Protect Yourself from These NFT Scams and Traps

The first blockchain to produce a Non-Fungible Token was supposed to be Namecoin, where Kevin McCoy, a digital artist, minted "Quantum" in May 2014 according to zenofineart.com. This paved the way to the ever-growing market of NFTs and various other utilities pertaining to NFTs.

NFTs are now every here and there on almost any blockchain we can name. The invention of NFT in the blockchain world has created so many new markets as the demand keeps growing day by day.

There are primary and secondary markets for investors to trade or invest in NFTs. Artists can sell their artwork in the form of digital art by minting on both centralized and decentralized platforms. We have now NFT-based games, where players buy NFT assets to use in the game or put in staking for earning yields.

But, this growth has brought some challenges for the NFT market and the threat of scams for artists and buyers. Scammers are blatantly defrauding innocent users and tricking them to take control of their assets.

Let's talk about some popular traps used by scammers and how to protect yourself from such frauds.

Social Media Giveaway Trick

This is one of the famous traps used by scammers to lure users to fall into their traps. The scam actors announce a distribution of free NFTs to potential winners, and they ask you to follow their social media account, share it with your friends, and also provide your wallet address. Once there are some winners they distribute a form to be filled by the winners, where they ask them to insert security-related information regarding their wallets such as private keys and secret phrases, once the scammers collect the winners' wallet information, they gain access to their assets and transfer them to their wallets. These actors keep changing their identities and remove their social media accounts once they achieved their fraudulent goals.

Prevention: The most effective prevention is to ignore such giveaways and never try to participate. Even if the social media account seems verified, it does not mean it can't scam you.

Fake NFT Project Website

This type of trap instantly drains your wallet in a very professional way and makes your wallet compromised forever. The scammers create an NFT minting website, then they promote the project through various social media channels and Telegram, when someone visits the project's website, his crypto wallet pops up and asks for the 'sign-in' permission, the user approves it and finds an NFT ready to be minted, but the user does not know what permissions he has granted to the contract address he is interacting with, within few minutes or even seconds of signing in, his funds start to transfer to an unknown blockchain address, his wallet is wiped out instantly.

Prevention: Never use your crypto wallet on every website just for the sake of seeking information or any other purpose, always read the sign-in or approval message, if the message asks for unlimited wallet access, step away and never approve, read the approval message sometimes it has code you can't understand what it asks for, simply deny the permission. Do solid research by interacting with their discord, ask for contract addresses, and read feedback on address explorer websites regarding the contract address, affected people often leave their feedback in explorer's comments section.

Replicated NFTs and Projects:
A non-fungible token is a blockchain contract address of a digital asset which is done through the process of minting it on an associated blockchain service provider. Anyone can replicate an NFT image, video, or any other format by downloading it and again uploading it to the minting service provider's website for the creation of a new contract address.

Scammers usually copy the original work from an NFT and again mint it with a new contract address, then put it in a decentralized NFT market such as OpenSea, AtomicHub, etc. with a hefty price tag and present it as an original artwork NFT, a potential investor purchases it and later finds out that it is a counterfeit NFT and possess no real value in the market.

Prevention: This type of trap is hard to discover, since you can't find any difference between real and replicated artwork. But, always try to research as much as you can, look for the seller's transaction history on the address explorer, check if the account selling NFTs is verified and whitelisted by the exchange, also visit the NFT issuer website and check the NFT hash/contract address is associated with it, you can also verify an asset by its immutable attributes where you may find issuers signature and asset id.

Conclusive Remarks

NFTs have a vast market share these days in the blockchain economy, it is not easy to recognize a legit market. In fact, the key to securing your wallets is in your hands, if you do not research about an account or an NFT project, there are chances you've got trapped and consequently, you might be leaving your assets in the wrong hands.

Always perform thorough research before investing or trading any cryptocurrency and NFT. Look for the website's domain address, and check whether the address is a real or phishing one. Even if you have the slightest doubt about the project, keep your distance and remain happy that you did not invest.

---

Please, leave your feedback in the comment section. Thanks for reading the post.

---

^{Author: emaxisonline}

^{Image: Poster made with Canva.com and Logo taken from LeoFinance.io}

Posted Using LeoFinance ^Beta