Because 20 ways isn’t enough.

21 Ways to Spot a Scam in the NFT Space

TL;DR

A quick intro of how I entered the NFT space and the dangers lurking, with a list of 20 ways to spot a scam. Put together to help others in the NFT community.

What are NFTs?

Non-fungible tokens, or NFTs, are the latest cryptocurrency phenomenon to go mainstream. In the simplest terms, NFTs transform digital works of art and other collectibles into one-of-a-kind, verifiable assets that are easy to trade on the blockchain.

NFT Momentum

NFTs have been around for a few years, however, their popularity gained enormous traction in 2021 with over a 1.5 million transactions in November and a staggering $1.7 billion in sales during the last week of August.

Figure 1.5 million transactions record during November 2021 — www.nonfungible.com/market/history
Figure 2 — $1 billion in weekly sales during August 2021 — www.nonfungible.com/market/history

My introduction into the NFT space

A good friend mentioned that I should look up NFTs after I posted a picture of my daughter’s digital art on Instagram. I couldn’t believe what I was seeing. People purchasing jpegs for hundreds and thousands of dollars, millions even. That didn’t make any sense and so I fell down a rabbit hole of research. I was fascinated.

My first purchase

I made my first purchase within days of learning what an NFT was and with that entered the “metaverse”. I was the proud owner of a “FlowerGirl” a project with a roadmap and prospects that appealed to me. I paid approximately 0.1 Ethereum (~$300 at today’s rate) and at the time of writing, I still own the item and am committed long term with belief in the FlowerGirl’s vision. You can see the project information at https://www.flowergirlsnft.com as well as my beautiful FlowerGirl picture below.

Figure 3 — My FlowerGirl

Different NFT types

There is a plethora of different NFT categories, such as unique arts, music, play to earn and many others, however, I found myself leaning towards the “collections” category. This is typically where a project creates a series of randomised images, each of varying variety and value.

Earning your trust

Collection projects will typically run a Discord server months in advance of their official release date. During this time, the server moderators will provide project updates and incentives to the community to help build a large following. This is a long-drawn-out process that takes place to gain your trust and increase the chances of demand as well as your buy-in on launch day.

The overwhelming lurking dangers

Within an instant of joining my first Discord, I received a Direct Message, then another, then another, each with links that lead to dark places. Fortunately, I was savvy enough to know in an instant these were scams, but the number of scams that came at me from different places was unfathomable. Yet I joined server after serving, revelling in all the communities and promising projects. I was hooked.

I found it fascinating and thrilling, yet at the same time deliriously time consuming and cruel. The ups and down are part of any game, however, I quickly learned this game could be largely unfair.

There seems to be an underwhelming lack of safety and an overwhelming risk of being scammed. There are ample stories of innocent victims losing large amounts of money across the metaverse daily. Most of them heart breaking.

So much so that I started to record them.

I’m sharing the list below with the hope that it helps bring some awareness to darker side of the NFT space and helps protect innocent people entering this amazing new space.

Top 21 ways to spot a scam in the NFT space

Note: These were written with collections in mind, however, most of these rules can be applied across the Metaverse.

In no particular order…

1. No Discord.

All projects are the outcome of many discussions and planning hours. During those hours, a real team would identify that Discord is a top priority to help build a community in the NFT space. However, a growing community would increase the chances of outing any scam and so avoiding a community together would be one route to avoid detection. If you find a project, find their project, and check out the community. No discord is a serious red flag.

2. Airdrops.

The minting site is airdropping into celeb wallets like Gary Vee and punk holders at a rate of knots. If you’re like me and watch what the big dogs are up to, then this gives you the impression that the influencers have been given a heads up on an exciting new project. More likely is those influencers are not in early, they are targeted by the scammers and fake airdrops are sent to their public address to make you think they are minting the next big thing. Don’t be fooled.

Check out the Flipped Apes in the activity feed of one Gary Vaynerchuk, one of the most influential users in the NFT space. Those Flipped Apes are scam and trying to fool those that follow his activity.

Figure 4 — Example of unwanted malicious NFTs airdropped into an influencer wallet

3. No Whitepapers

No whitepaper or smart contract on the website/discord. Visibility and transparency are important. They provide credibility and integrity to any business not just NFTs. Even if you don’t understand them, you can ask others or use tools to help. Expect in larger communities there will be checks of these and scammers certainly wouldn’t post a dodgy contract up. Read up on being “Doxxed” too, although this is not essential it’s a decision by the creators.

