What Is an NFT Drop: All You Need to Know

What Is an NFT and an NFT Collection?

NFT and crypto enthusiasts firmly believe that NFT technology is evolving and that the real tipping point will come with the adoption of NFTs across different platforms, such as contemporary digital art security, the gaming sector, or the Metaverse (all the virtual worlds). Recently, NFTs have gained wide popularity in Play-to-Earn games, in which in-game characters with a unique set of features or collectibles become NFTs.

What Are NFTs?

NFTs, or non-fungible tokens, are non-interchangeable, unique tokens. If we consider the technology in more detail, an NFT is a digital certificate that confirms a right to own a particular digital asset. Usually, an NFT is a one-of-a-kind digital artwork, video, GIF image, or piece of music. Most NFTs are based on the Ethereum blockchain.

What Is an NFT Collection?

NFT collections are collections of digital objects created according to a single principle. These are NFTs made by the same author or belonging to the same project, each decorated in the same style. In a collection, NFTs are usually made from the same basic image or template but enhanced with a unique set of attributes. On the page of the CoinMarketCap website, you can find information about the NFT Collection, sorted by sales volume.

What Is an NFT Drop?

Just as a popular music artist releases a new album or a well-known film studio releases a new movie in cinemas, NFT artists release their new collections for purchase — this is known as NFT drop. Many NFT drops provide an excellent opportunity to earn profit for those who collect NFTs. So, what is an NFT drop?

NFT Drop Rules

Keeping in mind that the NFT drop is the release of a new non-fungible token sale, we can assume there are rules that must be followed.

Why Are NFT Drops Held?

First of all, an NFT drop works as a powerful marketing tool for companies, used to attract more new users and promote the NFT project. Often these drops are scheduled events characterized by a sharp influx of drop participants online.

The Dutch Auctions

If you are an investor, researching an NFT project is vital. To successfully purchase an NFT, you need to find out some of the latest news about the NFT market, the NFT creator or the entire team behind the project, and upcoming drops. In most cases, you need to be quick to become one of the pioneers at a drop — except for the Dutch auctions.

Whitelists in NFT

Often NFT drops offer whitelists. Each NFT project has its own set of requirements that must be met to purchase its tokens. If a person meets all of them, the project authors or managers may pre-approve your crypto wallet address for NFT minting. Whitelists (WL) are lists of eligible individuals from a particular community that is given the opportunity to get in a drop early.

Where to Buy NFT Drops?

The most common questions people ask are where to find them and how to determine whether or not an NFT project is legitimate before it is actually dropped.

Where to See Upcoming NFT Drops?

Often the hardest part about purchasing NFTs is hearing about or finding new NFTs and upcoming drops.

How to Prepare for an NFT Drop?

In addition to telling you a little about the terminology surrounding NFTs, we would like to tell you what is necessary to participate in NFT drops so that you can minimize time and money losses.

Conducting a Website Review

To study a new NFT project thoroughly, you should visit the website the NFT authors created as a PR campaign for the project. Such websites share important information about the project as a whole, a roadmap that explains all the stages of the project, and information on the development team.

Some Necessary Precautions

On marketplaces like OpenSea, anybody can sell their own NFTs, so there’s a lot of clutter. Many people are trying to get into this trend without any real backing, hoping to make some quick money. In addition, during the last couple of years, due to the rise in popularity of NFTs, fraud, scam, and other types of offenses have appeared in these spaces.

Things to Avoid When Buying NFT Drops

The Hype

Unfortunately, NFTs are often compared with the dot-com bubble. Many collections are artificially popularized today. Much ado about nothing allows creators to earn, but buyers end up spending a lot more money than the collection should cost. As with popular fashion items, hyped-up NFTs are overpriced. You need to filter out the hype.

Unknowns

For beginners who are trying to enter the world of NFT drops and buyback unknown collections and similar works of poor quality, the problem lies in low earnings. In addition, on NFT websites, many authors work for quantity over quality, exhibiting collections consisting of more than 2,000 images with minimal discrepancies. Avoid buying NFT drops before you’ve done your own research.

Scams

The first point is that all transactions for NFTs, even for extremely large amounts, are tax-free. This is why fraudsters often use the system as a means to transfer money from wallet to wallet without commission or deductions.

Rug Pulls

Aside from scams, you also need to be aware of rug pulls. In short, a rug pull occurs when an NFT artist creates a project, takes investors’ money, and then completely abandons the project. People are given hope that this is a good project, and then the project team destroys the trust of the community during the drop.

Buying Because a Drop Is Affordable

Avoid buying a random unpopular collection just because you can afford it. The availability of funds for such a purchase does not oblige you to spend that money.

Expensive Drops

Avoid drops that do not fall within your budget. Don’t take risks, and take your time considering your purchases. The decision to invest more money in a larger and more famous collection than you can afford is not a smart decision.

What Is the Most Popular NFT Drop?

Takeaway

The question of whether or not NFTs are a good investment is debatable. Some NFT tokens can soar in price, so there is a chance that a new collection will be an excellent investment, as with BAYC.

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ICODA Agency

ICODA Agency

Fundraising & Community for Crypto Projects