a16z interprets the latest NFT issuance strategy Wave Mint: how it works, advantages, and challenges

Original Title: "A new NFT launch strategy: The wave mint"

Original Source: Scott Duke Kominers & 1337 Skulls Sers, a16z crypto

Original Compilation: Odaily Planet Daily

In NFT projects, minting (the process of initially allocating tokens) largely determines the tone of your community and how the community and the broader market perceive the project's development. This means there needs to be a mechanism to attract the participation of the people you want, executed in a simple, secure, and appealing way.

In this article, we will review a new minting strategy called "wave mint" recently launched by 1337 Skulls, where members of different NFT communities are invited to participate in a series of waves (waves being opportunities to mint). Users participating in the mint start from the community and gradually expand outward. Wave mint leverages on-chain data and reputation to select holders that closely match the project's culture and goals while shifting attention and energy toward the project. It also avoids common issues associated with "free mint," such as Gas Wars and bot interference.

Next, we will introduce how the wave mint mechanism works, its advantages and challenges, and some experiences we gained from running wave mint in practice. As NFT communities experiment with different minting and participation strategies, we hope this will become a minting method that artists, builders, and other project creators can adopt.

How the Wave Mint Mechanism Works

In theory, giving away NFTs for free is a great way to attract more users to participate in the project. However, in practice, "free mint" complicates community management because it can be overrun by bot networks and/or users who plan to "flip NFTs" rather than commit to the community long-term.

How can a project find people who align with its values and goals? The answer is to look for those who already own relevant NFTs in their crypto wallets and invite them to join.

In wave mint, different groups of people are invited to mint in sequence, with each open "mint wave" lasting anywhere from a few minutes to several days. As long as the number of participants in each wave is relatively low compared to the total token supply, minting can be free (or below the market clearing price) without leading to Gas Wars.

The groups invited to mint in different waves should recruit holders who are likely to engage seriously with the new project and support its goals and vision. Perhaps the simplest approach is to leverage established communities with "shared interests": 1337 Skulls provided a "mint wave" for similar cc0 projects (like Nouns and Blitmap). Meanwhile, an on-chain game might offer a "wave" for holders of projects like DigiDaigaku and Pirate Nation to participate in minting.

The key point is that each wallet should only be allowed to mint once, even if it is eligible to participate in multiple "wave mints." Many NFT communities do have overlapping participation, so limiting each wallet to a single mint helps ensure non-overlapping and widely distributed holders. Even with the "single mint" restriction, users holding NFTs from multiple invited communities still have a better chance than the average person. If they miss the first wave eligibility, holding NFTs from multiple invited communities will earn them more participation eligibility.

The community itself should be carefully curated, first developing a strong core holder community and then building outward. This strategy requires establishing a close connection between the core community and social identity, then leveraging the "network" to expand outward, connecting to networks that are distant but like-minded.

Early Waves: "Trusted Relationships" ------ Early waves should focus on "trusted" communities. In these communities, creators have strong personal relationships and established "presence" and reputation. Collaborating early with close and trustworthy communities can help build trust in the new project. Especially since in wave mint, people typically mint other NFTs from their wallets, which may even be high-value NFTs. Establishing early mints through reliable connections helps build "social proof" that people feel confident in the minting process.

Next Wave: "Strengthening Relationships" ------ Once a trusted core community is established, the next step is to target "relationship-strengthening" communities, which are those with significant overlap in the number of holders with the communities brought in through the earliest waves. Community users grow through "word of mouth," which also helps attract those who particularly want to be part of the project.

Later Waves: Once a project has established a core community and attracted attention from other relevant communities, it becomes possible to open many new windows to larger communities with weaker connections, attracting those who may not have direct ties but showed interest in the project during the early waves.

Testing the Wave Mint Mechanism

We tested the wave mint mechanism during the launch of 1337 Skulls, an NFT project aimed at building bridges between NFT communities that open their intellectual property for expansion and remixing under "cc0 no copyright license." Wave mint is a way to attract holders who are passionate about cc0, on-chain art, and the broader internet remix culture.

We started with our close community and then opened waves for holders of many other projects in the cc0 NFT ecosystem. As we progressed deeper into the minting process, we gradually introduced participation waves for larger groups but for shorter durations. Ultimately, our goal was to provide particularly brief waves for holders of various NFT projects that share commonalities with the projects selected in the early waves (e.g., similar aesthetics, release dates, and community management styles). In this way, we filtered those particularly interested in joining us but previously had "loose connections" with the community.

