NFTs broke into the mainstream by storm offering massive financial profits to creators and collectors alike. Now, governments, individuals, and more businesses across the globe are trying to venture and fully understand the NFT space.
Presently, the hype is much, and plenty of activities continue to take place in the NFT scene. However, many easily forget that the NFT space is an unregulated market. And as you may expect, the unregulated nature of the NFT space gives room for many fraudulent activities.
As a result, the more money flows into the NFT space, the more bad actors follow suit looking for unsuspecting traders to defraud. Presently, different types of scams are executed by these bad actors and so one needs to identify these scams to be able to avoid them.
The following are some of the most effective ways one can avoid scams in the NFT space.
Turn off your Discord DMs
One of the commonest NFT scams is Discord hacks. Most of these hacks happen when hackers can gain administrative access to a Discord server. These hackers then spam the announcement channel with various fake minting links to lure unsuspecting investors.
Usually, these fake minting links come in the form of messages from one of the project organizers. These messages often offer deals that are too good to be true, hence the need to be careful. As a rule of thumb, if a deal is too good to be true, then it’s most likely a scam.
To avoid these fake minting links, the best thing to do is to turn off your Discord DM. Ideally, most projects will always separate their official links in a designated channel, and minting mostly occurs on their main website.
Therefore a DM from a ‘project organizer’ should be treated with suspicion as it is most likely a scam.
Be careful of Rugs
Half-baked or fake collections are now a major problem in the NFT space. A lot of investors and collectors have now become victims of a ‘rugpull’ in the NFT scene. A rugpull is when a group of people or an individual pitches a preliminary collection of basic NFTs as the onset of a bigger NFT project. However, the tactic is to use the NFT collection to raise funds and then run off with it before the project is actualized.
To stay far away from rugpulls, you must always pay attention to details. For instance, if the creators are offering NFTs that would unlock extra benefits in the future, it’s most likely a scam. If the project also looks rushed and lacking such as a janky website then there’s a higher risk of it being a rugpull. As such, stay far away.
Keep your private keys private
Not for my reason should you share your private keys. It’s private for a reason right! If a project at any point asks for your seed phrase then it’s time to abandon ship. Your seed phrase Is a bunch of private words that are used to access crypto wallets.
Hence, your seed phrase in the wrong hands will have you lose your NFTs, ETH, as well as other tokens. To this end, you should never FOMO into giving your private keys (seed phrase) to a third party.
Conclusion
While common hacks can be identified and avoided, it’s important never to lose guard in the NFT space. This is because hackers are always developing new ways to defraud investors. Hence, to afloat these scams and fraudulent activities, treat every third party with suspicion until proven otherwise.
