If you’ve ever tried to buy rare streetwear (or any other kind of limited edition collectible, for that matter), you’re already well acquainted with “drops.”
Put simply, when a limited edition item is made available for public release, that’s called a drop. So when Supreme drops a hyped new design, stores receive a limited quantity of product, and collectors camp out with the hopes of being the first to buy one.
NFT drops are pretty much the same thing -- only digital.
Different Kinds of Drops
NFT drops are typically announced in advance so that as many collectors as possible have a fair shot at nabbing what they want.
But not all NFT drops are created equal.
Due to the digital nature of NFTs, drops can be conducted in a multitude of creative ways which are intended to maximize fair access.
The 4 Most Common Drop Formats
Becoming familiar with the ins and outs of potential drop structures will give you a leg up when you’re trying to mint the next hot NFT.
Here’s a quick guide to the five most common types of drops that you’re likely to see while collecting NFTs.
Standard drops allow collectors to mint NFTs for a set price on a first-come, first-served basis until the entire supply is gone. For example, if there are 10,000 NFTs in a specific collection, collectors can mint during the drop until all 10,000 have been purchased.
Many collections will put restrictions on the number of NFTs that can be minted in a single transaction or to a single wallet during their drops to help make sure that more collectors are able to participate.
With open edition drops, there’s no set maximum number of NFTs available. Instead, collectors can mint as many of the NFT as they want during a small window of time (typically around five to ten minutes). The number of NFTs minted during that window becomes the final edition size.
English auctions are most commonly seen with super-limited 1/1 of NFTs. Just like an Ebay auction, collectors bid on an NFT during a set time-frame. When the auction time period ends, the NFT is sold to the highest bidder.
NFT drops can feature multiple purchase formats spread out across different pieces in a collection, so it’s common to see standard options, open editions, and auctions all in the same drop.
When an NFT collection drops using a dutch auction format, the purchase price starts out high (ie: 3 ETH), and then continually decreases until everything sells out.
Theoretically, dutch auction drops are intended to allow collectors to decide on a fair buy-in point, so while 3 ETH may be too high of a valuation, collectors may be more willing to buy at 1.5 ETH. In practice, though, many dutch auctions for hyped up NFTs sell out immediately at the starting price.
Drops supported on DoinGud
At launch, DoinGud’s first drop mechanics will feature: 1/ English Auctions, 2/ Ranked Open Editions where users will be rewarded for purchasing the most from a specific collection, and 3/ Packs that contain randomized content/NFTs, similar to trading cards.
On the roadmap after the launch, we’ll also support Dutch Auctions and Ranked Auctions.
There are other NFT drop formats, too, and potentially even more to come as creators innovate with drops. Of course, Stealth Drops, wherein an NFT collection drops out of nowhere without any prior warning or fanfare, are always possible as well.
When you’re collecting NFTs, make sure to always keep your eyes and ears open. Exciting surprises await around every corner!
- NFTs 101: Demystifying This New Asset Class (DoinGud Blog)
- NFTs 101: Key Benefits of NFTs (DoinGud Blog)
- Follow upcoming NFT Drops on Twitter via @NFTDrops
- Understanding how Dutch Auctions work
DoinGud is an NFT ecosystem focused on inspiring creativity and positive social impact. We pride ourselves on accessibility and sustainability, providing next-gen Web3 tools to empower our community to create, curate, collaborate, and connect with one another in the digital space.
Thank you for being part of this journey with us.
Article also published on our medium blog.