4. Minting costs.

Some mints are 0.01 others are 1.0 and that’s not a concern itself, but a scam will want to find a nice amount to entice you that is affordable for many and not too high to scare you off. ~0.1 fits the bill. It’s quite expensive for a mint with little project clout and not much social, discord, etc. At this price you’d expect a few AMAs and marketing. Under ~0.1 a full discord of a few thousand is more reliable than a new 0.1 project without. Seems obvious right. Wait until that website appears offering you 0.1 mint for the next big thing and fear of missing out sets in.

5. Roadmaps.

Every project in every business has a roadmap/vision. This is their pitch deck (quote by Gary Vee). A lack of roadmap integrity is a concern. Scammers visualise your wallets not a vision of the future. Check the credibility and authenticity of their roadmap carefully and if the roadmap is not appealing for you and you don’t buy into their vision, then there is no need from you to be associated and you should walk away. Find a project you believe in.

6. FOMO.

Fear of Missing out (FOMO) is real. You arrive on a mint site and the site says the mint is already at 90%. The FOMO kicks in and you heart rate increases. This is a classic tactic to make you to ignore your gut feelings, abandon those research instincts and react quickly before you run out of time. If you find yourself tempted by ‘CryptoDogs’ on mint day but haven’t researched them, don’t ape in! Most projects have manufactured a massive interest in the project before mint day and would expect a huge demand for minting. If the mint was at 90%, the project owners would most likely use Discord and social media channels to let their community know. Never allow FOMO to force a decision.

7. Celebrity Scams.

A celebrity or influencer tweets about a new NFT project/mint. At this point they have your full attention because hey, you follow them for a reason and so it’s not uncommon to blindly follow them too, after all they are your influencer of choice, however, there have been cases where twitter accounts have been targeted by scammers as a clever way to gain your immediate trust. Don’t trust anyone, even your daily influencer, do your own research and check out the project before aping in.

Here is an example of Floyd Mayweather who told his 7.8 million users to climb aboard the Bored Bunny project, only to see the learn the entire project was a scam a few days later.

Figure 5 — Floyd Mayweather promoting the doomed Bored Bunny Project

8. Grammar and punctuation mistakes.

Perfectly written text isn’t paramount, my typing is atrocious at best of times, typos are everywhere and can be forgiven, but several typos mount up. A website full of bad grammar and lots of typos suggests a lack of care and attention from the project team. Grammar is a difficult one for the scammers because often English is not their mother tongue and the one that catches them out. Grammar is often associated with foreign countries known for hacking and scams. Bad grammar, bad vibes.

9. Fake Collabs.

The project website mentions they have agreement with owners from other successful project as a collab in big letter to grab your attention. If you check the mentioned projects and there is no mention of a collar, then chances are it doesn’t exist. Don’t be flood by the next CryptoPunks owners project, they might not have one.

Here’s an example from F!ppedpunks.com. A scam site still live at the time of writing:

Figure 6 — Example of a fake minting website with fake claims

10. Discord Vibes.

Bad vibes and a lack of community spirit is a worry for any business, and even if the community appears active, it doesn’t mean it’s healthy. A Discord channel can be set up to run via bots that communicate every few minutes to give you the impression of activity and engagement. If the chat is not ‘human’ like and engaging, then it is unlikely to be a long-term project. If you are in early and sense bots, consider an early exit too.

11. Stealth Mints.

These are called stealth mints and named to give an impression you have uncovered a hidden gem. You find it and can’t believe your luck, you’ve uncovered a mint so early and so cheap that you’d be a fool to give it up and you rationalise that it’s not on social because if it was, then it wouldn’t be a stealth mint, would it? Stealth mints are red flags. Why on earth would a stealth mint exist?

Here’s an example of a Stealth Mint scam, taken from https://scammer.info

Figure 7 — Example of a stealth mint scam

12. No Whitelist.

Well ran Discords are building a community before mint day. The is part of the game and they often offer whitelisting opportunities to encourage you to help build the brand. If a discord is proposing a mint without a whitelist phase, then likely they are avoiding the risk of being detected band outed before a mint day. Nits not a rule of thumb for all, but generally, no whitelist, no mint.

