If you’re familiar with the sneaker industry, then you probably have seen fake sneakers. And just like every other industry, the NFT market is full of scam attempts. That’s why we’re gonna go through the different types of NFT scams today. Not only that, but we’ll also check out how to avoid them and make sure your money stays where it belongs! But before we dive into the technical talk, make sure you’re familiar with the most common NFT terms. If you already know your NFT ABC, let’s get right into it!
What Are NFT Scams?
Sadly, there isn’t a law that dictates what is legal and what isn’t yet. However, some things are very shady and we can’t really ignore them. So here are the most common NFT scams out there!
It’s like fishing but with “ph”. It’s not really a new scam, but with the rise of NFTs, it came back strong! The scammers will send legit-looking ads, emails, or popups that will take people to fake sites. Naturally, you wouldn’t question a site you’re familiar with asking you for your private info/wallet keys. Once they have these details, it’s easy to steal everything in your wallet! And unless a person has a very keen eye for details, they might fall victim to phishing. One of the latest phishing scams happened in February 2022 on OpenSea. You can read all about it here.
Remember when we discussed NFT Airdrops? Bounty airdrops were the type where you have to do promotional work to earn a free NFT. However, some of these airdrops turn out to be NFT scams in disguise. When you do the work, they’ll ask for your credentials, access your wallet and steal everything in it.
Imagine this: You’re trying to resell an NFT that you own, and you’re doing it via auction. Somebody will eventually outbid everyone. However, before it’s pay-time, the scammer who outbid everyone changes the cryptocurrency! For example, if the currency was Ethereum, they’ll change it to Solana, which is worth much less than ETH. That way, they’ll buy the NFT for a much lower value than its actual worth! And believe it or not, this is one of the most popular NFT scams!
Pump and Dump
This one’s pretty interesting, and the name kinda gives it away. So in the case of pump and dump, the scammers will “buy” NFTs in mass. That gives the illusion that demand is high and will naturally drive the prices of the NFTs up. But that’s not where the scam ends. The scammers will go on and sell the NFTs for a lot of money, make money, and dip!
Scammers in this case will simply copy or steal NFTs and sell them on legit marketplaces. Because lines are still blurry in terms of rules and laws, scammers are taking the liberty of stealing artworks. However, when you buy a fake NFT, it won’t have any value, nor will you be able to flip it.
We already cover the concept extensively here. But long story short, a rug pull looks like a legit NFT project, until it isn’t after minting. Right after minting, the creators, aka scammers, will just disappear with all the profits they made.
How to Avoid NFT Scams?
Sometimes, falling victim to NFT scams is inevitable. However, we’re here to give you a few tips that can come in handy and possibly save you!
- Always keep your keys private, and store them somewhere safe (nope, not your phone). Maybe a notebook or a note tucked somewhere safe. Here are some tips to keep your keys safe!
- Research the NFT seller/creator. An undoxxed team is a red flag in most cases, but there are always exceptions. Anyway, if you research the creators, you can usually find out if they’re legit or not. And always check for people’s reviews on different platforms.
- Don’t click on suspicious links. That goes without saying, but things happen to the best of us. So make sure you check the link and compare it to the legit site’s link because sometimes one letter makes the difference.
- Review NFT transaction history. NFTs with no transaction history or only one day’s worth of it is a no-no!
- Watch the bids. That way you’ll minimize the chances of scammer blindsiding you and changing the currency.
- Cross-check NFT prices. If the price sounds too good to be true, it probably is!
- Use trustworthy NFT markets like Opensea, Rarible, Mintable, and so on. You can check the best NFT marketplaces right here!
Know Your Projects Before You Spend Money
Now that we went down the whole NFT scams drill, you’re ready to face the world! However, always make sure you have a safety net in a secure industry like the sneaker industry. If you get the right sneaker bot for you like NSB, you’ll manage to break your way into sneaker reselling! But if you’re not familiar with the botting game, make sure you read this guide first. Godspeed