Good day everybody,

Welcome to CryptoGod-1's blog on all things crypto. Today I will be writing about a topic I considered after seeing a Tweet of a similar manner. It made me consider this topic in another light as I had already been writing a post regarding the issues with NFTs, which can be found here: Ponzi Schemes and Crypto - What can we do about it?

While I am sure by now everyone must be well aware of what a non-fungible token is, I have added the below image from investopedia to give a nice definition for anybody scratching their heads. They come in all shapes and forms, although the more notable NFT's which gained popularity were those revolving around digital art, such as Bored Ape Yacht Club or Crypto Punks.

With so many issues around NFTs, many arising from bad actors in the space, a Tweet from @NYCPunter has brought forward a question which opens up a lot more issues within the space. Is the way we mint NFT collections broken? Many, many projects have been created over the past couple of years, with many of them working off the process of 'mint now and we will develop the project later,' meaning users are paying premium prices for a product which is not yet complete, and sometimes has not even begun.

https://twitter.com/NYCPunter/status/1628012371913441281

When this happens, as we have far too often seen throughout 2021 and 2022, the founders are left with little to no incentive when it comes to completing the project. They have already gotten paid, often in the millions, for a product which does not even really exist. Why would they go about completing it when there is little to no benefit for them in doing so? Of course the optimists among us would state that a sense of duty should be the overriding argument in this scenario, and that any individual or entity is legally responsible to complete the product they originally sold, albeit in advance. The naysayers however would argue that if developers have already received their financial incentive, what incentive do they have remaining? To grow the product bigger and earn even more money? Sure, although most receive life changing sums of money in the initial sales and at that point don't consider it necessary to push for further financial rewards. If you won the lotto, would you keep buying lottery tickets?

We also should consider the first-come-first-served (FCFS) mechanism which is instilled in almost every NFT drop to date. The NFTs are sold at what many would consider lower prices than what the market will value them at for secondary sales, meaning low prices and excessive demand effectively create race conditions, with only the earliest buyers having any real chance to mint an NFT during a highly anticipated release. When gas fees and what can be considered as 'gas wars' during peak times then the chance of a wider audience being involved in an NFT mint decreases further. These 'gas wars' also created a more difficult and uncomfortable experience for all users on the blockchain, not just those involved in a mint. 

This is a tricky one really. Almost the whole fundamental process of crypto and NFTs has been based upon:

• ICO's (initial coin offerings)

• Whitelists

• Hidden reveal mints

Of course there have been other ways and means of a crypto being launched, such as the launchpads on Binance and the likes, but in general I think we could all agree the most common ways have been the ones I've listed. There are surely other alternative mechanisms to explore beyond the traditional methods, which could make new crypto tokens and NFT mints more attractive and approachable for a wider range of users.

One such approach which could be taken is known as a smart batch auction. This could be applied to NFTs, and potentially crypto, although it would be more common for NFT releases. Within this method, instead of having a fixed price for the NFTs, a user submits a bid to a smart contract which specifies the amount of NFTs (or tokens) they wish to purchase, and what price they are willing to purchase them for. This bidding period would last for a fixed amount of time, and upon completion, a price is calculated to match the demand and supply. Users who bid above the sale price get the NFT along with a refund of any additional ETH spent on the bid, while those who bid below the sale price get their ETH refunded by the smart contract. This would eliminate any gas fee wars, and race to mint first.

Another benefit which this method would add to a release of either an NFT or a new crypto token would be that if a transaction fails, the user is not charged the additional gas fee. This is something anybody who has taken part in NFT mints will understand can be very annoying. Along with this, there is the added benefit and protection that any bots will be unable to see if a user has minted a transaction in the public mempool, meaning copy-traders using bots are unable to immediately jump in and place a bid on a similar NFT / token as they are unaware until after the initial bidding period is complete.

Of course this is just one potential solution, but it could be a very interesting step in creating a more balanced and efficient ecosystem for both NFTs and crypto. The idea, from what I have read and learnt about it, came from a paper written by @hasufl and @_anishagnihotri which you can see in the tweet below.

https://twitter.com/FrankieIsLost/status/1450490193136422918

Are there better and more plausible solutions out there to level the playing field when it comes to NFTs and crypto launches? Of course the issues such as users not having enough of a specific crypto to afford said NFT or token cannot be rectified, but certainly there must be, and are, better ways than the current first-come-first-served and gas wars methods. Let me know what you think in the comments.

Have a great day.

Peace. CryptoGod-1.