The Ultimate Guide to Upcoming NFT Drops
NFTs are the latest trend in the cryptocurrency world. These digital assets have taken the gaming and the art industries by storm.
Whether you think these assets are a speculative craze or a new opportunity for artists and investors to create fortunes, these digital assets continue to make headlines selling for millions of dollars. The relatively new industry has had record-breaking asset sales since the beginning of 2021.
Examples of such sales are Beeple’s Crossroad ($6.6 million), CryptoPunk #7523 ($11.75 million), Everydays: the First 5000 Days ($69.3 million), and CryptoPunk #9998 ($532 million) – a recent sale where the owner of the NFT bought the asset from themselves.
You may ask, what’s NFT? How NFT do works? Who uses NFTs? Let us try to understand these questions before we explore how NFT drops work.
What are NFTs?
NFTs or non-fungible tokens are digital assets with unique attributes that are stored on blockchain network.
The tokens are used to represent variety of physical and non-physical items such as art, music, digital event tickets, signatures, in-game assets, and many more.
Since the tokens are non-fungible (one-of-a-kind) they are used as a proof-of-ownership of the attached item.
NFTs are immutable and secure. But, who uses NFTs? As you can guess, anybody who want to attach a proof of ownership to an item can use NFTs.
Artists, game developers, musicians, even organizers, and many more, can use these digital assets on their items.
What are NFT drops?
Apart from the multimillion sales that always steal the headlines, the growth of the NFT market is attributed to the increasing number of NFTs, most of which sales below $1000. Since NFTs are designed to increase in value, the best time to buy such assets would be at the time of release.
Many artists, investors, and businesses are creating their NFTs projects and dropping them to the public to buy them. NFT drops are daily occurrences in the NFT market, so it is important to understand what it is, how it works, and how you can benefit from it.
You can think of NFT drops as similar to album drop in the music industry, which is a common language for the date when an artist releases a new creation to the public for purchase. Drops also include details about the time and price of the art, which is about to hit the market.
NFT drop refers to the release of a new non-fungible toke project. Specifically, it refers to the date, time, and the general minting price of such NFTs. Many NFT drops have purchase limits, which dictates the number of NFTs you can mint in a transaction. NFT drops have two major benefits to the buyers. First, you can save money by purchasing at drop time. Second, get the chance to be the first person to win the rarest NFTs of that project when you buy at drop time.
How do NFT drops work?
Artists and businesses usually dream of a perfect launch of their art projects. The model of NFT drop offers them this opportunity to plan for the launch and customize them to benefit them as well as the buyers. The project owners use a smart contract with all the details and launching mechanisms such as date, time, price, the maximum number of buyers, and the maximum number of NFTs a single participant can purchase.
The NFT creators aim to launch their projects at the best time and place, and with the price. The goal is to have the highest number of sales while setting the best high value for these NFTs.
You should understand these dynamics of NFT drop and take advantage of them as a buyer.
1. Date and Time of Release
The project creators will set a specific date and time for their NFT drops. These details are communicated earlier to enable users to prepare for them. Since these NFT props are automated – run by smart contracts, the period of such even is strict.
You should mark the dates and times for the project launch you want to participate in to avoid missing out. Some NFT drops will take a few days while others will take less than one minute.
2. Place of Launch
You need to be aware of the place of launch. Some artists will launch their NFTs on their websites while others use NFT marketplaces such as OpenSea and NiftyKit. Usually, big NFT drops attract many people, which may cause the minting website to crash or fail to load.
Minting on established marketplaces may help in solving this problem since they are designed to withstand high traffic.
3. Types of NFT drop
NFT creators use different mechanisms to control pricing and demand. One such model is the limited NFT Series, which constrains both demand and supply. The NFT creator controls the demand by setting the number of people who can buy the NFTs, say, X buyers. The art seller also specifies the price for the edition, stating that only a given number of people with a specific amount of funds can be a buyer. Collectors are allowed to mint on a first-come-first-serve basis until the entire supply is finished. For example, if there are 10,000 NFTs in supply for a specific collection, buyers can mint during the drop until all the NFTs have been purchased.
Many NFT suppliers will restrict the number of NFTs that a single buyer can mint in a single transaction or to a single wallet during the drop to increase the number number of participants. This model helps the artists to configure the expected project return. The approach is also good for collectors and investors since it creates scarcity. Users can enjoy the increase in the value of such NFTs, as scarcity drives demand. They can also flex these arts due to their rarity. Most metaverse NFTs are launched using this model. An example is AVAX Rocks, which had a maximum supply of 101 arts and 8.49 AVAX floor price. This is the most common model that you will meet in most NFTs. Sometimes this approach is referred to as standard drops.
