In the cryptocurrency and blockchain space, it often pays to be early. This article defines the term “whitelist” and explains the various situations where you can use it to your advantage.
The term whitelist has slightly different meanings on different platforms and domains of the crypto world. In general, it’s used to describe the pre-approval of a crypto wallet address. This pre-approval process could be for a token offering, early NFT purchase, the withdrawal of funds from a centralized exchange, or access to any other exclusive crypto event.
Let’s dive into some of the common scenarios where a crypto user would need to whitelist a wallet address.
What Does It Mean to Be Whitelisted?
Before an IDO (Initial DEX offering), NFT drop, or any other exclusive crypto event, interested individuals or entities may have the opportunity to gain early access to acquiring a crypto asset by applying for the project’s whitelist.
To be whitelisted means that you have completed the steps outlined by the project’s team and your wallet address is now eligible to participate in the event at a specified time and place.
Benefits of Being Whitelisted
Whitelisting is a tool that allows teams to reward active supporters and incentivize community participation towards the growth of the project. In exchange for meeting the predetermined guidelines for eligibility, supporters are rewarded with early and guaranteed access to an exclusive offering.
This ensures that you’re getting the token or NFT before it hits the secondary market, which also means there’s a good chance you’re getting in at the lowest price possible.
If you’re not familiar with the term “IDO” and how to get early access to the tokens of innovative blockchain-based startups, then we strongly urge you to learn more about Scaleswap here.
Exchange Withdrawal Address Whitelisting
Another place you may want to whitelist an address is as a security feature on a crypto exchange. When the address whitelisting feature is disabled, a user can freely withdraw from an exchange account to any other address they would like. However, when this feature is enabled, the user can only withdraw to an address that has previously gone through the whitelisting process, which can take anywhere from 1 to 7 days depending on the exchange.
This added measure of security is highly recommended as it protects against:
- Accidental transfers of crypto to an unintended address – Crypto addresses are the only means of identification for a sender or recipient on any given blockchain network. Since they are simply a string of alphanumeric characters, it’s not uncommon for users to make a mistake when typing or pasting the address.
- Compromised accounts – Enabling the address whitelisting feature provides a bulletproof layer of security by preventing a hacker from transferring assets away from your exchange account.
How to Get Whitelisted for an IDO or NFT Launch?
Investors must usually take several steps to enter the whitelist and gain the opportunity to participate in an IDO or NFT launch. You’ll need to review the exact terms laid out by the project’s team to determine the necessary steps.
These tasks usually include user-generated content, social media support, referrals, and other actions that help create brand awareness for the project.
In addition, most IDO platforms have budget-driven selection criteria for whitelisting, requiring you to purchase a large number of platform tokens. This favors the wealthy and puts whitelisting out of reach for the average crypto user.
In the case of IDOs on Scaleswap, a loyalty-based scoring system is the primary method for whitelisting participants. With a minimal impact on buying power, this evolved form of whitelisting keeps the financial barrier low enough for anyone to participate. Be sure to read our how to get started article to learn more about the IDO whitelisting process on Scaleswap.
How to Whitelist a New Address on an Exchange
As noted above, crypto exchanges provide withdrawal address whitelisting as a security feature to protect your crypto assets. In this section, we provide a step-by-step example of how to whitelist an address on Binance Exchange.
- On the Binance home page, navigate to Profile > Security >Address Management
- Enable whitelist activation
- Complete two-factor verification (2FA)
- Go to: “Add new withdrawal address”
- Specify the coin for the withdrawal address and assign a name (or tag)
- Complete two-factor verification (2FA) again
- Confirm an activation email
- Now that you have specified the whitelist of withdrawal addresses. You can go to your account settings again and check the Address Management page.