Minting Privilege: What Is an NFT Whitelist?
NFTs (non-fungible tokens) exploded across cryptocurrency during the 2021 bull market. As the frenzy for digital collectibles increased, NFT creators sought ways to better organize their token releases. Instead of minting their NFTs on the public market, many NFT projects decided to "whitelist" select wallets for a smooth release day.
NFT whitelists allow NFT artists to create a more equitable and scam-free environment when minting their virtual tokens. Some say they create unfair dynamics by rewarding insiders. So what are NFT whitelists, and how do they impact NFT minting?
What is an NFT whitelist?
An NFT whitelist is a selected collection of crypto wallet addresses with special access to new NFTs. Typically, NFT projects award whitelist slots to the most veteran and active members of their online communities. Whitelisted users have the advantage of being able to mint NFTs into their associated crypto wallet before the general public. Minting an NFT means publishing a unique digital token on a smart contract blockchain; whoever mints an NFT becomes its first owner. Some NFT projects also use terms like "allowlists," "mint passes," or "pre-mints," all of which are generally synonymous with whitelists.
How do NFT whitelists work?
Every NFT project has a unique set of requirements when developing a whitelist. NFT project leaders usually share specific details regarding their whitelist rules, accepted wallets, and significant dates on their social media platforms. It's also common for NFT developers to use the promise of whitelist spots to incentivize community members to promote upcoming NFT launches. For example, people who join an NFT project's Discord group and share posts on Twitter and Telegram usually have a higher chance of getting on an NFT whitelist.
If you're selected for an NFT whitelist, the project founders will ask for a crypto wallet address that’s compatible with the NFT’s corresponding blockchain. For example, if an NFT project is on Ethereum (ETH), you'll need an Ethereum wallet such as MetaMask, while a Solana NFT whitelist will require a Solana (SOL) wallet such as Phantom. Once the NFT team has your wallet address and the official NFT mint date arrives, you’ll be able to connect your crypto wallet to the project's official website and mint the maximum allowed number of NFTs.
Projects sometimes distribute NFTs for free, but often, you'll need to pay a nominal fee in crypto to mint an NFT. You’ll also pay gas fees on the blockchain, after which the NFT will appear in your crypto wallet.
Learning how to create a whitelist for NFTs requires extensive knowledge of blockchain coding, which is why NFT developers need to be familiar with the technical specifics of whatever blockchain they use. They also need to know how to use smart contracts to provide an automated and trustless crypto transaction. (At the time of writing, NFTs are only available on smart contract blockchains like Ethereum, Solana, and Polygon).
Benefits of an NFT whitelist
From blocking scammers to generating social media hype, there are many reasons NFT whitelists have become influential in Web3––not only for NFT creators but also buyers.
Whitelist benefits for NFT creators
- Creates a more equitable launch: Only whitelisted wallets can mint a pre-set amount of NFTs. These restrictions make it less likely that affluent crypto investors (aka whales) will have an unfair advantage on the mint day.
- Helps avoid spammers: Whitelists help projects block suspicious wallet addresses that may be tied with scams. Developers can use tools like Captchas or request KYC (know-your-customer) to verify each wallet has a unique human owner.
- Rewards early supporters: Whitelists help NFT creators build a closer relationship with their most avid fans. Getting a whitelist spot makes many NFT collectors feel welcomed and appreciated, often improving an NFT project's public relations.
- Encourages free advertising: In addition to rewarding supporters, whitelists help NFT projects expand their reach on social media. Often, people interested in NFT whitelists need to share tweets or invite friends to follow a project's online profile. A whitelist spot’s incentive increases the odds of an NFT project gaining online attention.
Whitelist benefits for NFT buyers
- Avoids gas wars: Crypto gas wars are common during highly anticipated public NFT mints. In these wars, Web3 users keep increasing the crypto they're willing to pay for gas to guarantee they get an NFT. It gives whales an unfair advantage on the minting day. NFT whitelists eliminate the need to "bid up" gas prices when minting NFTs.
