NFT projects are popping up everywhere — but a surprising number don’t make it past the 24-hour mark. So what’s the story? Why are so many NFT initiatives dead on arrival? Today, let’s talk about how to avoid an NFT launch disaster.
Realms of Ruin: An NFT Cautionary Tale
Perhaps one of the more illustrative examples of a recent NFT project failure is Realms of Ruin, which promised to be an “imaginative and exciting new universe of stories, made by the community, and owned by the community.” The brainchild of six young-adult novelists, Realms of Ruin was meant to be an NFT fantasy world where participants could sell “a robust collection of NFTs.” Promotional material for the project explained:
Join us in expanding these stories by adding your own, purchasing the official character cards, and playing in these worlds! Your tales can be minted into NFTs whose value could rise as your readership does. As the world expands, the authors will be reading closely to decide which stories and characters are compelling enough to become canon.
The Realms team chose Solana as its blockchain network because they wanted “everyone to be able to participate, including many people new to crypto.” They also pointed out that “low gas fees + high performance really matters.”
Confused? Don’t worry; you’re not alone. The project’s targeted demographic greeted the announcement with a near-unanimous thumbs down. Ultimately, the Realms of Ruin team pulled the project’s plug within hours after investing time and money.
Where Did Realms of Ruin Go Wrong?
From our (admittedly limited since we’re not involved in the project) vantage point, the number one mistake made by the Realms of Ruin team was that they didn’t spend enough time considering the potential reactions and plan for several scenarios.
Instead, they seemed to throw themselves at the project without first taking the community’s temperature. And unfortunately for the Realms team, the demo proved to be highly skeptical of NFTs.
Every NFT Startup Must Do This
To be clear, we’re not saying the young-adult fantasy reader community is void of NFT enthusiasts. But evidenced by the feedback, a sizable portion of the demo still hasn’t jumped aboard the crypto train. That’s not to say that they never will, but educating the audience should be a priority for any NFT startup hoping to onboard an uninitiated demographic onto a token-based platform.
NFT Launch Checklist: The Four Steps to Getting it Right
Before launching an NFT project, consider the following:
- Gauge Interest and Educate: Successful NFT projects are ones the target demographic understands. You may have the best idea in the world — and it may be genuinely brilliant — but if the people to whom you’re trying to sell it don’t get it or are hostile toward cryptocurrencies and related products, it’s going to be a rough, uphill battle. If you believe in your idea and want to pave a market-making path, budget for consumer education.
- Intellectual Property Check: Currently, the most common NFT legal entanglements involve intellectual property. So before you launch, make sure that everyone who holds copyright or trademark rights over the NFTs’ contents is offered a royalty. If they decline to participate, remove their portion from the project. Who should you be contacting? Artists, musicians, agents, writers, and studios that may have contributed to the original content are good places to start. Click here to read up on the Art Wars NFT legal battle. It’s an excellent example of how an NFT project can miss the intellectual property mark.
- International and Domestic Privacy Law Check: Countries and governing bodies have passed a slew of digital privacy laws over the past five years. The mothership is the EU’s General Data Protection Regulation (GDPR). Moreover, parties hoping to grant access to California residents must comply with the state’s smorgasbord of data privacy laws.
- Payment Considerations: Who will be collecting the money? Are you doing it through an established exchange that has secured the proper “money transmitter” licensing requirements? If you don’t know the answers to these questions, speaking with an NFT attorney may be wise.
Connect With an NFT Launch Lawyer
The Kelly Law Firm works with startups, established crypto businesses, and individuals that want to launch NFT collections. We’ve been in the blockchain and crypto space longer than many other firms and know the landscape well. If you’re ready to talk, so are we.
