Are Free-to-Mint NFTs a Viable Option for Creators?
Free-to-mint NFTs are all the rage lately. In opposition to standard NFT drops where a collector must pay a set (or changing) price, plus a gas fee in order to create and purchase an NFT, free-to-mint collections offer a way for enthusiasts to mint an NFT at little to no cost.
Recently, both independent creators and product development teams have been opting for free-to-mint NFT launches in order to create buzz, bootstrap a community, and mitigate the usual NFT launch pitfalls. These aren’t to be confused with airdrops, though, as while airdrops incentivize and reward holders of an existing collection’s NFTs, free mints have become a popular way to launch brand new projects.
By now, most NFT enthusiasts are familiar with free-to-mint NFTs. From Loot to Goblintown to WAGDIE, free mints are becoming a common and desirable facet of the NFT ecosystem. But is this type of mint mechanic sustainable? And does it even work in the first place? Let’s explore.
Do free-to-mint NFTs work?
In short, yes. Free-to-mint NFT launches seem to be working just fine. And why shouldn’t they? After all, free-claim NFTs have long existed, with some even laying the groundwork for numerous influential projects launched over the past few years.
We can trace free-to-mint NFTs all the way back to the early days of NFTs. Even the launch of one of the most popular NFT projects ever, CrypoPunks, was centered around free-to-claim mechanics. Released in June 2017, Punks were initially given away for free to whoever wanted them. But because you needed an Ethereum wallet to collect one, supply was limited to those who were already interested/involved in the crypto space.
Yet, while the CryptoPunks claim still lives as a shining example of early NFT success, others have taken up the cause of the free-to-mint. Notably, Loot, the brainchild Dom Hofmann, was launched without warning on August 27, 2021, as a free-to-claim NFT on a first-come, first-serve basis. This project alone set off a chain of subsequent projects that proliferated the free-mint tactic.
Of course, things are vastly different now than they were when CryptoPunks were first released into the wild. Yes, free-to-mint NFTs work, and they work quite well for the most part as a way to roll out a new NFT project. But things get a bit more complicated when it comes to the secondary market for free mints, leading many to wonder if they’re sustainable in the long run.
Who benefits most from free mints?
Currently, it feels as though free-to-mint NFTs are only successful for large-scale projects. Generally, free-to-mint NFTs perpetuate the idea of exclusivity. By and large, free-mints are an event and one that almost automatically draws a great deal of hype. Who wouldn’t want a free NFT from a project with tens of thousands of Twitter followers? It’s an NFT flipper’s dream.
While public sales and dutch auctions force collectors to strategize and time their buys, free-to-mint NFTs cause a free-for-all, generating widespread FOMO (fear of missing out) and often leading to those ever-dreadful gas wars. And ultimately, paying something like 0.1 or even 0.4 ETH in gas to mint a single free-to-mint NFT isn’t actually free in the slightest.
These types of NFT drops are undoubtedly a great deal of fun for those who participate and profit — and they do muster excitement throughout the greater NFT community — but they aren’t a viable option for everyone. While teams behind popular large-scale free-to-mint NFT collections will profit in the end by taking a (sometimes surprisingly high) percentage off the top of every secondary market sale, independent artists likely wouldn’t rake in much at all from a free-to-mint drop.
Considering many artists — even those who have gained a sizeable following and have racked up significant 1/1 sales in the past — still struggle to sell their NFTs independently, minting their pieces out for free probably wouldn’t generate much revenue. Of course, this is dependent on the artists and supply vs demand, as we surely won’t see Beeple struggling to sell a small batch of edition pieces anytime soon.
Yet, perhaps this juxtaposition is less indicative of free-to-mint NFTs, and more-so exemplary of an unspoken learning of the NFT market: that just because something works for one person/group (i.e. free-mints, utility tokens, companion collections, airdrops, etc.) doesn’t mean it will work for everyone.
A long-term solution for NFTs?
While there is a case against free-to-mint NFTs, the majority of collectors/investors in the space feel that they are, in fact, a viable option for creators. As PFP projects continue to dominate the market, accruing millions of dollars in capital from their primary sales, the lack of accountability to those behind these projects has become a point of contention within the NFT community.
The fact that free-to-mint NFTs don’t work for everyone could be the reason they have a bet on longevity. In a sort of pay-to-play way, free-to-mint NFTs might force creators to make a show of what they can offer collectors, rather than implementing complex roadmaps that can only be completed once a collection sells out.
As free-to-mints don’t work for everyone, they (theoretically) shouldn’t work too well for the bad actors of the space. Why? Because free mints are counterintuitive to those who would hope to take the NFT community for a ride with a farcical money grab.
Of course, free-to-mint NFT scams definitely exist, but these most often utilize malicious smart contracts. As such, they are usually easy to sus out with a bit of digging. Regardless, implementing best practices like triple-checking smart contract sources, storing your valuable assets in cold wallets, and learning how to spot NFT red flags can help protect collectors from free mint scams just as well as any others.
But simply giving away thousands of NFTs for free is in no way guaranteed to turn a profit. Free-to-mint collections are designed to be a flash, then a slow burn; meaning the money really won’t be pouring in for the collector until the hype comes to a head. In the grand scheme of the market, this may be one of the major upsides of free-to-mint NFTs and provide more evidence of their sustainability.
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