Jimmy McNelis, founder of the anonymous Web3 technology firm, says there are too many NFT projects being rushed to market without proper contract testing – potentially resulting in millions lost.
Speaking to Cointelegraph, McNelis noted that many NFT projects are often rushed to market without a full understanding of how the smart contracts will work, even skipping extensive audits in some cases.
An example of this was seen when McNelis sold Acutar’s NFT inventory in February 2021 – featuring 15,000 tokens for sale on Winklevoss-owned NFT marketplace Nifty Gateway.
McNelis explained that a major mistake during the NFT crash sale was that $33 million worth of Ether (ETH) from the sale was locked away in a smart contract that the devs couldn’t access.
It was something that you could test more fully in a private test environment and run the tests on those sales and edge cases, which you may or may not have taken the time to do on a public testnet. He said.
McNelis emphasized the importance of getting the testing phase right so that smart contract errors can’t stick after launch.
“The pilot phase of the project is extremely critical because it will really determine the success of your launch or failure as far as technical and marketplace solutions go.”
McNelis explained that while projects can use public testnets to conduct experiments for networks like Ethereum, many don’t because it can open the door to copycat projects. He also said that some people don’t want to be tested in public areas because of the lack of privacy.
“The other thing is that there are a lot of brands that want to explore the Web3 space, but they’re not ready to publicly announce that they’re going to do so.”
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Anonymous was founded by McNelis in mid-2021, and the project has so far received support from prominent entrepreneur and NFT proponent Gary Vaynerchuk, among others.
Later this month, devs are gearing up for a new product with NFT software called StealthTest, which will provide a private testnet to test ATR, IPFS, and ARwave smart contracts.
Commenting on the NFT market, McNelis expects big-name companies to continue piling into the space with their own tokenized products and organic retail interest to continue to increase.
As for investments, he noted that it is still too early for large financial firms to speculate about NFTs themselves.
I think institutions are still mainly focused on producing such things. But some bold people may speculate on some NFTs, but I don’t think NFTs are mature yet and the markets are still big enough to make safe long-term investments,” he said.