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Exciting NFT Drops

Oct 13, 2022 2:36 PM

One of the most exciting times as an investor or collector of Non-Fungible Tokens is the moment when a major drop takes place, people swoop in to grab a piece of a collection for an amazing price and either they have a centrepiece for their wallet or have gotten in early on a potentially successful project.

Because NFT drops come in all shapes and sizes, with an array of different styles and purposes, investors need to know as much as their can about a project that they intend to invest crypto into, as well as know what they want to do with the NFT once it is in their MetaMask hands.

To help with this, this mini-guide is going to look at the evolution of the NFT drop, explore the ways in which an NFT is more than the image connected to it, and look at ways a project can stand out in a fast-moving marketplace.

What Was The First NFT Drop?

Exactly which NFT collection was the first “drop” depends on whether an NFT needs to have the type of distribution associated with a modern drop.

The very first NFT was made in May 2014 by Anil Dash and Kevin McCoy and was a relatively simple abstract animation known as Quantum registered on the Namecoin blockchain, an early alternative to Bitcoin.

A year later, the first launch of an NFT collection was an early tile-based building game known as Etheria that was released on the then-new Ethereum blockchain.

It featured a lot of systems that are a standard part of NFT collections now, such as a dedicated exchange, but it was far from a successful drop at the time, with the vast majority of Etheria’s tradeable hexagons only being sold during the 2021 gold rush for NFTs and crypto.

It would take until the middle of 2017 for the first NFT projects of any major notability to be launched within just a few short months of each other, each of which has a reasonable claim to being the first NFT to truly have a major drop.

The first is Curio Cards in May, a set of 30 NFTs by a range of different artists that are seen to be the first digital art collection on Etherium, although far from the last.

A month later, CryptoPunks was one of the first notable drops on the Ethereum blockchain and helped to foster interest in NFTs primarily by giving them away as part of a free mint (outside of gas fees which at the time cost pennies).

It also inspired (although does not use) the ERC-721 standard which is the token standard most NFTs use to this day.

Finally, there is CryptoKitties, a NeoPets-inspired critter collection and breeding game that was arguably the first particularly successful NFT project, selling cats for over £100,000 within a month of the game’s release and was so successful that for a time it accounted for a quarter of transaction traffic on Ethereum.

More Than An Image

Even as early as 2017, many of the most successful NFT projects were more than a profile picture or a piece of digital art but conferred a wider application, and any successful drop needs to have a unique selling point that confers added value.

What helps with this is the smart contract system that powers every NFT. This is the system that traditionally manages ownership, how NFTs can be transferred and automatically distributes royalty payments to the original artist as noted in their white paper.

However, smart contracts can be used for far more than basically royalty splits and transactions, and this is where some of the more fascinating applications of NFTs can be found.

One of the most unique examples of this is HUMAN ONE, a mixed-media sculpture created by digital artist Beeples, most famous in NFT circles for Everydays: The First 5000 Days, the first NFT to be sold by a traditional auction house.

The sculpture consists of a figure who resembles an astronaut walking through different landscapes projected on the walls of the sculpture, each randomly accessed from a data pool developed by Beeples himself and accessed through the blockchain.

This is one of the most ambitious examples of merging physical and digital art, but there are other ways in which an NFT provides additional benefits and functionality.

One of the most notable NFT collections, Bored Ape Yacht Club, provides access to websites determined by the presence of a Bored Ape, as well as commercial usage and ownership rights conferred to whoever owns the NFT at the time.

Other collections provide similar member’s only access, with VeeFriends NFT making this the primary focus of the collection.

Game-based NFTs connect functionality and features in a game environment into an NFT itself, meaning that an in-game item can theoretically be bought, sold or traded to anyone on the same blockchain, although the exact terms for this can vary depending on the game.

These include the different clothing items found in the open-world sandbox Decentraland, as well as the Axies (as well as the items and land) of Axie Infinity.

Some have theorised that NFTs could provide video games with a kind of “universal inventory” where items can be used in more than one game or traded from one game to another, although in practice there are complexities that make the use of NFTs in this way somewhat unlikely.

There have also been several attempts to link physical, tangible object ownership to NFTs, although the exact mechanics of how these transactions would work for buyers, sellers and the taxman have yet to be worked out.

This was the complexity surrounding the first ever piece of property to be sold as an NFT, where the ownership of the property had to be held as an LLC in the USA, the NFT holder gets the rights to this LLC, and therefore when the NFT is transferred the ownership of the LLC and thus the property gets transferred as well.

This highlights, however, that the appeal of an NFT drop comes not only from the art itself or the ability to resell it but from all of the potential for access, functionality and value that it offers.