Jimmy McNelis, Founder of Web 3.0 tech company nameless claims there are too many NFT projects rushing to market without proper testing of smart contracts, potentially resulting in millions in losses.
Speaking to Cointelegraph, McNelis suggested that many NFT projects often rush to market without fully simulating how their smart contracts will work, even skipping extensive 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 Nifty Gateway NFT marketplace owned by Winklevoss.
McNelis said that while the NFT crash wore on, a major bug saw $33 million worth of Ether (ETH) generated from the sale locked in a smart contract that developers do not have access to, explaining:
“Those were the kinds of things that they could have tested more fully in a private test environment and run the tests against those sales and edge cases, which may or may not have taken the time to do or think about doing on a testnet. public”.
McNelis underscored the importance of getting the testing phase right, as bugs in smart contracts cannot be patched after launch:
“The testing phase of a project is extremely critical, because it will really determine the success of its drop or launch in terms of technical and market solutions.”
McNelis explained that while projects can use public testnets to test networks like Ethereum, many don’t because it could open the door for copycat scam projects. He also says some don’t want to test in public settings because of a lack of confidentiality.
“The other thing is that there are a lot of brands that may be wanting to explore the Web3 space but aren’t ready to publicly announce that they’re doing it.”
Nameless was founded by McNelis in mid-2021, and the project has so far received backing 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 large companies will continue to enter the space with their own tokenized products, and that organic interest from retailers will continue to grow.
However, he noted that, in terms of investments, it is still too early for big financial companies to want to speculate on NFTs.
“I think institutions are going to continue to focus primarily on producing things like that. But some of the braver ones may speculate on some NFTs, but I don’t think NFTs are yet mature enough and markets are mature enough to make safe investments at long term”, said.
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