Because the NFT industry is still in it’s infancy, we believe the “correct” way to do things hasn’t been established yet. It’d be easy to copy the homework of prior successful projects, but the goal posts have moved; We’re in a bear market and the NFT community is rightfully demanding more.
At Valhalla, we try to question every assumption and examine things from a first principles perspective. By doing so, we hope we can create new and innovative systems and products for the NFT community at large.
Today, we’re announcing the Valhalla Presale. This is an event where members of our community and reputable collectors can reserve an allocation of discounted mints ahead of our public launch. In exchange, the NFTs purchased through the Presale will be subject to a 3-month unlock schedule, during which they cannot be transferred or sold.
At the moment, only 500 NFTs will be available during the Presale.
By pre-selling a small portion of our collection, we can:
Test the market’s appetite at our ballpark mint price
Provide social validation for prospective buyers
Reward high conviction buyers with a reserved mint
We believe the traditional minting process can be improved. In the status quo, projects typically mint in 3 phases over 2 days.
Phase 1: OG Mint (Discounted)
Phase 2: Allowlist Mint (Full Price)
Phase 3: Public Mint (Free For All)
If a project is unable to mint out within the first hour of its public launch, it is written off as a irreparable failure. Because the majority of NFT buyers are from the retail class, they are less forgiving and have higher expectations than their institutional counterparts. This is a factor that’s largely out of a founder’s control and unlikely to change as high quality entrants continue to raise the bar.
There are two variables projects can control:
Mint Price
Collection Supply
How does a project determine an optimal mint price?
NFTs are a tricky asset to price because buyers view them more as a speculative collectible (art, streetwear, wine) than a traditional commodity (bananas, TV, pencil). However, unlike other alternative assets, there is nothing backing the floor price of an NFT besides the quality of the art and the team behind the project.
While an NFT is not a security, the NFT mint process is similar to a startup’s initial funding round. Potential investors must value a startup based on nothing more than a founder’s idea and charisma. With so little data, the price is ultimately determined by demand economics. Once the price is set by a reputable lead investor (a16z, Pantera, Paradigm), other investors quickly flood in, confident that the lead investor has conducted their diligence.
We already see the same behavior in NFTs. When a collector like Dingaling mints a project, the project immediately mints out. When Dingaling sweeps a project’s floor, the floor price immediately rises. Why aren’t NFT projects validating their price with reputable collectors before opening up to the public?
In the current structure, founders arbitrarily set a mint price (often based on the last successful project), hoping the market will tolerate their ask. This has routinely led to “sticker shock” moments where once interested buyers become skeptics. This creates a death spiral as everyone waits on the sidelines, unwilling to be the first to mint.
While projects like Clone X and Azuki have implemented pricing schemes like dutch auction (DA) systems to discover optimal pricing, the downside risks still persist: If a project does not sell out quickly, it will be unable to convert latent demand into buyers.
By pre-selling a small portion of our collection to reputable collectors, we can validate our mint price while leaving ample supply for our community and the general public.
In the bear market, optimizing a collection’s supply will always be secondary to the mint price. With significantly less liquidity in the market, the average collector will be much more sensitive to their entry price, wary that they won’t achieve the same return profile they’ve come to expect during the bull.
Additionally, many NFT collectors have left the ecosystem, taking with them a meaningful portion of market liquidity. With a significantly smaller total addressable market, there is less flexibility for projects to play with supply.
In a bull market, more brand experimentation could be done around mint price and collection supply. For example, an NFT that’s positioning itself as a luxury brand would ideally have a high mint price (10eth) but a low supply (500). Conversely, a mass market NFT (trading card game) would have a low mint price (0.01eth) and a high supply (100K).
Despite the headwinds mentioned above, intelligent NFT collectors are still deploying capital into quality projects at bargain bin prices. Given the significant demand we’ve seen for our NFT, we’re cautiously optimistic we can mint out a 10K collection if we remain relatively conservative (compared to prior blue chip projects) on our mint price.
The Presale will be open for 5 days. Because the objective is to validate our floor price with reputable collectors, final allocations will be hand selected by Valhalla’s core team.
In some cases, our core team may request a Discord call before approving a presale buyer.
Key Information
Discounted Mint Price: 0.25WETH
Min Quantity: 5
Max Quantity: 25
Deadline: Sunday, October 16 11:59AM PST
Unlock Schedule: 3 months
Similar to bidding on OpenSea, you must have the required WETH in your wallet to confirm your interest.
WETH is a form of cryptocurrency that allows users to make pre-authorized bids that can be fulfilled at a later date without any further action from the bidder. This allows you to submit the deposit without the WETH ever leaving your wallet. It will only be withdrawn when you’ve been confirmed as an approved buyer.
Initially, the NFTs purchased through the presale will be “locked” and unable to be transferred or sold.
The purchased NFTs will go through a 3 month unlock period, in which the NFTs will equally “unlock” monthly. This means after each month, 33% of the allocation will be unlocked for transfer and sale.
For clarity sake, if someone purchases 15 mints through the presale, they will be able to sell, trade, or transfer 5 NFTs after the first month, 10 NFTs after the second month, and 15 NFTs after the third month.