Non-fungible tokens (NFTs) exploded last year, reaching peak sales of $12.6 billion in January before settling down to $1 billion in June. While many critics proclaim the NFT bubble has burst, more and more brands and artists are onboarding NFT business models and leveraging the technology to create new ways of engaging their users, incentivizing loyalty, and generating new revenue streams.
What’s clear, however, is that the NFT landscape has dramatically shifted, and relying on NFT hype alone will not sell out your collection. Now, it’s crucial to carefully plan out your strategy and launch a meaningful NFT collection that creates real value for your users. As the NFT space has evolved, so has its complexity, and new projects looking to launch must learn from the trial and error of the thousands of NFT projects that have come before.
To help you on your journey,, we’ll look into four of the most common mistakes made by NFT projects, how to avoid them, and how to launch an NFT project successfully.
Don’t assume the word “NFT” will sell out your collection.
When you hear the word “NFT,” what comes to mind?
In the early days of the NFT boom, the mere mention of the term “NFT” was enough to sell whatever digital art you could crank out. As a result, many overpriced and overvalued collections sold out, leaving users with eventually worthless tokens in their wallets.
High-profile examples include Jack Dorsey’s first tweet, which sold for $2.9 million, and upon resale didn’t receive any bids above $14 thousand. So what’s the problem here? The original price of this NFT was purely based on speculation and hype. It was overvalued and dramatically underdelivered as an investment. With no real utility and questionable value, the buyer was left with an unredeemable asset that put a hole in his pocketbook.
When launching your collection, it’s imperative to understand that most users no longer want NFTs for the sake of owning NFTs. The success of your NFT collection will depend on you delivering a truly meaningful and useful product and attracting a substantial number of community members.
Which brings us to the next point…
Don’t underestimate NFT utility.
Are NFTs just pictures on the blockchain?
Nope. NFTs these days are less and less about the metadata (images, audio, video, etc.) they represent, and more and more about what users can do with them. Making your NFTs useful is one of the most important considerations when launching your project.
Whether this involves an incentivization system or more tangible value through exclusive membership to virtual and/or real-world events or clubs (e.g. the Flyfish Club, an exclusive NYC private dining club with NFT membership passes), the utility of your digital assets should be one of the core factors of your project’s design.
Some other great examples of truly useful NFT collections include Gary Vee’s Veefriends and CloneX by RTFKT.
Don’t think your users are all web3 natives.
Along your journey into launching your collection, you’ve probably learned quite a bit about NFTs, blockchain technology, NFT marketplaces, and how to obtain and use crypto to buy and sell digital assets.
But do most of your potential customers have a lot of experience with Web3 technology?
Some do, and some don’t. When you create an NFT collection:
Don’t assume your users have the same level of knowledge as you do.
In our fiat-based modern world, the majority of your potential audience may not have any Web3 experience whatsoever. This means you’re going to have to take steps to ensure their experience with purchasing and using your NFTs is as smooth and straightforward as possible.
Here are some ideas for how to streamline their experience:
- Implement a fiat payment gateway: There are many options available, the main idea is simply to allow your users to buy your NFTs with their credit/debit cards or other online fiat payment medium of choice.
- Consider custodial wallets: If you implement a fiat payment gateway, your users will still need some kind of blockchain wallet to hold their NFTs. A custodial wallet means that they don’t need to deal with setting up a crypto wallet or holding their passphrase. You, as the collection provider, create wallets for them and hold their private keys, allowing them to login using their credentials to view and interact with their NFTs through your platform.
- Avoid Web3 jargon: While much of the Web3 community derives pleasure from throwing around cryptic buzzwords all day every day, newbies to the space are often deterred by the onslaught of jargon. In presenting your project to the world, try to make the language as accessible and straightforward as possible to the widest possible audience. The less people you confuse in explaining why your collection is amazing, the more likely it is to be successful, and the higher the opportunity for reaching new users.
Don’t put off sorting out the legal side of things.
Pop quiz: when someone purchases an NFT from your collection, what intellectual property rights are automatically transferred to them?
Take your time, Google it, and then read on.
All done trying to figure it out? As you can see, it’s not that simple. The NFT space is still very much a legal “Wild West,” and the frameworks for intellectual property law haven’t even been created yet.
The good news is, many high profile cases are already in process and will establish legal precedents in the coming years. In fact, top legal minds are already at work establishing frameworks (e.g. the Harvard Blockchain Task Force, of which Artiffine is a founding member).
The bad news is, for the average NFT creator or brand, the intellectual property side of NFTs is still nearly impossible to navigate. This doesn’t mean you should simply ignore it. If you leave the legal side of things to deal with later, it could very easily come back to bite you.
The takeaway here is, you need to look into the legal implications of selling NFTs BEFORE you launch your collection, and you should strongly consider consulting with experts in the field before you do. Many popular NFT collections are just now sorting out their IP licenses, and it’s always better to do so sooner rather than later. Artiffine’s legal team is always available for consultation, so keep it in mind in the lead up to your launch (you can always reach us at email@example.com).
Artiffine can help.
We hope this has given you some ideas for how to launch an NFT collection and what to avoid.
If you need help designing and/or building your project, the Artiffine team is available to help with any or all of it. We take care of everything from concept development and strategy to custom smart contract development, web and app development, marketing and community building, and legal services. We can handle everything or support your capabilities in any individual area.
To learn more, check out our services on our website, have a look through our portfolio, and get in touch with us for a free initial consultation. We’d love to hear about what you’re building!