Free Mint

When it comes to Free Mint, the most impressive "Free Mint" project for me should be goblintown.wtf. goblintown.wtf's highest single-day average transaction price reached 7.6ETH, and even in the current downturn, it still has a floor price of 0.8ETH. We often ask why there is such a high appreciation. For goblintown.wtf, I don't know much about the operation mode, but I can still say my opinion about the "Free Mint" of Music NFT.

About the Definition of "Free"

In the Ethereum network, there is no "free" in the strict sense, except for "airdrop". The price of gas fees depends on how crowded the Ethereum network is, and you can see the real-time gas fees here. gwei is the unit of measurement for gas fees to describe the price of gas fees, 1 gwei = 10^9 wei = 10^(-9) ETH. Usually, for a "Free Mint" NFT, you still need to pay a few dollars in gas fees.

About the Gas Fees Mechanism

I think that the gas fee mechanism of the Ethereum network is a good thing. Compared with other networks, the "disadvantage" of the Ethernet network is the high price of gas fees, but I don't think it is a bad thing.

First, from the perspective of NFT issuers, the low gas fees will make issuing NFT an unrestrained thing, which will lead to a surplus of pirated projects and shoddy projects. Gas fees in the Ethereum network will make issuers consider when issuing NFTs.

Secondly, from the collectors' point of view, if the gas fee is equal to 0, it will lead to a large number of bots and endless minting, which will lead to the loss of the meaning of "Free Mint". At the same time, if the collector thinks that the "Free Mint" item is not even worth the wasted gas fees, then it is a kind of value denial from the collector for the "Free Mint" item.

So gas fees can, in a way, filter out bad NFTs and unsuitable collectors.

From Free Distribution to A Priced Secondary Market

When the "Free Mint" is completed, the secondary market will immediately see a price greater than 0 ETH. I think this is a "visualization pricing system", and the price depends on the buyers and sellers in the market. This kind of visualization is very difficult to experience in real life, because it is hard to find a trading system where the price grows from 0.

When the supply is greater than the demand, the price (floor price) decreases accordingly. When the demand is greater than the supply, the price (floor price) will then increase. We can find the trend of price changes in the historical data of transaction prices. The factors that depend on price come from the collector's liking for NFT, and for music NFT, that liking depends on whether the music satisfies the consumer's appetite, that is, whether the music itself is good or bad.

It's pretty incredible that the goodness of the music can be reflected by the floor price on the secondary market! We seem to have found a new path to judging how good or bad a song is! It's no longer about the number of plays and the number of likes!

However, this is an idealized scenario. The reality is that variables such as "number of releases" and "bot participation rate" affect the final floor price. If you write it out in the form of an equation, it would look like this.

Floor Price = A*MQ - B*NR - C*BPR + Other

where A>0,B>0,C>0 ; A,B,C are constants ; MQ=Music Quality ; NR=Number of Releases ; BPR=Bot Participation Rate.

From the equation we can get.

1. The higher the quality of music, the higher the floor price; the lower the quality of music, the lower the floor price.

2. The higher the number of releases, the lower the floor price; the lower the number of releases, the higher the floor price.

3. The higher the rate of robot participation, the lower the floor price; the lower the rate of robot participation, the higher the floor price.

"Free Mint" of Music NFT Generates Revenue for Artists

I think that "Free Mint" of music NFT can generate revenue for artists in two ways.

First, "Free Mint" is used as advertising. When we walk in the supermarket, there are always salesmen asking us to try something. If you think it tastes good you can buy a bag, if not it doesn't matter. This kind of marketing behavior is a kind of "Free Mint", in the space of Music NFT, we can completely through "Free Mint" to attract more people to pay attention to their music, pay attention to the distribution platform, so as to pave the way for the subsequent release of Music NFT.

Second, artists can generate revenue through royalties. I think more revenue will come through royalties as time progresses. As your music gets better and your fame grows, your secondary market volume and price should reach a significant number. In the long run, an artist can make a pretty significant ongoing income from a 10% royalty. It's a virtuous cycle where the music gets better and better, and the long-term income gets bigger and bigger, further advancing the music.

Attract Potential Fans Through Public "Free Mint"

Artists can use "Free Mint" as an advertisement to let more people know about the artist and the artist's music. But there are advantages and disadvantages to this approach.

Take Felly for example.

Before Felly's public "Free Mint", I had never known the artist before. But through "Free Mint", I learned about Felly and knew that Felly's music was in my style.

