In common parlance, the term whitelist often evokes comparison with its dubious-sounding counterpart, blacklist. However, a whitelist in the crypto world refers to a list of members approved for a specific event. This blog will educate you on everything you want to know about whitelisting and how it benefits crypto investors.
Whitelist in crypto: An overview
The term whitelist usually refers to a list of people or things considered acceptable. In cryptoverse, it refers to a list of approved members for a specific crypto event, such as pre-sale, an Initial Exchange Offering (IEO), or Initial Coin Offering (ICO).
The purpose of a whitelist is to make sure that only selected members who meet specific relevant requirements participate in a crypto event. The approved members can include individuals, organizations, wallet addresses, or algorithms.
What is an NFT whitelist?
NFT whitelisting is the practice of getting a wallet address pre-approved for mining non-fungible tokens (NFTs). To further simplify, an NFT whitelist consists of a list of individuals or wallet addresses that get priority to mint NFTs at a predetermined time.
Popular NFT projects usually have an engaging community of users on the watch-out to get hold of the latest NFT offering. In such cases, NFT whitelisting helps loyal users to mint NFTs before a sale or public minting event. Moreover, NFT whitelisting is used as a means to reward early adaptors. In some NFT projects, the competition among the users to first mint their own NFTs can drive up the network fees. Implementing NFT whitelisting in such situations can bring down network fees.
How does whitelist in crypto work?
In the crypto ecosystem, a user on the whitelist gets priority in an upcoming event such as ICO, IEO, or token sale. Most crypto projects evaluate potential traders based on their required criteria before including them in the whitelist. Traders usually want to be whitelisted as it gives them a potential advantage. Hence, many active traders show eagerness to get whitelisted ahead of project launches that excite them.
The whitelisted traders get an early access benefit, such as competitive pricing and a time slot. Every crypto project will have its time slot. The whitelisted traders wait for their allotted time slot to access the benefit offered. Moreover, whitelisting also helps create hype around the project. Often, traders who are active, engaging, and loyal are added to the whitelist to achieve this objective.
The benefits of whitelisting
Whitelisting in crypto offers many benefits to traders. Benefits include free crypto airdrop, early access to mint NFTs, discounted crypto prices, and exclusive access to features of a new project.
During an Initial Coin Offering (ICO) event, the crypto projects may announce a whitelisting option to potential investors. The traders who want to participate in the offering can enlist themselves by submitting their KYC details or fulfilling specific criteria. The criteria can include a minimum investment, reliable trading history, or even a referral coupon.
In the context of withdrawal addresses, a whitelist refers to a list of wallet addresses considered trustworthy. These whitelisted crypto addresses can withdraw directly from the exchanges.
Likewise, NFT projects give early access to their loyal users through the whitelisting process to mint NFTs before they are open to the public. The early-bird offer mitigates any potential spikes in network fees due to heavy demand and often leads to a lower mint price than the public mint price. Moreover, selected traders may receive airdrops if they mint a high-value NFT. For instance, the Bored Ape Yacht Club members got free NFTs as rewards.
Conclusion
A whitelist in the crypto world refers to a list of approved participants with exclusive access to participate in specific events such as an initial coin offering (ICO). Benefits can range from free crypto airdrops to discounted crypto prices. Typically, traders who are active, engaging, and loyal get whitelisted.
FAQs:
How do whitelist tokens work?
For an NFT whitelisting, traders will be allotted a time slot to mint or to buy a newly minted token before it is available to the public.
What does it mean to whitelist a wallet?
Whitelisting a crypto wallet refers to a list of trustworthy wallet addresses that can withdraw directly from the exchange accounts.
What are the benefits of whitelisting?
The benefits of whitelisting depend on the event for which the whitelist is generated. Some popular benefits of whitelisting include free crypto airdrop, early access to mint NFTs, and discounted crypto prices.
What are the advantages and disadvantages of using a whitelist?
Whitelist increases security by only allowing certain addresses or transactions to be processed. Whitelists can help ensure that transactions comply with anti-money laundering (AML) and know-your-customer (KYC) laws. However, whitelists can also limit flexibility by limiting the number of addresses or transactions that can be processed. A whitelist can restrict the privacy of a user, as well as increase costs and complexity.
How do you get whitelisted on crypto?
To get whitelisted on a crypto project, research their requirements, register on their website, complete any necessary KYC verification, have your application reviewed, and await confirmation to participate.
What is a whitelist in NFT?
A whitelist in the context of NFTs is a pre-approved list of addresses or individuals who are granted certain privileges or access to specific NFTs or NFT-related activities.
What is an example of a whitelist?
An example of a whitelist in the context of NFTs would be a list of verified collectors who are given exclusive access to purchase limited edition NFTs before the general public.
What happens when you get whitelist?
When you are whitelisted, you typically gain certain privileges or benefits. In the context of NFTs, being whitelisted may grant you early access to purchase limited NFT editions, participate in exclusive drops, or access restricted features or events related to the NFT project or platform.
