NFTs are unique, digital assets that are verifiable via the blockchain. NFTexplained.info is a team of crypto experts who are dedicated to educating people within the NFT space!
Let’s dive in!
An NFT “whitelist” is a spot saved for someone (typically someone who is loyal or very engaged with a project) to mint an NFT before the public sale. Oftentimes, the whitelist decides who gets to mint an NFT in a project with high demand. Whitelist spots are limited and essentially guarantee a mint.
A whitelist spot guarantees your digital wallet address (i.e. your public MetaMask wallet address – 0x9M…) eligibility to mint an NFT before the public is able to.
NFTs work using supply and demand economics and if a project has a lot of interest, the public mint will likely sell out in a very short period of time – so getting on the whitelist can be extremely profitable.
This whitelist minting period typically occurs at a specific time in order to avoid gas wars. Gas is what is required for transactions to occur as a miner must verify any transaction. Gas wars occur when a large number of people are attempting to mint – they are all attempting to transact at the same time, driving up the price.
Not all NFT projects have a whitelist. However the team at NFTexplained.info has noticed whitelisting becoming increasingly popular, especially among projects that are heavily hyped.
Getting on an NFT whitelist can be thought of as having the option to purchase something during the presale phase for full price.
The requirements to get on a potentially lucrative whitelist differ from project to project – so how can you get involved?
How Do You Get WhiteListed? – Getting Access To An NFT Presale
As a general statement there is no guaranteed way to get on an NFT whitelist and whitelist requirements often differ among projects. Whitelist spots are given out for a variety of different reasons; these reasons could include a reward for inviting 10 people to a Discord channel, winning an art contest and more.
There are different metrics that are used to determine who deserves a whitelist spot for a project. As NFTexplained.info mentioned these metrics could be inviting a specific number of people to join the Discord.
Increasingly, NFT projects are acting as launchpads in which holding an NFT could secure access to whitelist spots in a separate collection. This can be considered a form of utility.
While this is quite common, a hypothetical example is that 100 holders of Top Dog Beach Club are randomly chosen for presale or whitelist in minting Cool Cats. In this way, loyal fan of the Top Dog Beach Club are rewarded with the option – but not the obligation – to mint a Cool Cat.
While launchpads are becoming more commonplace, it’s not the most frequent way in which whitelist spots are granted.
Now, let’s dive in on the most common way in which whitelisting occurs.
The first step is finding an NFT project you like. NFTexplained.info would recommend completing your due diligence before investing in any NFT project and checking out our top ten tips for NFT investing.
After you find a compelling project, you’ve likely come into a Discord where you complete a number of steps, likely in the welcome channel, to prove you are human. Unfortunately, there’s still lots of bots.
In many NFT project Discord channels, one of the additional channels you can click on is “how-to-whitelist” where you can find information on how to get whitelisted.
This will provide you the steps to get whitelisted. In exchange for this potentially lucrative opportunity, many NFT creators want a considerable effort – some of which you may not like, such as promoting the project on your personal social media account.
After completing all these steps you can then type a command on Discord (like “show-whitelist”) where a bot will tell you if you’ve met all the criteria.
Finally, you will be asked to share your public wallet address which will be added to the whitelist. Never tell anyone your seed phrase and use caution as Discord scams do occur.
To end the article, NFTexplained.info will explain if it’s possible to lose money from minting an NFT.
Can You Lose Money Minting A Whitelisted NFT?
Minting an NFT does not guarantee you will earn a profit as many NFT projects fall to zero. Minting an NFT simply means you tokenize the NFT or ensure the digital work is verifiable via the blockchain. This means the NFT can be bought and sold – however there is no guarantee anyone will purchase it.
Scams do occur when the team behind a founding project do not follow through on their promises and this is known as a rug pull. NFTexplained.info has a full article on that type of scam and how to avoid them; that can be found here.
Whitelisting simply gives you the option to purchase the NFT for full price at an earlier time than public sale. Whitelisting does not ensure that you secure a profit.
That being said, whitelisted NFTs are likely to be more profitable when immediately flipped in comparison to those that are newly minted from public sale. This is likely just due to projects that have a whitelist being more hype driven.
For projects that are extremely desirable a whitelist spot could be very valuable as it is the only means of minting or getting your hands on the project (excluding buying in the secondary market).
For example, getting a whitelist spot on the NFT project by HAPEBEAST meant you could mint their NFT for 0.2 ETH – and the project currently has a floor price of roughly 5 ETH!
Is It A Scam If I’m Offered To Purchase An NFT Whitelist Spot?
As a general statement, if you’re offered to purchase a spot on a whitelist NFT project it’s a scam. Whitelists are given out as a way to reward those who are loyal to the projects’ community and generally not available for purchase. Approach these types of offers with great skepticism.
We hope you are just as excited as we are about NFTs and continue to stay informed at NFTexplained.info. To get the latest news in this rapidly evolving space, follow our team on Instagram & Twitter!