectors. Furthermore, the rapid success of free-to-mint projects like GoblinTown and DigiDaigaku has made the free-to-mint strategy a win-win situation for both collectors and NFT collections.
3. Generate instant buzz and FOMO
While public sales and marketplace auctions require collectors to plan and time their purchases, free-to-mint NFTs create a free-for-all, resulting in widespread FOMO. Furthermore, doing a free mint enables you to create a community that supports your project and generates buzz for its launch.
Goblintown.wtf is a well-known NFT collection that uses a free-to-mint NFT minting model.
The Goblintown NFT collection is not a typical ape-themed NFT; it is a collection with unique concepts and designs. The NFT project is a collection of 10,000 Goblins on the Ethereum blockchain that are comically bizarre in appearance.
After hosting a strange Twitter space, the Goblintown NFT collection became the talk of the NFT town. Despite their anonymous team and no apparent roadmap or utility at the time of launch, the NFTs quickly climbed the sales charts, leaving many observers perplexed. At the time of writing, the project has a floor price of 1 ETH and a sales volume of more than 48.9k ETH.
Truth Labs, whose previous NFT collections include the Illuminati Collective and The 187, have now revealed themselves as the project's creators. The team announced that the Truth Marketplace will soon open its virtual doors to sellers and buyers alike, promising a flat 5% royalty rate across the board with no additional marketplace charges.
By opting for a higher share of secondary sales (7.5%), Goblintown may have started the free mint trend. When compared to OpenSea, the new marketplace will save traders 50% on creator and marketplace fees.
Read more: 7 Leading NFT Marketplaces
Other types of NFT minting models
Many different factors can lead to a successful, completely sold-out NFT mint. To ensure that their project gets off to a good start, NFT projects and creators should think about the most feasible minting strategy for their NFT project.
Besides free mints, you can use any of the following minting strategies when minting NFTs through an NFT marketplace like OpenSea or Magic Eden, or on your own customized NFT minting website.
1. Public mints
Public mints are pre-announced mints in which the launch date and other information are made public before the NFT collection is set to be released. This is done so that collectors and investors can review the smart contract to verify the team's and collection's legitimacy. It also lets you market your NFT collection well and make sure you have the right target audience and community before you launch your NFT.
2. Whitelist only mints
In this minting model, only selected users are able to mint an NFT. Only the wallet addresses pre-specified in the whitelist can be used for minting an NFT. To be whitelisted, users must generally meet certain prerequisites or complete specific tasks.
NFT collections often have both public mints and whitelist mints. This means that the NFT collection was first released at a lower price for whitelisted users and then opened to the general public as a public mint.
3. Stealth mints
The stealth minting model involves releasing the minting smart contract at the same time or shortly before the NFT mint collection goes live for the mint. Stealth mints are used to prevent bots from accessing the smart contract and mint link before the drop time, making manipulation to acquire more NFTs more difficult. It also encourages fairness and an equal chance for all community members interested in minting an NFT.
So, should you implement free-to-mint model for your next NFT collections?
Although some critics are against the concept of free-to-mint NFTs, many collectors and experts see them as a good option for artists and NFT collections. However, free-to-mint NFTs may not be suitable for everyone, as simply offering thousands of NFTs for no cost does not guarantee a profit. Projects have to play a long-term game and can make money over time through royalties and other revenue streams.
The free mint model is beneficial for creators or collections that are well thought out and designed to have long-term appeal so that collectors can be shown the future opportunities of the NFT collection instead of blindly investing in NFTs that could quickly fumble after the launch or that never achieve the objectives specified in complex roadmaps.
Overall, free-to-mint could be a long-term way to get more people to use the NFT industry.
Read these articles to learn how to execute the perfect launch strategy for your NFT projects