To help make sense of this space better and avoid getting scammed, we've put together some tips that you can use.
September 27, 2023
A Quick Guide to Not Getting Scammed in the NFT Space
Don't worry if you're still unsure how to spot a crypto scam. We've all been there, amigos. We know it sounds scary and overwhelming, but we're here to help, so you don't get fooled by fraudulent projects.
Let's shed some light on how to avoid these situations.
How to spot a scam before it's too late
The bad news is we've all heard stories of people getting scammed. Collectors have lost thousands of dollars, and some investors have lost millions. The good news? You can avoid this.
Most of the time, avoiding a scam is as easy as paying attention to the red flags and following your gut. Don't panic; not everyone is trying to trick people out of their money, tho the risk is still there. Remember that you should always do proper research.
For example, you shouldn't invest a ton of money into a project simply because someone with a bigger following than you does so.
Another example: Imagine you decide to work with a developer with an anonymous identity. You seem to be okay with that at first, but would you be able to reach them in case of a problem?
Sounds pretty obvious when we say it like that, huh? Who would risk it? Well, that's a true story. That's precisely what happened to the people involved in the Evolved Apes project. They got rugpulled.
Sometimes, it's harder to be objective since everything can sound very convincing, like quick returns on investment, NFTs sold out in hours, or "once-in-a-lifetime" opportunities. On top of that, you want to be the first to join that supposedly promising project—but hold your horses. If you're new to the NFT space, PLEASE don't fall into the hype and spend your money just like that.
It's better to do your research beforehand. Confirm twice, and then take action only if you're sure about it.
These are some essential points to review before making a move:
- Community: Is there a community behind that NFT project? Who are the people involved?
- Future roadmap: Are the following actions clear and public? Have some of those actions already been applied? What are the benefits for holders?
- Project quality: What's the effort behind the project? Does it have an objective? What's the reason behind it? How did it start?
- Scarcity: How many NFTs are available?
Remember to double-check everything.
Stay updated and get involved in the community. You can always look up new resources to learn about the industry on Youtube, Twitter, or blogs just like this one. To name a few: NFT Times, Edge of NFT Podcast, Farokh Sarmad, or Beanie.
Now let's see how to avoid some common NFT scams where fraudsters will try to steal your hard-earned money.
Common NFT scams to be aware of
Scams are not new, but they're getting more sophisticated. So don't let your guard down.
1. Replica NFT websites
Whether for a marketplace like OpenSea or Rarible, or an NFT project like Hippos or Lazy Lions, scammers will try to create fake NFT websites—that look just like the legitimate ones.
A common factor in identifying these fake websites is that they tend to have NFTs at a fraction of the price you've probably seen elsewhere.
For example, let's imagine you're in the fake Rarible by accident. You're on a replica NFT store. You wrote Rairble and didn't notice that typo in the URL. Now you found an NFT you know is currently selling for 8 ETH, but you're on the website, and it's now conveniently available for 2 ETH—That's not a great deal. Alert, alert! Don't connect your wallet!
You can take some actions to prove if you're on a legitimate website. For example, the official usernames are verified with a checkmark on the original marketplaces, as they are on social media accounts. Most of these fake websites won't have that icon.
Another way to confirm if you're not about to lose all your funds is to check the minting address and compare that with the minting address of the original NFT project.
2. Impersonations on social media
Someone can pretend to be the actual creator, artist, or company behind an NFT project, and if you fall for it, the next thing that will happen is you'll be buying fake NFT art that's worth zero.
You can avoid this by looking for other social media accounts and comparing them. A differentiator can be the number of followers, the NFT price, and sometimes, even the verification icon (mentioned above).
Try to access social media links directly from the original pages, as the official website of the NFT project.
It is crucial to check everything twice before sharing any sensitive information. Remember: Impersonations are not only on social media but can pretend to be customer support in a medium like a Discord server.
These fraudulent accounts or impersonators also create giveaways, and that's what we'll review next.
3. Fake giveaways
Too good to be true? You're probably right. Do not click on any random link you receive on socials. If you're unsure about the message, but you still want to click that link (just like the red button we're always supposed to avoid), then Google it, or go straight to the original website of that artist or NFT project; and again, make the comparison between both URLs.
Don't fall for fake giveaways—or the apparently super NFT deal. Verify the account that contacted you before answering anything, connect your wallet, provide passwords, or worse. Take some minutes to confirm it is legitimate.
Pay attention to the details
You can always protect yourself from fraudsters; remember:
- Look for credibility: Who's behind the NFT project?
- Make comparisons: Is the account the same as the original on the NFT project website?
- Double-check: Is it the correct Discord server?
If you find a replica NFT store, someone pretending to be an artist, or any other case you know it's a fraud, don't hesitate and report it. That's another way to contribute to the community and protect others from becoming fraud victims.
Stay safe in the NFT space
There are some scams in the NFT space these days, so do your research before starting. Sometimes it is better to lose what seemed like a great deal than lose all your coins.
Be careful as you are in your everyday transactions. Like when you want to book a flight ticket, and you're looking for the best offer. So you take more time to compare and review what you'll get with that price. Finding an NFT is like that but triple the fun.
Drop us a line at @buenonft and let us know if you have any tricks of your own to avoid scams. We can all help protect each other with some good advice.
