Like in any financial market, timing is a core factor determining profitability – the common goal of any lay investor. Knowing when and how to buy NFTs is even more critical since their non-fungibility makes selling off tricky. This brief article compares the two common ways users get in on new NFT projects – presales and public mints.
What are NFT Presales?
NFT presale is a sales strategy offered by project developers to allow investors to acquire units of their collection before launching. Token presales are often distributed to crypto influencers, celebrities, and other users through whitelists. Whitelists are early access lists of wallets pre-approved by developers for minting. Whitelisting an NFT project is a way to appreciate the early and genuine believers in an NFT project.
Pros and Cons of NFT Presales
Getting whitelisted is the nirvana feeling every NFT trader wants, as it has its upsides. First, users can buy NFTs at the lowest price possible and access some of the rarest ones with unique traits. Also, whitelists create a significant buzz around projects, driving demand and value up in the process. Hence, whitelisted users often get to sell their NFTs at a higher price when the project eventually launches or subsequently. Other community benefits available to presale token holders include discounted fees on future collections and exclusive access to decentralized autonomous organizations (DAO) for participation in governance, fund usage, etc. While the whitelist offers a cheaper way to get in on a project, the downside is that the project might not take off, as there are no guarantees in crypto. For instance, whitelisted users that minted Pixelmon NFTs for 3 ETH can only sell their assets at a floor price of 0.2 ETH at the time of writing.
Also, the desperation to get into whitelists often make unsuspecting users vulnerable to wallet hacks, phishing attacks, and rug pulls.
What are Public Mints?
Public mints work the same way with presales, only that buying starts at launch. After the presale ends, the developers will announce a time for the public sales of the tokens. Although it is still possible to mint items with uncommon traits, the likelihood largely depends on the quantity that is left and how well you fare in gas wars.
Pros and Cons of Public Mints
Buying an NFT from a public market will give you the privilege of seeing the demand and analytical records for the project. While this does not always prevent buying an illiquid project, it helps filter low-prospect projects based on demand.
On the flip side, NFT collections with high activity at launch are often deemed successful, increasing gas fees. To outbid other users and ensure their transaction goes through, collectors often increase gas fees, a term known as "gas war." You should note that even if your transaction fails, you'll still get to pay gas fees, and there are no refunds. Whitelisted individuals can avoid the enormous minting gas fees by participating in presales.
And, of course, the market can be sometimes unforgiving, with a minimal guarantee on sustained demand.
Are NFT Presales Better Than Public Mints?
There is no better or worse approach to buying an NFT; at the end of the day, your choice should primarily come from due diligence. You must do detailed research into any project you intend to put your money into, not just FOMO because of hype.
Fortunately, purchasing NFTs during public mints has been made seamless with us. You get credibility, quality, and huge numbers in one multichain NFT marketplace. Start your NFT journey on AirNFTs now!