Jimmy McNelis, founder of anonymous tech firm Web3, says there are too many non-perishable token (NFT) projects rushing to market without proper smart contract testing — potentially losing millions.
Speaking with Cointelegraph, McNelis suggested that a lot of NFT projects often rush to market without fully emulating how their smart contracts work, in some cases skipping extensive audits.
McNelis said an example of this was seen during the sale of the Akutars NFT pool in February 2021 — which includes 15,000 tokens that were put up for sale on the Winklevoss-owned NFT marketplace.
McNelis said that while selling the NFT drop, he witnessed a massive $33 million worth of Ether gone wrong
resulting from the sale locked in a smart contract that developers do not have access to, explaining:
“It was the kind of thing that they could have fully tested in a private test environment and run the tests against those sales and edge cases, which they may or may not have spent time or thought to do on a public test network.”
McNelis emphasized the importance of getting the testing phase right, given that smart contracts cannot be debugged after launch:
“The testing phase of the project is critical because it will really determine the success of the projection or launch in terms of technical solutions and market solutions.”
McNelis explained that while projects can use public testnets to run trials of networks like Ethereum, many don’t because it could open the door to copycat scam projects. He also says some don’t want to be tested in public because of a lack of confidentiality.
“The other thing is that there are a lot of brands that might want to explore the Web3 space but aren’t ready to publicly announce that they’re doing so.”
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Nameless was founded by McNelis in mid-2021, and the project has so far received support from famous entrepreneur and NFT supporter Gary Vaynerchuck among others.
It is preparing to launch a new product later this month using NFT software called StealthTest, which provides private testnets for developers to experiment with smart contracts for Ethereum, IPFS and Arweave.
Commenting on the NFT market, McNelis expects that big-name companies will continue to be present in the space with their own token products, and organic retail interest will continue to grow.
He notes that in terms of investments, it is still too early for major financial firms to want to speculate on NFT themselves.
I think organizations will still be primarily focused on producing things like that. But some braver people might speculate on some form of NFT, but I don’t think NFTs are mature enough yet and the markets are mature enough yet to make safe long-term investments,” he said.