Another commonly used model is the auction/silent auction, which aims to maximize the gross proceeds per art released. The major difference between the auction model and limited series is in the number of art. In limited series, the number of arts is controlled but is more than one while in an auction the number is reduced to one art. Only one buyer can purchase the art. There are two types of NFT auctions: English auctions and Dutch auctions. English auction is commonly used in super rare 1/1 of NFTs.
Similar to the eBay auction; collectors will bid on an NFT within a set period. When the auction period is over, the NFT is sold to the highest bidder. In the Dutch auction format, the purchase price starts high, for example, 4 ETH, and continually decreases until the NFTs sell out. Ideally, this auction drops approach is designed to enable collectors to decide on a fair buy-in point. Therefore, while 4 ETH may be too high a valuation of the item, collectors may wait until the price drops to 2 ETH, which they may consider as an appropriate price for the NFT.
Collectors participating in auction drops may end up having a highly rare work, which could drive the value of the NFT even further moving into the future. An example of an English auction model is the drop of Beeple’s Everydays: the First 5000 Days art by the UK auction house Christie’s. You should remember that the auction model could drive the price of the art to an unreasonable high hence overpricing.
Additionally, the reach of such a piece of work is minimized hence their impact. You can try your luck in such auctions as you may end up with extremely rare art. However, you have to be careful of the risks mentioned above.
Another type of NFTs drop is the open edition release, which eliminates the supply constraint. The approach allows the endless creation of a new edition of arts. However, the release can be restricted within a specific period while the supply remains unrestricted. This model controls the demand for the art through price by enabling more people to own the work. Such NFTs assets have improved the reach and the impact of the art.
The fourth type of approach of NFTs drops is the lottery system. The model uses a randomized selection algorithm to select the buyers. The method also uses the registration method for consideration in the release of the work. The supply is controlled through a limited series approach or a single-unit approach. The number of buyers is controlled by setting the minimum price and randomly selecting the buyers who meet the minimum price. from those who have met the required price. This method may help you land some of the rarest and most valuable arts that you could not get with highly competitive approaches such as auction model and open edition release. However, this approach may derive the prices of art above their initial prices.
Are NFT drops free?
NFTs are usually sold at launch to cater to the cost of creating them and to reward creators for their work. Just like any other item in the market, NFTs drive value that begins at its launch. However, free NFT drops (airdrops) are also available, and you can get them. These NFTs are usually used for promotional purposes.
NFT markets may give NFT airdrops to attract users to the platform. For example, Rarible, a creator-centric market for minting and selling NFTs, conducts weekly NFT airdrops of 75,000 tokens for platform users.
Blockchain Networks and crypto trading platforms may also offer NFT airdrops to attract users. For example, PancakeSwap, a crypto trading platform running on Binance blockchain, recently had an NFT airdrop where the first 8,888 people who created an account with the platform received limited-edition 3D animated NFTs. Binance Smart Chain is also airdropping 1500 NFTs out of 10,000 supplies. CryptoPunks collection is another interesting example. When this Ethereum-based project was launching, users could get the NFTs free as long as they could pay the gas fee on the Network. However, as the demand kept increasing, the prices skyrocketed and now the cheapest CryptoPunk costs about $100,000.
Gambling and gaming platforms also offer free NFTs to attract participants. For example, Zed Run, a blockchain-based horse racing game that uses NFTs to represent a horse, also gives NFT airdrops for its users.
Artists may also offer their first-generation NFTs as a way to promote themselves. Such projects may grow in value as the artist becomes more popular.
Not every NFTs that you may claim in an airdrop is guaranteed to increase in value. However, since they are free, you can gamble with them.
How to buy NFT drops?
Now that you know how to find NFT drops, it is now time to buy one. Here is a step-by-step process of buying NFTs.
1. Create an account
You need an account with the marketplace or the project that you want to buy their NFTs. You can visit the marketplace and click sign up, and follow the laid-out procedure to complete the process. Ensure you create the account earlier, as the system may experience congestion and the minting time approaches. Show up on the website five to ten minutes and see if your logins are working, and that you are ready to go.
2. Add payment method
You should also add the payment method that will allow you to make payments during the NFT purchase. If you are paying with a credit card, you can save it in advance. Trying to connect your payment method when the NFTs are just about to go live may not be successful due to the website congestion.
Ensure you have entered your address, zip code, full name, and CVC code correctly when saving your payment profile. If you are paying with ETH or any other cryptocurrency, you have to connect your wallet with the market and deposit pre-paid digital currencies to make purchases.
