Many NFT projects lack sufficient smart contract testing, says unnamed entrepreneur

Jimmy McNelis, the founder of Web3 technology firm Nameless, says there are too many nonfungible token (NFT) projects rushing to market without proper smart contract testing – potentially leading to lost millions.

Speaking to Cointelegraph, McNelis suggested that many NFT projects often rush to market without simulating how their smart contracts will work, in some cases even skipping extensive revisions.

McNelis said an example of this was observed during the sale of Akutar’s NFT collection in February 2021 – with 15,000 tokens put up for sale on the Winklevoss-owned NFT marketplace Nifty Gateway.

McNelis said that while the NFT release was sold out, a major error saw $33 million worth of Ether (ETH) generated from the sale locked up in a smart contract that developers don’t have access to, explaining:

“It was the kind of thing they could have tested more fully in a private test environment and run the tests against the sell and edge cases, which they might have taken the time to do or thought about doing on a public test network.”

McNelis emphasized the importance of getting the testing phase right, given that smart contract bugs cannot be patched after launch:

“The testing phase of a project is extremely critical because it’s going to really determine the success of release or launch in terms of technical solutions and market solutions.”

McNelis explained that while projects can use public testnets to conduct trials for networks like Ethereum, many do not, as it can open the door to copycat scam projects. He also says that some do not want to test in public environments due to a lack of confidentiality.

“The other thing is that there are a lot of brands that might want to explore the Web3 space but aren’t ready to publicly announce that they’re doing it.”

Related: NFT’s ‘biggest ramp’ to crypto in Central, South Asia and Oceania – report

Nameless was founded by McNelis in mid-2021, and the project has so far received support from, among others, popular entrepreneur and NFT proponent Gary Vaynerchuck.

It is preparing for a new product launch later this month with an NFT software called StealthTest, which provides private test networks for developers to try out smart contracts for Ethereum, IPFS and Arweave.

Commenting on the NFT market, McNelis expects that large companies will continue to pile into the space with their own tokenized products, and that interest in organic retail will continue to increase.

He noted that when it comes to investments, it is still too early for the big financial companies to want to speculate in NFT themselves.

“I think institutions will still be primarily focused on producing such things. But some of the braver ones may speculate in some NFTs, but I don’t think NFTs are mature enough yet and the markets are mature enough to make safe long-term investments, he said.