If you have ever had the opportunity to purchase a limited-edition fashion piece, such as a new sneaker, you may be familiar with the concept of “drops.” When a limited edition item is made available to the public, it is known as a drop.
When these items are sent to stores in limited quantities, shoppers camp outside hoping to be the first to get them.
NFT drops work similarly, the only difference being that they are in a digital format.
How NFT Drops Work
The typical manner in which NFT drop take place is that they are announced days or weeks in advance.
A countdown timer is then set on the website where the drop will take place. It ensures that as many collectors as possible have a fair chance of acquiring them.
However, not all NFT drops are the same. There are many formats used to conduct NFT drops.
The most common formats in which NFT drops take place are:
A standard drop gives collectors the opportunity to mint NFTs at a set price on a first come first serve basis.
For instance, a creator may release 10,000 NFTS for a given collection. Collectors can then mint the NFTs until all 10,000 NFTs are used up.
Most collections have limits on how many NFTs can be sent in a single transaction to ensure that as many people in the community get an NFT as possible.
In an open edition drop, there is no maximum limit on the number of NFTs that can be minted. Instead, collectors are allowed to mint as many as they can during a limited window, which can be five or ten minutes long.
Those NFTs then become the final edition of total NFTs minted.
This is an eBay-style auction where collectors bid on an NFT during a given period. When the auction is over, the NFT is sold to the highest bidder.
These auctions typically have one NFT only. In some NFT drops, multiple formats can be spread out amongst different pieces in the auction.
In the Dutch auction format, the purchase prices start high and then continually fall until all items sell out.
These auctions are designed to allow a fair buy-in point for collections. However, for hyped-up NFTs, sales are usually immediate at the starting price.
Where To Participate In NFT Drops
To participate in NFT drop, you will need to create an NFT marketplace account. Some of the most popular NFT marketplaces are SuperRare, NiftyGateway, NBA, and Opensea.
Once you join the marketplace, you will need some Ethereum in your account to cover the gas prices. Even when the NFT is free, you still need to pay gas fees.
With your account funded with Ethereum, you can buy the NFTs. To fund an account, you need to create an account with a crypto exchange such as eToro or Coinbase where you can purchase Ethereum.
Once you find an NFT that you like, you can purchase it and then store it securely.