Jimmy McNelis, founder of anonymous tech company Web3, says there are too many NFT projects rushing to market without proper smart contracts testing — potentially losing millions.
Speaking with Cointelegraph, McNelis suggested that a lot of NFT projects often rush to market without fully simulating how their smart contracts work, even skipping extensive audits in some cases.
McNelis said an example of this was observed during the February 2021 sale of the Akutars NFT pool — which includes 15,000 tokens that were put up for sale on the Winklevoss-owned NFT marketplace.
McNelis said that while the NFT was being sold, a massive $33 million worth of Ether (ETH) was created from the sale locked into a smart contract inaccessible to developers, explaining:
“This was the kind of thing that they could fully test in a private test environment and test against those sales and edge cases, which they might have spent time or not thought of doing on a public testnet.”
McNelis emphasized the importance of getting the testing phase right, given that it is not possible to debug smart contract errors after launch:
“The project testing phase is critical because it will really determine the success of the projection or launch in terms of technical and market solutions.”
McNelis explained that while projects can use public testnets to run trials for networks like Ethereum, many don’t because it could open the door to scams. He also says that some do not want to experience in public environments lack of secrecy.
“The other thing is that there are a lot of brands out there that might want to explore the Web3 space but aren’t willing to publicly announce that they are doing so.”
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Nameless was founded by McNelis in mid-2021, and so far the project has received support from famed 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 test networks for developers to experiment with smart contracts for Ethereum, IPFS, and Arweave.
Commenting on the NFT market, McNelis anticipates that big-name companies will continue to be in the space with their own token products, and that interest in organic retail 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 of the bravest people might speculate on some form of NFT, but I don’t think NFTs are mature enough yet and markets are mature enough yet to make safe long-term investments,” he said.