Evaluating the Wave Mint Strategy

By design, the wave mint approach selects those who already align with the project's goals and values. Additionally, each wave introduces a group of holders from an established community, which immediately creates network effects that help "break the ice."

From a market entry perspective, this provides an important opportunity for compound audience growth—"attracting the next holder through the original holder." The information about each mint wave spreads rapidly within and between communities through word of mouth. From a community-building perspective, the wave mint approach helps ensure that most token holders have at least a few strong connections within the community from the start.

We also found that, at least in our case, the wave mint process itself attracted people's attention to the project. The minting over hours and days allowed the 1337 Skulls community to gain exposure as NFTs were released, making it easier for new community members to join in real-time.

From a mechanism design perspective, the wave mint mechanism means that people's wallets effectively serve as a form of "personality proof." Many people keep most of their NFTs (especially high-value NFTs) in one or at most a few wallets (which is not a recommended security practice), and limiting each wallet to mint one NFT helps reduce double counting. For example, in the later stages of the 11337 Skulls project's mint, the project had over 50% independent holders (measured by different wallets), which is much lower in supply concentration compared to many whitelist mints.

Additionally, spontaneously opening mint windows for a short time makes the entire minting process more challenging. This also makes it easier to monitor minting in real-time and detect anomalies, such as if someone distributes snapshot assets across multiple wallets to gain multiple "free mints." The wave mint mechanism allows the team to easily pause minting in such cases. Since each individual wave is small relative to the total supply, it is possible to synchronize supply with demand, thus avoiding Gas Wars.

Comparison of Wave Mint and Regular Whitelists

Compared to the more common strategy of running multiple whitelists (allow-lists), the wave mint strategy has several advantages. In this strategy, members of specific communities have a pre-registered opportunity and may enter the mint list.

While whitelist mechanisms give people enough time to discover the project and register, they often fail to concentrate participation. Many people, including ourselves, registered for whitelists but forgot to participate in the relevant mint when the time came. The wave mint strategy tightens the feedback loop—from initially learning about the project through existing NFT communities to taking action to mint, and then subsequently joining and participating in the community.

With early whitelists, it is also uncertain how many people will participate in minting. This often leads teams to over-allocate supply, resulting in large-scale Gas Wars. In contrast, wave mint allows the project to dynamically scale the number of available positions in real-time, adjusting supply to meet demand. You can choose to let a "wave" last longer or open multiple "waves" and provide a specific number of mints for particular communities.

At the same time, multiple whitelist mechanisms make it harder for users to be restricted in minting, as they provide users with numerous opportunities to reposition assets to gain multiple whitelist spots. The wave mint mechanism directly addresses this loophole, although doing so largely relies on conducting snapshots in advance.

Finally, wave mint has another advantage. Whitelists managed through applications or lotteries do not necessarily guarantee success. In contrast, wave mint is more likely to create a positive open opportunity framework. Even if people do miss the wave they are eligible for, there are still other opportunities to participate.

Challenges: Operations and Security

From an operational perspective, executing wave mint is complex. It runs for a long time and requires careful synchronization between the front-end and back-end teams throughout the process. The front-end and social media teams will continuously post on Twitter, attracting users to participate in Discord and generating excitement and attention for the project (as well as speculation about the next possible open community wave), while the back-end team will switch wallet lists, open and close mint waves, and ensure everything runs smoothly.

At the same time, there are some key security concerns from the user side. Essentially, this mechanism entices people to mint with the wallets they use to hold other digital assets, often those that may be particularly valuable, such as tokens from major communities. Malicious actors may attempt to create fake wave mints to access these wallets that hold users' high-value NFTs.

For wave mint, it is crucial for people to carefully check each mint invitation, and the team has the responsibility to provide clear information and documentation. With the rapid opening and closing of waves, smart contracts and other key information must be checked in advance and clearly explained and documented. (While it is very important for the team to implement maximum security measures around Discord, social media, and other communication channels, wave mint especially needs to avoid malicious actors stealing legitimate wave mints midway.)

In the long run, it would be best to have dedicated delegated solutions optimized for wave mint, allowing people to delegate access so they do not have to mint directly from the treasury wallet. Finally, in terms of incentive mechanisms, if "wave mint" becomes popular, people may start storing their digital assets in many different wallets, hoping to maximize their chances of participating in minting. This will require more creative criteria to determine who should be allowed to participate in each wave.

The way an NFT project forms its initial community is crucial for determining its path forward. Getting tokens into the right hands is essential for building a community-native culture. Wave mint is a powerful way to address this issue. By inviting members from different communities to join in batches, it is possible to build a network of holders in a way that fosters a long-term healthy and stable community, gradually expanding from trusted core members outward.