5 ways to clean your collection
Everyone has an NFT or two that they regret keeping. This is simply the nature of the NFT ecosystem. Sometimes floor prices drop, and collectors are left with few options. Or maybe a creator is found to be a fraud, leaving those who bought their IP in limbo. Or worse, maybe one unsolicited NFT was airdropped into a user’s wallet without consent.
Whatever the case, these unwanted NFTs can exist as a hindrance, a shameful reminder of the unpleasant parts of the NFT space that enthusiasts often prefer to keep hidden. But sending them to rogue wallets or using marketplace features to hide them from the public is just a Band-Aid fix. Surely there are better ways for collectors to dispose of unwanted NFTs.
Fortunately for degens, there is. And we’re not just talking about burning (destroying) them. No, instead, various platforms now offer holders unique rewards for dumping their NFTs.
Get rid of NFTs for tax purposes
So you want to get rid of some NFTs. Do not worry; we don’t want to ask why, just know you’re not alone. There are a number of reasons why a collector might want to make an NFT disappear, with one of the most popular undoubtedly being to reap tax losses.
In traditional tax loss harvesting, an investor will sell an underperforming asset at a loss, then use the loss to reduce their taxable capital gains, offsetting the gains they have made on other investments. This can also be done with NFTs and is a significantly popular way of reducing tax on digital collectibles.
Of course, there are all sorts of considerations to make around NFTs and taxes. This includes charitable giving, which you can read about in our full guide on the subject. But for those who want to simply relieve and compensate, there are a few services to choose from.
NFT Loss Harvestooor
NFT Loss Harvestooor is a free service created by popular crypto tax software company CoinLedger. Essentially, Harvestooor is a simple Ethereum smart contract that allows users to sell an NFT and receive a significantly small amount of ETH (0.00000001) in return. By doing so, traders can realize capital losses on NFTs and lower their taxable income.
Also, while Harvestooor works well for collections that are still tradable, the makers of the service have teased a potential new service that would allow traders to dispose of even their “illiquid, worthless, carpet-swept” NFTs in the future.
Untradeable NFTs
Untradeable NFTs are another solid option for traders looking to reap NFT losses. The platform works quite similarly to Loss Harvestooor, but comes with the added functionality of being able to claim losses of hundreds of NFTs at a time (up to 1000). Users can expect to receive around 0.000007 ETH for each NFT, paying only transaction fees (up to 0.08 ETH max) in the process.
Considering that platforms like Blur have consumed a significant amount of NFT market share in recent months – exemplifying the avid NFT trader’s affinity for no-fee, high-volume trading – it makes sense that Unsellable has become a popular tax loss harvesting service due to their high batch sizes.
Other ways to get rid of an NFT
Maybe it’s not saving money you’re worried about, but rather saving face to get rid of your terrible NFTs. Well, there are alternatives that can be just as rewarding.
The garbage dump
The Junkyard is a service somewhat parallel to tax loss harvesting that allows users to both dump NFTs and win NFTs that have been dumped. By “dumping” an NFT in The Junkyard, a user will earn not ETH, but Junkcoin, a platform-based currency. That currency can then be used to “fish” for NFTs that have been dumped by others.
To date, a wide variety of blue-chip NFTs have been routed through The Junkyard, including pieces from Clone X, Doodles, Otherside, Cool Cats and more.
Although the ecosystem could used for tax losses, The Junkyard is more of a gamified trading experience. The platform also hosts a number of secondary and tertiary features under development, such as free NFT collections, member-based experiences, token staking and more.
Liquidity pool
Chances are that there are other collectors out there who hold onto a piece from the same collection as you, and who also want to free themselves from their unsatisfactory NFT. So why not try a liquidity pool? With services like NFT20, a user can deposit any NFT into an available pool or create a pool themselves (probably a necessity to collect junk NFTs) and receive platform-based tokens in return.
Yes, this can be an unconventional way to “get rid” of an NFT, considering that liquidity pools are more often used to frolic trading and collector rewards. But it beats trying to hide a crap NFT forever – even if it means losing out on profitability in return.
Plaster corrections
If all else fails, even after considering or even attempting the options listed above, you can always resort to the tried and tested patch fixes mentioned.
First, you can use the “hide” feature offered by OpenSea and other NFT marketplaces. These features are usually built directly into the interface of a marketplace and often only require a user to select which NFTs they want to hide, and then send and confirm a transaction to hide them.
On the other hand, you can just choose to send a nasty NFT to the universal Ethereum burn address. Doing so is as easy as it seems. Simply select a token either in your wallet or marketplace profile, initiate a transfer and send it to the 0x address associated with burning (0x00…deaD).
Of course, this specific burning option only works with Ethereum-based NFTs. Tezos and Solana-based NFTs must be burned through other methods.
Take the shame out of throwing
So you are holding a junk NFT. So what? There are countless other collectors out there who are still around possession of Bloot or some other form of unpleasant derivatives. The fact is, you don’t need to HODL for “historical significance” or for any other excuse.
It’s okay to let go. Better yet, why not use your unwanted NFT to reap a loss, try a gamified experience, or even meet others in the same boat as you? After all, the community is the most important part of the NFT space, right?
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