NFTs, also known as non-fungible tokens, are all the rage in the blockchain sector right now. These tokens are developed on smart contract blockchains like Ethereum and Solana. Every NFT is unique and irreplaceable, which is what makes it non-fungible. This is done through a unique identifier that’s placed on each token using a cryptographic algorithm.
These tokens are so popular that some sell for millions of dollars on NFT marketplaces. This is why people are looking for ways to earn free NFTs. The hope is that their NFTs will increase in value, allowing them to sell for massive gains.
Users don’t want to miss out on any opportunity to earn NFTs, which is why they participate in NFT drops. What is an NFT drop? That’s what we’re going to tell you. Keep reading to find out everything you need to know about how to get NFT drops.
What is an NFT Drop?
An NFT drop is a method of distributing tokens associated with a specific blockchain project. These tokens are made available to the public through an NFT drop, which is most often used through the GameFi market. For example, a game publisher might do an NFT to share tokens for the game before it launches.
Simply put, NFT drops are a method through which non-fungible tokens are distributed through a blockchain’s smart contract. This can be done on a variety of blockchain networks, including Solana, Ethereum, and Binance Chain.
How is this different than an ICO, IEO, or IDO? With an NFT drop, the intent isn’t to earn funds for a project. Instead, an NFT drop is a tool that developers use to bring attention to a project; this is done in conjunction with providing value to users that already exist within the platform’s ecosystem.
If you’re familiar with token airdrops, then you’re already somewhat familiar with NFT drops. Just as token airdrops give free tokens, so too do NFT drops. However, one key distinction is that NFT drops cannot be stored in contracts. This is because an NFT has a specific attribute that makes it non-transferable.
Think of NFTs as limited edition items. While there may be more than one version of the item, you’re the only one that has your specific item. However, most NFT drops ask participants to perform a notable task or sign up to participate before earning an NFT. This might be something like playing games, purchasing an item, or creating an account.
Related Article: Physical NFT Explained: From Blockchain to Your Hands
How do NFT Drops Work?
NFT drops use the standard for the blockchain on which they’re built. So, for example, if the project is using Ethereum, then NFT drops will use the ERC-721 standard. With this standard, developers can create one-of-a-kind tokens, referred to as ERC-721 tokens. Once they’re created, developers can determine how they’re used.
Some become games, trading cards, or collectibles, like the Bored Ape Yacht Club or CryptoPunks. Once they’re created or “minted,” these tokens can then be dropped to a group of users. This process of dropping NFTs works since every token has a special identifier that is tracked via the blockchain.
Because they can be tracked, every user can validate receiving an NFT from the person who sent it. This helps confirm and verify the transaction – and thus the NFT drop – is legitimate.
Benefits of an NFT Drop
There are plenty of benefits to participating in an NFT drop. Here are a few:
- NFT drops bring attention to new apps, games, and projects, which helps create tractions in a competitive and fun market.
- Allows developers to use NFT drops to build a user base from scratch. It also allows them to validate and test an idea before going to market with it.
- Creates community and opportunities for NFT projects new to the market. Provides a way for these projects to gain attention, which can lead to eventually being listed on an NFT exchange.
- Users who participate in an NFT drop don’t have to pay additional fees on their tokens. All fees are included as part of the token sale.
Drawbacks to NFT Drops
There are also a few drawbacks to NFT drops. Here are a few things to consider before participating:
- NFT drops typically require a purchase or completing an assignment or task before receiving your NFT. Do your due diligence before giving out your information.
- Some NFT drops are rug pulls. They’ll require your information or a deposit and then take off with your funds before you realize what’s going on. Don’t fall for scams.
- NFTs are very volatile. Since this is still a nascent market, there aren’t very many buyers and sellers, so your NFT may not be as liquid as you like. Additionally, the prices of NFTs will wildly fluctuate.
How Can I Take Part in an NFT Drop?
Here are the steps you can take to get NFT drops.
Step 1 – Find a legitimate and relevant NFT hub. Register for an account so you can take part in the next NFT drop.
Step 2 – Verify when the NFT drop will occur. Many NFT drops take place on a certain date or at a certain time. Check and verify the details of the drop before you register.
Step 3 – If you’re asked to do so, send funds to the hub so you can participate. Find the right address and make sure that’s where your funds are going. Registering for an NFT drop does not guarantee that you’ll receive an NFT, so only provide what you’re okay with losing.
Step 4 – Follow the instructions provided by the NFT drop. This should include the wallet address that will send the tokens. Typically, this part of the NFT drop takes place automatically, but there are some drops that will require some steps for you to follow. As always, be sure you read carefully through the instructions and validate your wallet address.
What to Avoid When Participating in an NFT Drop
Here are some things to watch for when you find an NFT drop you like.
- Before you buy into an NFT drop, validate that the project is legitimate. There are plenty of scams out there more than willing to part you from your money.
- Don’t participate in an NFT drop if the developer doesn’t have a reliable reputation. Shady developers are out there doing everything they can to make their projects look legit. Dig into the developer’s background before pulling the trigger.
- Don’t get involved in an NFT drop just because it’s hyped. Some “popular” NFT drops were simply overpriced tokens that dropped in value the second they hit the market. A project might seem cool at first, but it’s not cool to spend a lot of money on an NFT only to see it tank.
- NFTs are fun and exciting, but they also have a use. If you’re not going to use the NFT, it may not be worth participating in the NFT drop.
FAQs
Here are some commonly asked questions about NFT drops.
Are NFT drops free?
No, NFT drops typically require a purchase or completing an assignment or task before receiving your NFT. Do your due diligence before participating in a new NFT drop or giving out your information.
Is Buying NFTs worth it?
NFTs are very volatile. Since this is still a nascent market, there aren’t very many buyers and sellers, so your NFT may not be as liquid as you like. Additionally, the prices of NFTs will wildly fluctuate. Even if you know when NFTs are dropping, it may not be worth the initial investment.
Can NFTs make you rich?
Anything is possible, but it’s unlikely that buying even the best NFT drops will make you rich. NFTs are a new and emerging market, so there is a lot of speculation and hype driving the prices up. Be sure to do your research to find out about NFT drops, and don’t invest more than you’re willing to lose.
How do I know if an NFT is valuable?
The value of an NFT is subjective and depends on what the buyer is willing to pay. However, there are a few factors that can affect the price of an NFT.
The first is the platform where the NFT is hosted. Some platforms are more popular than others, so an NFT on a popular platform will likely be more expensive than an NFT on a less popular platform.
The second is the rarity of the NFT. Even if you know where to find NFT drops, there are only a few of a certain NFT in existence, it will likely be more expensive than an NFT that is more common.
Finally, the popularity of the project associated with the NFT can affect its price. If an NFT is associated with a popular project, it will likely be more expensive than an NFT associated with a less popular project.
What to do with NFT after buying?
Be Diligent
It might seem like everyone is talking about NFTs, but they’re still a new development. This nascent market has plenty of potential, which means you’re getting in on the ground floor. However, that doesn’t make it okay to invest all your money without doing your part. It’s important to ensure that a project is legitimate before you participate.
Additionally, remember that NFTs are volatile, just like cryptocurrencies. The value of an NFT could fluctuate significantly from one day to the next. Still, there are plenty of exciting projects out there, so find one that has value for you and take the necessary steps to get in on it.
