Escrow & Funding Options
Different ways to provide your collectors to slowly release their payments after minting the NFTs.
Using funding options project creators can allow a slow release of payments to establish trust with their collector.
In a simple example, escrow can release 20% of each payment immediately after the mint, and then 80% over next 90 days, towards project owners.
No one (including Flair, or project creators) can withdraw the payments during this time, which gives collectors peace of mind. During the release collectors can return their NFTs and receive the remainder of the payment if project is not delivering on their promises.
Funding Options are useful for various use-cases, including but not limited to:
- Fundraising for Artists, for their newly minted NFT drops and collections. This helps artists bootstrap their venture in NFT space, or kickstart a new promising project, such as pre-order a new music album, or an inspiring art collection.
- Pre-order NFT drops, for an upcoming NFT collection. This helps creators to raise money for their project and give buyers a safe experience via various Flair escrow & funding options.
- Escrow for a new NFT collection, whether you're creating next generative art collection or building next blockchain-based game, you can give your NFT collectors escrow for their payments.
When creating your fundraising or pre-order campaign you have multiple tools at your disposal to give the best purchase and investment experience for your NFT buyers. Below are the list of options and an explanation of how they work.
Most of the options control "when" and "how much" of your buyers' payments get released.
You can define a portion of the buyer's payment to be instantly settled for you. For example, you can set 20% of the payment to be instantly released for you. This upfront payment allows you to kickstart with some capital as the project owner.
A period during which no payment is released to give collectors peace of mind that you're fully committed to the project and aim to make it successful in the long run. For example, you can define that for 15 days no payment will be released.
After cliff period is finished you can define a portion of the payment to be released. For example, after 15 days of cliff period, you would need 10% of the payment to be released.
This is a period where the payment is gradually and steadily releasing for you every hour. For example, you can define 90 days for the rest of the payment to be released gradually. This gives your buyers ability to basically support your progress as your project grows as promised (new minted NFTs, increased price floor, new utilities added, etc.).
When payments are released as per funding options, you're able to withdraw the released amount. Upfront payment is released immediately which you can claim right after your launch. Rest of the payments are released hourly, which means every hour, you can withdraw released payments. You can of course wait until full payment is released and do one withdrawal for all of it.
For a successful campaign using escrow, you need to find the right balance of accountability vs available cash, for both you as the creator and your collectors.
We recommend following funding options, for the majority of collections:
- Upfront Payment of 10-20%: This allows you to kickstart and have enough initial funds to start delivering your first milestone.
- Cliff Period of 15 days: This gives collectors a very strong safety measure in terms of seeing how your team communicates and organizes the promised milestones shortly after the launch.
- Cliff Payment of 15%: This is the second boost after you have managed to keep up to the plans in the first 2 weeks after the launch.
- Vesting Period of >90 days: This is the strongest signal to your community of collectors that you are going to deliver on the roadmap and these 90 days (or more) gives collectors enough time to evaluate.