13. Low Twitter Engagement.

A new project must start somewhere, however, Twitter is full of bought bots to pretend to be people engaging but if it’s not making much sense, it’s likely to be bots, genuine engagement comes from a real community of people, who are genuinely interested in a project, which gives the project more credibility and integrity. Low engagement is a concern, be weary. Most true projects factor this in and plan marketing well to avoid low engagement.

14. Missing Twitter Followers.

Sticking with Twitter. Twitter is super connected and followers swarm like bees around genuine projects, especially those with good prospects in order to gain insights and catch their latest updates. Almost all projects arrive on Twitter well in advance of a release date and gain tremendous momentum along the way. Therefore, if you have been in the space for a while and find yourself with a minting opportunity and no one you follow, follows the projects, you should raise an eyebrow!

15. Instagram.

You found a project on Instagram, and it looks interesting. Maybe it is, but I read somewhere that 99% of Instagram projects are scams. I’ve no idea of the source or truth of that statistic, but any NFT project worth their salt will not launch on Instagram. Don’t even follow the Instagram links in the bio. The account could be a fake, who knows. Better to be safe. Research the project name in other ways and find the official links.

16. Raffles and Comps.

Raffles and comps are fine, if you only must check an emoji in discord to enter or join in a free quiz etc, but when you are asked to connect your wallet with low entry fees from unknown sources you should run a mile. Often people think there is no risk in spending a few dollars or 0.001 ETH to win a NFT with high value, but the truth is that your entry fee could cost you your entire wallet. I would never enter a raffle via a website that I don’t 100% trust and I suggest you don’t either.

17. Active Mods.

Healthy projects typically have high levels of engagement as the hype builds. A discord can only remain healthy if its managed and to be managed requires more than a few moderators. An active mod offers credibility and integrity. Nothing pleases the community more than mods stepping in to keep the peace and manage the chat. A discord without active mods suggests a lack of management and care towards the community. If the project owners don’t care about the community, they don’t care about you and if they don’t care about you, then it could well be because they won’t be around for long.

Here’s a quick example of mods actively looking after the community.

Figure 8 — Example of an active moderator engaging with the community

19. Discord Structure

Sticking with Discord, the standard is now a full set of channels to guide you through the project. You should expect welcome links, FAQ, roadmaps, collabs, right through to the international channels for other language speakers. An abnormal setup isn’t necessarily a flag, but it should be a concern. One channel for a general chat will likely create a rush of activity, but the truth is it’s a lazy setup. Channels should be set up to serve the community in a familiar way to the other successful projects. Be wary of anything that feels different than the norm, Discord included.

20. Direct Messages.

The #number1 gotchya scam! It looks like this… You receive a DM with a link to a website. The sender appears to be authentic, and you click the link. You then arrive on a website that for all intents and purposes is as professional as any other and you believe you are staring at an official website about to make a legit transaction. The reality is that by clicking the malicious link in your inbox, you unknowingly gave permission to someone else to take ownership of your wallet and all your assets.

Numerous people report they’ve been scammed by clicking links that are made to look authentic every day and all are heart breaking.

If you’re on Discord, turn DMs off right now. It’s not so easy to turn then off on other social platforms, but the advice here is to never click any links, especially from untrusted sources. Use official links only and even then, be weary. Trust no one. No one. Ever.

Here’s an example of a scam I found in my inbox when I turned my direct messages on for 3 minutes. It really didn’t take much longer for them to start pouring in.

Figure 9 — Example of a malicious direct message

21. The official marketplace.

If an NFT appears on an official marketplace then it must be official right? Wrong. As with most market leader websites these days, you find what you are looking for via a search form. Scammers know this too well and of create several clones of popular collections in the hope that you find one of their collections instead of your intended one. Only ever use official links from the official discord channel. If you do happen to find yourself on a wrong collection, you’ll most likely see the bargain of the century and proceed to a doomed purchase.

Alien Frens is a collection I follow closely, however, this is a snapshot of the results I see when searching for them directly in the official marketplace. Only 1 of those is legitimate, the others are scams.

Figure 10 — Example of malicious collections with similar names to the official collection

Summary

If you see something too good to be true… well, you know the rest! The NFT world is gaining incredible traction and as more people enter the space, the risk of malicious activity increases with it. To summarise, the four absolute essentials to prevent you from being scammed are:

  1. Only ever use official links.
  2. Switch off direct messages in Discord.
  3. Do your own research and lots of it.
  4. Never, ever, connect your wallet unless you are absolutely sure it’s legitimate.

Thanks for reading, stay safe #nftcommunity

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