3. Be ready for the purchase
After you have connected your payment method, you are ready to make the purchase. Ensure you have set a reminder just before the NFTs go live to avoid missing out due to lateness. Some NFT drops take quite a short time (30 seconds in some cases). Log in some few minutes to time.
4. Buy the NFT drop
Once the NFT drop goes live, browse the art and select the one you want to purchase. Make an offer, in case of an auction, or buy the asset. Enter the bid amount and approve the transaction. Your funds will be locked until the bid is approved in case of an auction trade. However, the trade will be settled as soon as you click on “Proceed to Purchase” if the price is fixed as in the standard drop or lottery
You should remember that the site might be slower during drops due to congestion. Ensure you are using a good browser and that your internet connection is fast and stable.
Browsing around and buying new NFT drops could be very exciting. You may be easily tempted to buy any new drop that comes around. You may be motivated with the fear of missing out and mint your entire paycheck away, without clearly thinking about your moves. However, there is a way to go about buying NFT drops that will leave you a happy person afterward.
Here are some of the tips to follow to acquire an NFT of on a drop day:
Buy NFT that you enjoy
Buying an NFT is more than just buying metadata. When you are looking for the next drop, ensure they are best NFT drops, which you enjoy. Take an example of buying your favorite cloth; you will always go for the best one that meets your taste, fashion, and preference. You can pose this question to yourself, “why do I like NFT?” if you can answer this question honestly before you buy an NFT, you are likely to win. Even if you are buying with the plan of re-selling it later, still you must ensure you can hold it happily for long. Ask yourself the following questions:
- Is the NFT visually pleasing?
- Can I afford to purchase this NFT?
- Do I support the brand and its mission?
- Will I be upset if I do not make a profit from this NFT?
These questions will question your honesty, and help determine if you want the newest NFT drop.
Research well before you buy an NFT drop
You should avoid buying NFTs drops before you do your research. Conduct in-depth research on NFT drops to increase your chance of buying an enjoyable asset. Buying an NFT is like buying a brand, just like buying pair of designer shoes. First, research the brand or the artist. If it is a well-known brand with a reputation, then you are highly likely to get a quality NFT drop. Second, consider the NFT that you want to purchase. Some NFTs, though are dropped by well-known artists or brands, may not meet your preference.
Ensure the NFT meets what you are looking for in terms of functionality, style, and value.
Additionally, you should investigate the creator and the entire team behind the drop to ensure legitimacy. If the creators are reputable and trustworthy people, then you can confidently buy the NFT drop. However, you need to be cautious if you cannot find the information about the NFT creator since it is likely to be a fraud.
Avoid becoming a victim of a Fraud
Frauds may come in different ways that you can easily fall victim to, especially if you have not been careful. One such scam is Rug Pull, a scenario where someone creates a project intending to make money quickly before abandoning it. You can easily detect Rug pulls by easily spending time in the project’s community spaces such as social media, Discord, and other communication channels. You will know how active the brand is. A brand, which is not active, and sincere with its efforts may raise suspicion and call for more research before jumping into it.
Other frauds that can be detrimental to your assets are fake sites. Such sites are usually counterfeits. They are designed to look like the original popular and reputable sites to trick users. Such assets can steal all your funds once you connect your wallet or credit cards. Ensure you double-check the URL, and avoid visiting any suspicious website.
Another form of fraud that scammers use is fake brands. Fraudsters will create fake brands with counterfeit NFTs. You can find such fake brands listed on marketplaces of social media sites. Always ensure you purchase NFT drops from the correct brand name.
Scammers may also use direct messages to lure you to their frauds. They can send you messages through emails, social media chat groups. You should avoid messages telling you that you have won prizes of any kind. Always be cautious when someone messages you with any sort of offer. Do not share your wallet or credit card details
Buy drops that are within your budget
It can be tempting to buy any new NFT drop, especially after doing in-depth research and realizing that the NFT is worth purchasing. However, you should not invest more money than your budget allows. There is no guarantee of any NFT drop succeeding.
Therefore, it is important to tolerate the mindset that you as well lose your funds.
Avoid purchasing drops simply because they are affordable
Just because you can afford an NFT does not mean you should buy it. An NFT can become more common with time. As long as its demand cannot keep up, the value of such assets will keep going down. However, if you enjoy a project simply because it is appealing to you, then you can buy it as long as you can afford it.
The Bottom Line
NFT drops present a great opportunity for investors to make fortune. By buying NFTs early, you stand a chance of making huge returns. However, you must know where to see upcoming NFT drops that are likely to be successful. Subscribe here to get regular updates on the upcoming biggest NFT drops.