- Reduced competition and network congestion: Since everyone on an NFT whitelist has the right to mint at least one NFT, they don't have to worry about outcompeting or outbidding other buyers. An NFT whitelist also helps reduce congestion on a blockchain, which eliminates the risk of a sudden spike in average gas fees.
- A transparent mint price: People on an NFT whitelist can purchase these digital tokens at a flat fee or for free. While there's no guarantee these NFTs will rise in value on the secondary market, whitelisted wallets often have a price advantage over the general public.
- Extra perks: Some NFT creators offer bonuses to whitelisted wallets, like access to VIP social media forums, merchandise, or metaverse events.
How to get on an NFT whitelist
The first step to signing up for an NFT whitelist is to find an upcoming NFT project. You can track the NFT sector on crypto news sites like CoinDesk or price aggregators like CoinMarketCap to stay informed on big launches. Also, many NFT-focused sites like Rarity.Tools and NFTcalendar.io publish current NFT mint calendars.
While it's possible to find NFT release dates on social media, always triple-check this information. Platforms like Discord, Twitter, and Telegram are integral to the NFT space, but they’re prone to scams.
Once you've researched an NFT project with an upcoming mint date, you can ask the team how to apply for a whitelist. Some NFT teams list ways to improve your odds of getting on a whitelist. Even if they don't explicitly say what to do, you'll have a better chance of getting a spot if you're active on the NFT project's feeds.
NFT whitelist controversies
NFT whitelists help streamline the minting process, but they’re not without security concerns. Since the NFT market is new and largely unregulated, many sham projects use whitelists to rug pull buyers. In a rug pull scam, developers steal every user's crypto without delivering the promised NFTs. For example, the U.S. Department of Justice arrested the developers behind the Frosties NFT collection in 2022. According to the DOJ, the Frosties team deleted their social media accounts after collecting crypto from their whitelist members. Allegedly, the Frosties team also attempted to rug pull its Embers NFTs.
Unfortunately, many illegitimate NFT projects exist, which is why it’s important to carefully research any NFT collection you’re interested in joining. Many experts suggest focusing on NFT whitelists with transparent leaders, third-party audits, and official accreditations.
In addition to rug pulls, some analysts criticize NFT whitelists for favoring project insiders with discounted rates. NFT whitelists may give projects an excuse to artificially inflate prices, given the excessive online hype and the scarcity of these tokens. Since insider trading laws aren’t as well-defined in crypto as in stocks, there are concerns some NFT projects are using whitelists to make illegitimate gains.
Additionally, many “game the system” by forcing themselves onto a whitelist by engaging in behavior that looks like they benefit the project, when in reality, they have more selfish motives.
Are NFT whitelists the same as NFT airdrops?
NFT airdrops are similar to whitelists, but they aren't the same. In an NFT airdrop, the project will mint NFTs and "drop" them into your crypto wallet. Unlike whitelisted NFTs, you don't have to sign in to an NFT project's portal or pay transaction fees to claim NFT airdrops.
Both NFT whitelist spots and airdrops often go to people who are active on an NFT project's social media. So, although there's a distinction between airdrops and whitelists, the way you claim these crypto rewards is typically the same.
NFT whitelists help content creators and collectors connect. However, that doesn't mean every NFT whitelist is legit. If you're interested in joining NFT whitelists, it's essential to carefully review your NFT collection's reputation. Reputable NFT projects should publish third-party audits and have transparent information on their founders. Taking the time to review this info can save you from signing up for a Ponzi NFT whitelist.
At Worldcoin, we aim to boost safety across Web3 while preserving user anonymity. That's why we're working on our eye-scanning Orb to verify wallet addresses without collecting KYC data and reduce scams in the NFT sector. Besides this, we intend to put a share of our crypto in everyone’s hands for free. Subscribe to our YouTube channel for more details on our Orb device.