Understanding the Metaplex Fair Launch
MetaplexNFT just released fair launch and it’s soon going to be the new thing on the block for launches 🔥 but what the heck is it and why do you care if the next SOL NFT you mint uses fair launch or just candy machine?
It’s a “Mango style bidding system”… no bueno? Well in simple terms it’s a public price auction.
Fair launch is a protocol by which minters/prospective buyers can bid on the price of an NFT they are willing to pay in a range that is determined by the creator.
What is the creator setting up when they say their drop is via “fair launch”?
- Fees for fair launch
- Minimum price the creator will accept for their work
- Maximum price the creator wants to sell their work for
- Anti rug reserve (optional) — money kept to issue refunds in case of a rug
- Anti rug token requirement (optional) — the minimum amount of tokens left/unclaimed at which point the anti rug reserve fund is released to the creator. For eg: If there are 5000 Jelly Beast tokens and people claim 3000 of them, the creator feels like they deserve the rest of the money in the reserve and have been approved by the Solana community
- Self destruct (optional) — this is the date at which by if the creator has not delivered the NFTs they said they were going to, minters have the option of getting a refund from the “Anti rug reserve” if they no longer trust the creator
You may ask “well the creator is setting these, why do I care?” you do, because it’s all transparent. All minters can look up the details of a fair launch and see the value of the parameters the creator has set for the fair launch through all the phases of the fair launch. “Wait… there are phases?” Yes, there are three phases in the fair launch:
- Phase 1 (Bidding): here is where the bidding wars start, minters can come in and set a price they are willing to pay in the range the creator has specified. When they place a bid, the median bidding price for the launch changes
- Phase 2 (Grace Period) — if you bid below the median, you’re not eligible for a raffle ticket so in the grace period you can “adjust your bid”
- Phase 3 (Raffle happens and tickets are given out) — finally, you’ve adjusted your bid, you’re in, the raffle is happening! Right now the lottery happens “off chain” and what that means is that the creator is running the lottery on their computer/machine but in the future it will be on-chain. The results of the lottery are available on chain. Also, you as the minter do not need to take the creators word for it, you can verify which wallets won yourself. As soon as the random lottery finishes, you’ll know if you won a ticket or not.
Now Phase 3 can end in different ways, if the mint is happening at the same time, you can directly “mint” the NFT, if it’s happening at a later date, you now can “punch” a ticket that can be used to “mint” the NFT later.
As a minter, if a drop uses fair launch, the benefits are:
- You can help creators get funds early so they can work on their NFTs using the funds by buying a ticket for their future mint
- You get a fair shot at the NFT drop
- At any time during the first two phases, you can withdraw out of the lottery based on auction interest
- Everything is transparent about the parameters of the lottery and can be verified
- You can see if creator choose to lock funds for refunds and how much it is, what date the refund would go out (promised delivery date), etc
- You bid on what you believe the value of the NFT is according to you
- Transparency, Transparency, Transparency!
In the crypto world, Fair Launch by Metaplex will set a new standard and a new way to drop your NFTs.
