Tokens that are not fungible are now one of the hottest topics in cryptocurrency right now, with the promise of significant returns if the latest collection of tokens rises in value. However, according to a new analysis from Chainalysis, only a small percentage of users get the majority of the benefits.
According to the findings of Chainalysis’s analysis, investing frequently in a diverse range of collections looks to yield the biggest earnings. It went on to say that whitelisting the practice of allowing a specific set of adherents or others to purchase new NFTs at a significantly lower price than other users during issuing events, during which a digital file is transformed into a digital asset on a blockchain is extremely beneficial to those individuals.
Users who make the shortlist and later sell their newly-minted NFT make a profit 75.7 percent of the time, compared to only 20.8 percent of the time for users who do that without being whitelisted, according to Chainalysis, which cited OpenSea statistics. According to the study, the data reveals that it is nearly impossible to earn large returns on minting purchases if you are not whitelisted, according to the report.
It was discovered that “a very small group of highly competent investors rake in the vast majority of the income from NFT collecting.” In the case of minting, when the whitelisting procedure provides early supporters of collecting with access to cheaper prices that result in higher profits, this is especially true.
We may also be seeing indications of the employment of bots by investors aiming to acquire during minting events, which could exclude less sophisticated users and even result in failed transactions that lose them money in transaction fees and commissions.
When it comes to cryptocurrency, the practice of whitelisting appears to be analogous to the preferential treatment accorded to some insiders and investors that has long been practiced in the cryptocurrency world, particularly with so-called cryptocurrency before the sales were halted by regulatory authorities.
In the past year, non-financial tokens (NFTs) have exploded into the public consciousness, with celebrities, sports teams, and artists attempting to join in on the action, and companies such as Ripple and Paris Hilton supporting efforts to advance the area.
However, there have been some issues raised about exactly what one obtains in terms of property rights when purchasing one, as well as transactions that appear to have never taken place and dramatic drops in the pricing of some NFTs in recent years.
It was noted in the Chainalysis research that “non-fungible tokens” (NFTs) “represent one of the most intriguing and rapidly growing sections of the cryptocurrency market,” and that they have grown particularly popular with retail investors. But people who want to gather and trade NFTs must be aware of how profitable the business is, according to the authors. Read more on non fungible token news.