Jimmy McNelis, the founder of unnamed tech company Web3, says there are too many NFT projects hitting the market without proper smart contract proofs, potentially leading to the loss of millions.
Speaking to Cointelegraph, McNelis suggested that many NFT projects are often rushed to market without fully simulating how their smart contracts will work, even skipping thorough audits in some cases.
McNelis said an example of this was seen during the Akutars NFT Collection sale in February 2021, with 15,000 tokens being put up for sale on the Winklevoss-owned Nifty Gateway NFT marketplace.
McNelis said that while the NFT was sold out, a major glitch saw $33 million worth of Ether (ETH) generated from the closed sale in a smart contract that developers don’t have access to. access, and explained:
“This was the kind of thing that they could have tested more fully in a private test environment and run the tests with those sales and benefits cases, which they may or may not have taken the time to do or think about doing in a public test network.”
McNelis emphasized the importance of getting the testing phase right, given that smart contract bugs cannot be fixed after launch:
“The testing phase of a project is extremely critical because it will really determine the success of your rollout or launch in terms of technical and market solutions.”
McNelis explained that while projects can use public testnets to conduct tests for networks like Ethereum, many don’t, as it could open the door to copycat scam projects. He also says that some don’t want to experience the lack of confidentiality in public settings.
“The other thing is that there are a lot of brands that may want to explore the Web3 space, but aren’t ready to publicly announce that they’re doing it.”
Related: NFTs are ‘biggest on-ramp’ to crypto in Central, South and Oceania – report
Nameless was founded by McNelis in mid-2021, and so far the project has received support from popular entrepreneur and NFT advocate Gary Vaynerchuck, among others.
It is gearing up for a new product launch later this month with NFT software called StealthTest, which provides private testnets for developers to test smart contracts for Ethereum, IPFS, and Arweave.
Commenting on the NFT market, McNelis expects that big-name companies will continue to pile into the space with their own tokenized products and that organic selling interest will continue to increase.
He noted that in terms of investments, it is still too early for large financial firms to want to speculate on NFTs.
“I think institutions will still mainly focus on producing things like this. But some of the braver ones can speculate on some NFTs, 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.