Editor’s Note (Updated): This article was originally published during the peak of the 2021–2022 NFT market boom and contains historical market examples and terminology. Please note the following key developments:
- Ecosystem transition to “Allowlists”: The term whitelist has largely been replaced in Web3 by allowlist as the standard industry term.
- Gas Fees & Technical Upgrades: Following Ethereum’s transition to Proof-of-Stake and Layer-2 scaling upgrades, extreme “gas wars” have significantly diminished. Allowlists now primarily serve for bot prevention, community access, and targeted allocation rather than avoiding high network fees.
- Market Valuations: Historical pricing cited in this article (such as BAYC’s 100 ETH floor price) reflects 2022 market peaks. Current floor prices sit around 5–6 ETH.
The term ‘whitelist’ has become common in the NFT space, with people using it on Twitter, Telegram, and Discord. A Whitelist is a list of a set number of community members who receive specific benefits for being on it. Typically, you can join the list only by completing tasks set by the project. It could be as simple as inviting a few friends to the Project’s Discord or Telegram group, or it may be more complex.
What Is a Whitelist
The concept was created to reduce gas wars. When an NFT project opens its minting window, people tend to use the highest gas fee option to mint their NFTs faster than others. Congestion usually occurs during that period, and those who prefer to stick to the regular gas fee range may not have their transactions verified. In the minting frenzy, people compete over how much they are willing to pay in gas fees, excluding the value of the underlying NFT. Some people end up paying hundreds or even thousands of dollars in gas fees to be among the first to mint the NFTs before the window ends.
These whitelists are created by projects to allow community members to win free NFTs, mint them before others, or access them at a discounted price. Usually, this system aims to improve the project’s visibility by encouraging community members to promote the platform on social media and invite potential users. Joining a whitelist gives you access to a VIP list, where members enjoy perks not available to the public or other community members.
Whitelist applicants may need to enter their wallet address in the form, which the team uses to add those addresses to the project. This process lets address holders mint the project’s NFTs before others, at a discount or for free. Projects give community members a specific timeframe to opt in.
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Why Do NFT Projects Create Whitelists?
Whitelisting means the team pre-approves a wallet address for a future NFT mint. If the project is built on Solana, the address used is a Solana address. NFT creators use this strategy for marketing or to ensure a seamless minting process.
• Creating a buzz
New NFT projects are developed regularly, and many of them are based on similar concepts utilized by their predecessors. To differentiate themselves from competitors, they devise schemes that reward community members who write about them on popular social media platforms such as Twitter, Discord, Reddit, and Telegram.
Sometimes, they encourage people to utilize the word-of-mouth marketing strategy, which is called Shilling in the crypto space, to propagate the features of the platform. To do this, users may have to leave comments on popular NFT influencers’ posts.
These members end up shilling these projects and upload evidence of their engagement to the Project’s Whitelist Discord channel. To draw public attention to a whitelist event, the team may hire an influencer.
• Spreading out NFT sales
For various reasons, a project team may decide to spread out NFT sales. This could help ensure that potential buyers don’t crowd the sales. Spreading out sales may also help the project maintain perceived value. When the minting process is open to everyone at the same time, it can hurt the network’s effectiveness and make minting a Herculean task.
Projects use whitelists to do this by giving participants early access to sales or minting.
• Transaction or gas fees
When a network becomes congested, it becomes difficult for users. Gas fees skyrocket. Transaction speed slows, and transactions may not complete.
Minting on Ethereum is now expensive because of the network congestion it often faces. When an NFT project lets everyone mint NFTs on Ethereum at the same time, it can significantly raise gas fees and frustrate community members. To address this, designers developed the concept of a whitelist, which lets people mint NFTs in stages. Some teams are opting to build their projects on less expensive networks such as Solana and NEAR.
Low transaction speeds and failed transactions are typical characteristics of a congested network. During a sales rush, the project’s website interface, which users use to interact with the blockchain, may also fail, necessitating the creation of Whitelists.
• Smart marketing
NFT teams use a whitelist system as a smart marketing tool, passing the grunt work of convincing people to join the project to their potential buyers and early community members. The would-be buyers view this strategy as a way to earn NFTs that they can flip for a profit without paying the full price or getting them for free. While this benefits both parties, creators still have the advantage. Early community members aren’t guaranteed a spot on the whitelist, even if they complete every task and fulfil every obligation tied to the competition. Typically, creators can choose who joins the list, and they may apply hidden criteria when judging.
• Driving up the value of the NFTs
Whitelist activities are designed to increase the amount of attention an NFT project receives. When a project draws public attention, demand is likely to outweigh supply, increasing the NFT’s price. The Bored Ape Yacht Club NFT project, for example, has a floor price of 100 ETH, meaning the lowest-priced BAYC NFT is worth at least 100 ETH.
How To Join a Whitelist?
Whitelists are often only valid for a limited time. NFT enthusiasts who don’t make the list may have to wait until the general minting process opens to the public.
To join a whitelist,
Look for a project still in the pre-launch phase: Check the NFT Topics section on Twitter regularly.
When a whitelist event is about to begin, projects announce it.
Once you discover a new project, the next step is to join the project’s Discord group. Whitelist activity instructions are frequently published in the Discord channel.
Typically, projects that announce whitelist events are either new projects that haven’t debuted yet or current projects considering a new NFT series.
What Is the State of the Whitelist Right Now?
Whitelist activities usually aim to foster community building and interaction, and even create buzz around the project.
Some NFT projects assign responsibilities to community members, such as promoting the project through shilling, inviting people to join, solving riddles, dropping messages in the group, and other activities.
As days go by, the number of whitelist tasks people must complete to access the system’s perks continues to increase. Usually, people spend long hours each day doing these activities, which may not be sustainable.
In the NFT scene on Twitter, people have complained about the unsustainability of this model, as some feel it is strenuous and may undermine the core purpose: community building.
Douglas Boneparth, a CNBC Advisor, is one of those who share this thought, and he made this known in a tweet where he jokingly poked holes in the strategy of grinding that is currently visible in the whitelist system,
“I finally got on the whitelist for an NFT project I’ve been following. All I had to do was join 5 Discord servers, tag 18 friends in a tweet, provide a sample of blood, pat my head, and rub my tummy. Worth it.”
In Conclusion,
- Whitelists were created to reduce the occurrence of gas wars.
- Projects use Whitelists to improve their marketing strategies.
- Whitelists are smart tools to shift a part of one’s marketing needs to potential buyers.
- People participate in Whitelists as a way to earn NFTs for free, at a discounted value, or mint them before others.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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