Open vs Closed

When launching a project on Cardano, one of the first decisions you'll face is whether to implement an open or closed minting policy. This choice impacts how your tokens or NFTs are managed over time, influencing everything from market dynamics to community perception. Understanding the tradeoffs between open and closed policies will help you align your project goals with the right technical foundation.

Choosing a closed policy might be seen as a definitive statement about your project - it establishes something that cannot be altered once the policy closes. But, it also means that once the policy closes, no corrections, additions, or pivots in the project direction are possible (at least not without creating a new policy for the project - something that creates its own complications). Conversely, an open policy offers considerable flexibility, allowing you to evolve your project over time. This can be particularly desirable in projects where future phases or elements might be anticipated but not fully planned out at inception.

Key Differences

• Supply: Closed policies guarantee a fixed supply, while open policies allow for ongoing minting and burning.

• Flexibility: Open policies give you the freedom to evolve a project, while closed policies lock in its structure.

• Rarity: Traditionally, closed policies offer maximum scarcity, but open policies can introduce new forms of value and utility.

When to Choose Open

Consider an open policy if you envision:

• Expanding a collection over time with new releases or content drops.

• Allowing assets to evolve through gameplay, rewards, or other mechanisms.

• Adapting your NFT project based on community feedback and participation.

• Exploring subscription services or recurring content tied to token ownership.

When to Choose Closed

A closed policy may be the right fit if:

• You want to guarantee a fixed supply for collectors seeking limited editions.

• You have a very specific vision for the collection's size and scope.

• You want to avoid ongoing management decisions about minting/burning.

Additional Considerations

• Some NFT genres have established norms. For example highly limited art drops often use closed policies.

• A closed policy can be a good fit for a one-time event commemoration or a tightly controlled, single-themed release.

• Even with an open policy, responsible minting and innovative utility can sustain the value of individual NFTs.

Conclusion

Whichever policy you choose, transparent communication about your plans is essential for building trust with your audience.

The decision between an open and closed policy often boils down to your vision for the project’s lifecycle and how you intend to interact (or not) with your community. You may even want to consider a combination of approaches for your project overall (e.g., a limited closed-policy series within a larger open-policy project).

Both open and closed policies have benefits depending on the nature of the project. For collections meant to be finite and collectible, a closed policy reinforces their exclusivity. For evolving projects that grow with their community, an open policy offers the flexibility needed to adapt and flourish. Choosing the right policy involves a deep understanding of your project's long-term goals and how you wish to engage with your audience over its lifecycle.

Ultimately, the best policy supports your artistic goals, desired market dynamics, and intended community interaction.