The most practical and easy ways to avoid scams in the NFT space
If you have ever gone through our tutorials or have some knowledge about blockchain, you will realize that the profits from NFT and crypto are huge while the way to do it is not easy. This has led to the profiteering mentality of the scammers. Instead of spending a lot of time researching, practicing, and seizing opportunities, they just want to use tricks to ‘hit’ gullible people and take their money.
Of course, we don't mean that you are easily fooled, but the truth is that the topic of scams on NFT is as much talked about as the profits. Scammers are also getting more sophisticated. So we have tried to give some practical and useful ways to keep you away from this risk.
Turn off your Discord DMs
As mentioned many times, Discord is a very popular platform among NFT circles. Similarly, Discord hacks are one of the most common NFT scams out there. They happen when hackers gain administrator-level access to a Discord server and post a fake minting link in the announcements channel.
The message will usually look like it’s coming from a project organizer and offer a deal that seems too good to be true — something like, “Due to demand, we’re releasing 1,000 more NFTs.” Often, hackers will intentionally seek out sold-out collections, because of the ability to create demand. However, in fact, most projects will put all official links in a separate, designated channel and won’t let minting happen via “sketchy looking URLs” — just on the project’s primary website.
Therefore, we suggest that everyone should turn off the direct-messaging function on Discord. Project teams will never DM you first. It’s best practice to assume everyone is a scammer until proven otherwise.
Keep your private keys private
A fake Discord link will almost certainly ask for Ethereum (ETH) tokens to create a new NFT that never materializes because the perpetrator flees with the money — but an even bigger problem arises if said perp requests the victim's seed phrase, which is a series of confidential words used to gain access to a crypto wallet. People will rush to mint the false collection due to FOMO, and in many cases, they will lose not only their ETH but also their tokens and NFTs.
Phishing may occur through Twitter conversations and emails in addition to Discord. Hardware wallets – USB-sized, physical devices that plug into PCs — are available for purchase. A hardware wallet eliminates the need to enter [seed phrases] into a browser.
Beware the airdrops
Malicious code may also be included in airdrops. Tokens are constantly being airdropped into your online wallet at random. They want you to think, 'Oh, look, I received some free tokens.' 'Please allow me to go to this website and attempt to sell them.' Because everything is programable, they make these tokens unsellable. It effectively binds you to anything and compels you to give them access to your cash, after which they take it. Anyone may transmit tokens to anyone at any time: the wallet holder, like an inbox owner receiving an email, is not required to authorize or accept a transfer. The best course of action is to just ignore it.
Mind the rugs
Fake or half-baked collections have become a major issue. A "rugpull" occurs when a person or group of people positions a preliminary set of basic NFTs as the start of a larger project that will unfold over time — possibly with a video-game component, merch, and/or in-person events — and then runs off with the millions of dollars raised before any of the promised steps can take place. If the developers' main guarantee is an NFT that can then unlock further benefits, later on, they're probably not accountable if the sheeple lose money. Constantinou exclusively supports initiatives that have web hubs that are jam-packed with skillfully presented content. Big collections with a lot of promise don't come together in a flash. If a project seems to have been thrown together in a day... and the website is clunky, there's always the chance that it's merely a hasty cash grab.
Question everything — and everyone
Ragzy, a visual artist who debuted her first NFT series last year and has since become a collector, says that she always looks for a “fully doxxed team” — one made up of reputable figures who’ve openly identified themselves — before she gets involved in any project.” Undoxxed teams, she says, “get away with it because nobody knows who to hold accountable.”
Ragzy further points out that social media statistics don't always signify much if the product has no obvious value. "Communities form around a shared goal, and if that goal is to acquire the NFT and flip it, that's not really a community," she argues. Of course, followers and celebrity endorsements may be purchased. "You'll see a lot of celebrities being asked to support not only NFTs, but other cryptocurrencies, and they won't know what it is." This isn't their fault. They're looking at it as if it's a paid advertisement. Even if they're promoting it as if they're a part of the effort, it doesn't have any weight with me. Just because a celebrity promotes or produces a project does not guarantee its success.”
Finally, be prepared to lose it all
Entering this relatively unexplored terrain exposes you to the danger of being scammed. People should consider their engagement to be a type of investment. In many respects, this method is secure, but you can't stop someone from attempting to con you. We're in that early development period because this is a fully open system with no protections in place - by design. It is not yet completely professionalized. It can't be completely trusted... Individuals with nefarious intentions will just take advantage of the less knowledgeable. It's terribly sad, but you have to accept it to some degree.