So, I have collected all the new songs after this one. Since I have Felly's Music NFT, I can get one for less than the public price through a pre-sale, and Felly has managed to gain potential fans like me by making it publicly available for "Free Mint". This is the benefit of public "Free Mint".

However, public "Free Mint" also has its drawbacks. The disadvantage is the large number of bot minting.

Take San Holo as an example.

San Holo has a large fan base, so his launch attracts a lot of people, including bots.

I participated in the public "Free Mint" of "All The High (Acoustic)" in the early morning. However, I didn't get it and it sold out a second after the sale started. Most of the list was made up of bots with no purchase history, no avatar and no username.

Listed in the secondary market immediately after they sold out, they are not listed above Sound Market, but in Opensea, and listed at a low price. These behaviors can be judged as bots. I don't want to comment on whether bots are good or bad, but it's not very friendly to people who get up in the wee hours of the morning to participate in public "Free Mint".

It's true that public "Free Mint" is a good way to attract potential fans, but we can't distinguish between humans and bots. The presence of bots would make the song worth very little, because the bots could get a lot of copies and sell them at a low price in the secondary market.

To sum up, I think that if the artist wants to attract more potential fans by advertising public "Free Mint", they might as well set the number of public "Free Mint" to 500, 1000 or even more. In my opinion, there is a very close relationship between the number of releases and the value of the collection. For different artists, you can judge how much quantity should be released according to their fame. If a very famous artist issues a small number of public "Free Mint", this will only cause a rush among bots, which has no relevance to real fans, and will cause such public "Free Mint" to lose their meaning.

Furthermore, such advertised NFTs should not be included in the subsequent pre-sale whitelist, but only as a credential to the community.

Reward Long-term Holders with Whitelist "Free Mint"

Currently, artists are more likely to reward holders with "Free Mint"! This is a good thing for early collectors! It encourages long-term holders to continue to hold, and it also provides an incentive for more people to become holders.

Take High Tropics for example.

In August 2022, High Tropics released 50 copies of the song "Waterfalls" as a "Free Mint" music NFT.

In October 2022, High Tropics put the song "Caroline" up for pre-sale at 0.01 ETH and public sale at 0.02 ETH, with the promise that holders of "Caroline" would receive the next release for free a week later.

A week later, High Tropics released the song "Start Anew" as a "Free Mint". (I personally love this song!)

In November 2022, High Tropics adopted a strategy of Free Mint, pre-sale 0.01 ETH and public sale 0.02 ETH for the song "Scars".

So if you're a fan of High Tropics, you can get a lot of "Free Mint" Music NFTs by being a long term holder. Also, as a long term holder, even if you miss out on the "Free Mint", you can still get your favorite Music NFTs by pre-sale at a lower price than the public sale price.

The Current State of The "Free Mint" Music NFT Secondary Market

“Free Mint” without bots entry

Using DLG. as an example.

This "Free Mint" is a relatively successful case, the number of participating bots is very small, so the price in the secondary market is not very low.

At this point, the floor price of Sound Market is around 0.1ETH. As a "Free Mint", this floor price is a success. Not only did it attract more people's attention, but it also ensured the collection value. But this situation depends on the absence of bots.

“Free Mint” with bots entry

Using Clear Eyes as an example.

I observed the whole process from pre-sale to public sale. Clear Eyes set the number of whitelist qualifications to 100, and it was reasonable that the pre-sale phase could just sell out. However, the number of pre-sale participants was only 38, so the 62 versions of the public sale were minted by a large number of bots and a small number of people. This eventually led to a secondary market floor price of only about 0.006 ETH.

Summarize

1. Floor Price = A*MQ - B*NR - C*BPR + Other

   where A>0,B>0,C>0 ; A,B,C are constants ; MQ=Music Quality ; NR=Number of Releases ; BPR=Bot Participation Rate.

2. If the artist wants to advertise yourself, you can set the number of public "Free Mint" to 500, 1000 or even more, depending on your fame. If you are not sure how much to set, you can set a range of values.

3. The public "Free Mint" NFTs are not whitelisted for pre-sale and can only be used as a credential to enter the community.

4. Artists can reward long-term holders by whitelisting "Free Mint". At the same time, the public sale price is guaranteed to be greater than 0.

The artists and songs mentioned in this article are only used as case studies for "Free Mint", without any targeted criticism or accusation. All opinions are personal and for reference only.