Throughout 2021, digital assets Non-Fungible Tokens (NFT) are in focus. This year was the first time that “NFT” surpassed cryptocurrency as the most-searched term on Google Trends internationally. Moreover, while the market for crypto assets has witnessed a fall in transaction volume over the past several weeks, sales of NFTs have skyrocketed.
What is NFT Drop?
NFT drop describes the manner through which NFT projects are made available for acquisition by investors. This word often refers to the date, time, and minting price of an NFT project’s release.
In contrast to the typical token sale method, where the objective is to raise revenue for the project, the purpose of this mechanism is not to raise funds. NFT drop is frequently employed as a method for acquiring new users and distributing value to existing ones.
Through this method, an investor can acquire an original work of art or digital product for a significantly reduced cost. Unfortunately, the vast majority of NFT drops come with a limited amount of collections. It is hardly unexpected that many NFT dumps from notable authors are eagerly awaited and frequently debated by hundreds or thousands of individuals.
Alternatively, a few of NFT developers have requested users to do an action before receiving a free NFT. This free NFT drop is distributed like an airdrop. For instance, players may be required to create a new account on a website, play a game on the platform, or make a purchase from an online retailer.
For instance, CryptoKitties, one of the most popular decentralized applications (dApps), provides a free NFT drop to each user who spends at least 0.015 ETH from a gaming platform.
How NFT Drop Works
The ERC721 standard on the Ethereum blockchain enables NFT drop. In addition, this standard permits the creation of ERC721 coins by developers.
The ERC721 currency may be utilized in various ways, including the creation of collections, games, and digital trading cards similar to those used in Rare Pepe Cards and CryptoPunks.
This ERC721 coin may be distributed as a gift to a group of individuals, whether they are friends or crypto enthusiasts. This strategy is effective due to the fact that each token has a unique ID that can be traced using blockchain technology.
This enables users to confirm that they received a gift from the intended recipient and not from someone else with the same token ID.
Advantages of NFT Drop
The primary advantage of the NFT drop is that it encourages users to experiment with different dApps and is an effort to improve long-term user loyalty. This strategy can help an NFT initiative find momentum in a market that is becoming increasingly competitive. In addition, all costs associated with the token sale will be paid in NFT. This implies that customers will not incur additional charges and receive the whole purchase amount.
NFT Drop Risk
As with other digital assets, you should be mindful of the dangers associated with NFT declines. One of them is the possibility of fraud or cons.
These fraudulent tactics also range from rug pulls, phony websites, and fake non-fungible tokens to communications sent over social media, messaging programs, and emails carrying offers or claims that you have won a random reward.
Find out more about NFT Drop here.