For the longest time, the goal when approaching an upcoming NFT project was always to secure a spot on the Whitelist. As you know, the space is ever changing and thanks to projects such as We Are All Going to Die, and most notably, Goblintown.wtf, we’re seeing an influx of free-to-mint projects. As we move into the second half of 2022, a new wave of free NFT projects is appearing. Much like premium collections, a few will rise to the top whilst the majority fail.
The free mint market is vastly different to the previous NFT economy. Previously, the initial mint cost was set by the team who could position its collection as they wanted. A higher price to attract the most committed amongst the community, or a more affordable figure that would increase the chance of selling out, the choice was theirs.
Whereas, with free mints, the standard and price is set by the market as buyers and sellers trade. In this circumstance, we will likely see huge fluctuations before the free market settles on a price. With this in mind, the free mint meta presents amazing opportunities to amass huge sums of profits, and with just gas fees to pay, we can be a little more daring in our approach.
There are, however, still risks involved, so to give ourselves the best chance of success, below are my tips on the best practices to follow during this free mint meta.
Create And ALWAYS Use a Burner Wallet
A new meta means a new wallet, especially when we can be more gung-ho due to reduced financial risk. Unfortunately, when we’re at our most relaxed or most confident, we become far more vulnerable to lose. Scammers live and breathe upon this philosophy and with us more likely to blindly FOMO into projects during this new meta without doing our due diligence, the likelihood of encountering malicious contracts intensifies.
These scumbags can and will take everything from your wallet if given the opportunity. How can you stay safe? Start by creating a burner wallet and then load it up with whatever your gas budget is for the day, it doesn’t take long. Lastly, once you have successfully minted a project, simply transfer it to your main wallet, and should you fall victim, you will lose very little.
Check The Smart Contract
Much like the above, this is all about mitigating risk. All NFT projects should have a publicly visible smart contract, before, during, and after the minting period. If for some reason you cannot view the contract, alarm bells should be ringing and you should avoid it like the plague. My advice here would be to familiarize yourself with smart contracts. Spend some time looking at those associated with well-established projects and do some research across the web. Google is your friend here. If a contract looks suspicious, then it most likely is and should also be avoided.
In truth, most NFT traders will fall victim to a scam at some point, but doing this alongside having a burner wallet, will greatly reduce the chances of this happening. Below is an example of a malicious contract.
Set A Gas Budget
Whilst it’s true that financial risk is reduced when it comes to free mints, there is still the cost of gas to consider. Gas fees fluctuate depending on how busy the network is, so if there are tons of degens trying to mint at the same time, you’ll be paying more in gas, and vice versa. There is still money to be lost if you just Ape into every project you see.
The best approach is to set a daily, weekly, or monthly gas budget based on what you can afford to lose. Remember that most projects will still flop, regardless of mint price, and if you pay a high fee, you could still lose money during the flip. Free mints are still an investment, and many investors lose money, especially if they are active traders as opposed to long-term holders. Be careful with the currency of your choice and stick to the budget. This will ultimately help you to make wiser choices and increase the chance for profit.
Do Your Own Research
If you consumed hours of content on YouTube when you were new to the space like me, you will have no doubt come across the countless NFT-focused creators that will have told you to go through the checklist. Artwork, team, roadmap, utility, community, etc. Just because the project is free, doesn’t mean you should slip into bad habits. Whether it’s a checklist or a system you’ve devised yourself, before minting a project you should continue with your usual research process.
Collections like Goblintown and Moonrunners, which tick none of the above, are exceptions to the rule with countless copycats failing miserably. DYOR has become a staple of the NFT space and we should not forget this core principle as we navigate through the free mint meta.
Take Profits Aggressively
Last but not least, take your profits! If you get a free mint and the price rockets, take your money immediately and run. Yes, it’s possible that it may go higher, however, you paid nothing (apart from gas), and therefore, you should be more than happy with whatever profits are available to you. Pump and dump is the trend we’re seeing, so when that project pumps, cash out before the dump.
Well, there you have it, my guide to surviving the free mint meta. The NFT has already gone through several meta shifts and it’s important to keep up with the current narrative. With the market at a low point, it makes sense to provide an entry point into the space where we don’t have to risk hundreds, if not thousands of dollars to get into a project. This should also see plenty of new people enter the space which is very much a welcome thing as we continue to take steps towards mass adoption. As always, please be careful with your finances, and good luck.