Less knowledge, More Options: Where NFTs went Wrong and How?

Even though we are loaded with options when it comes to NFTs, this constant fear of getting scammed stands strong.

In the age of NFT drops, even the best-laid plans can go haywire. Bots, crashes, and scammers can dampen the launch thrill and tear apart Web3 communities, give loyal followers access to sought-after collections, and damage a brand's reputation. Last year saw the arrival of NFTs in a big way with prices soaring for digital art. The recent crypto downturn has hurt the market with volumes on exchanges such as OpenSea tumbling, and the prices of NFTs starting to falter. Two of the most important market leaders were Bored Ape Yacht Club and Cryptopunks. BAYC saw its ApeCoin token tumbling from highs of near $26 to only $5.

According to a survey by digital security company Privacy HQ, nine out of 10 respondents said they had experienced some form of scam, half had lost access to their NFTs at some point, and two-thirds had panic-sold in the past. The survey showed the majority (52.8%) of token holders use the MetaMask wallet. However, Coinbase's wallet was first in terms of total investment, with an average of $675 held on a wallet.

NFT scammers worldwide are great players of mind who know how to use artificial scarcity and fear of missing out to drive people into scamming traps. Words like "sold out", "limited releases", "Drops" and "collaboration" seem to attract people like moths to the flame and they pay high prices or even wait in long lines to buy such NFTs. Another major driving force for them is the exclusivity of their NFT artworks. Every now and then reports of stealing billions of dollars are on the news but still it cannot drown the significant hype that comes with NFTs.

Recently, another phishing scam has hit the non-fungible token (NFT) community, with the latest target being the social media accounts of NFT influencer Zeneca. The compromised Twitter and Discord accounts linked to a fake airdrop for the influencer's "Zen Academy Founders Pass," tricking unsuspecting users into connecting their wallets. The damage from the attack remains unknown. The hack is believed to be a part of a widespread threat against the NFT community, first alluded to on Monday in a tweet by the Bored Ape Yacht Club creator Yuga Labs.

Not so long ago, another similar incident happened when the Discord server of BAYC was hacked and the scammer stole about 200 ETH value of NFTs. Yuga Labs later confirmed the exploit occurred in a tweet of its own, saying it is still actively investigating the incident. It did so 11 hours after NFTHerder's tweet. This is the third time a bad actor has been able to impersonate a Yuga Labs-run account to steal users' funds. The first was April 1 when Mutant Ape Yacht Club #8662 was stolen through a phishing link posted in the project's Discord, with the second coming April 25 after Bored Ape Yacht Club Instagram and Discord accounts posted a fake link to an Otherside minting.

Even though we are loaded with options when it comes to NFTs, this constant fear of getting scammed stands strong. Therefore, it is crucial to understand the concept of NFTs and also the ways to protect ourselves during desperate times. NFTs provide buyers with access to various types of digitized assets, primarily cryptocurrencies. Owning such assets creates enough room for expansion. Simultaneously, NFT enables numerous buyers to hold a stake in a single entity. Because of the growing value of cryptocurrencies, shared ownership is critical.

Always buy your NFTs from legit sites

Hyped projects are often the victim of copycat websites to trick buyers into linking their wallets when minting. Be cautious, and never click on random links unless you can verify their source. The safest bet is to check a project's official social media, OpenSea, or Discord account and be directed to its verified website. (Beware, however: hackers have become creative in impersonating fake verified accounts on social media).

Jump into a Discord channel

This is where all the action is. Discord is the hub for the NFT community — an interactive space that provides helpful information while allowing members to participate in in-depth conversation. Here you can access basic tips about trading and investment. But, beware of fake Discord channels and messages. The official project Discord can be found on the website or the project's Twitter page.

Beware of Email Phishing Scams

If you store your private key in a folder on your computer or mobile device, you could be prone to email phishing scams. Hackers send you attractive links through ads that seem very harmless. Through these links, they target the most obvious places where users might have stored their private keys unprotected.

To protect your NFTs and other crypto assets, make it a thumb rule to never store your private key or seed phrase on your devices.