So, the world of non-fungible tokens is scary as it is exciting. This is because there are absolutely no rules, laws, or regulations that currently govern the virtual world. Although everything is basically out in the open on blockchains, you can still easily fall victim to NFT scams!
Therefore, to avoid doing just that, you have to keep your eyes wide open for signs of potential scamming! The people of the NFT industry have named them NFT rug pulls – very fitting. This is because these types of scams often happen out of the blue. Like actually having a rug pulled out from under your feet! But, an ETH-worth NFT scam is something that is not easy to digest. So, here’s what you need to look out for!
Also, if you wanna learn more about knowing WHICH NFT project to buy, click on the button below. We’ve got all the telltale signs of a good NFT project you should look out for!
What are NFT scams?
NFT scams or NFT rug pulls are scams where a team of an NFT project starts promoting and selling their work. And then, they disappear off the face of the Earth taking all the money with them. Of course, the money of the people who invested in the project – aka your money.
But, are NFT scams technically illegal? Well, not much really. Therefore, if you fall victim to a rug pull, there’s really nothing you can do about it. So, here’s how to avoid it altogether!
8 SIGNS OF NFT SCAMS
(1) Anonymous Teams
An anonymous – aka undoxxed – team is usually one of the first things you should look out for in NFT scams. Anonymous or undoxxed means when you can not find the project’s team online or on social media. Although it isn’t necessary that the ENTIRE team be doxxed, at least 50% of the team should be findable.
Doxxed teams help you understand who’s behind the project and their credentials. Do they have a good reputation? Are they good at what they do? Can you trust them?
When you know the person behind the project, you can be more at ease. People are less likely to scam you if you know who they are and can reach them!
(2) Social Media Following
Next, we’ve got one of the most important signs of NFT scams – social media following. These days, it’s all about building trust through social media platforms. So, it only makes sense to invest in projects with older, established Twitter accounts; right?
Well, not exactly. Nowadays, it’s actually pretty easy to buy old, established Twitter accounts and even buy followers. Twitter bots can do wonders if you wanna fake engagement and follower count on your account.
Therefore, if you have doubt about a potential scam, run the Twitter account through audit sites for fake followers.
** Also, you should note that celebrity endorsements do not account for a safe NFT project. At the end of the day, celebrities are getting paid to endorse all kinds of projects. So, even if there’s an A-lister supporting this project, do more research!
(3) Mint Prices
More signs of NFT scams include mint prices – free mints or overpriced mints alike. NFT minting naturally costs cryptocurrency. If the project comes with free minting, it could be a half-assed project with minimal effort. If it’s too expensive, you have to wonder if it’s worth it, to begin with.
In short, when it comes to minting prices, it all comes down to logic, research, and experience. There’s this unspoken agreement on what mint prices should be, and most projects start around 0.25 ETH. You can check the mint prices of other successful and super hyped projects for comparison.
Next, we’ve got the NFT roadmap. When a project lacks a clear and concise NFT roadmap, it is definitely a sign of NFT scams. It isn’t necessarily a deal-breaker, but, when a project goes the extra mile and presents its goals and promises to people, it feels more legit.
Also, if you see that the project is making good time and reaching milestones, you’ll have more trust. It also has to be a logical roadmap with achievable goals. If it seems overhyped and grandiose, it probably is!
(5) Limited Art
Also, limited art is another sign of possible NFT scams. Consistency is actually an important factor in legit NFT projects. So, if a project doesn’t seem well-established or looks very random; it’s going to seem suspicious. In other words, a consistent art profile with a good portfolio is very important!
They have to have a wide variety of art projects following a certain concept that makes it unique. The effort has to show through the art! Otherwise, it defies the entire purpose of NFTs!
(6) Community Management
Community management can also be a red flag hinting at NFT scams. A successful project puts effort, time, and energy into fostering a real sense of community and belonging. When the project has a certain concept, they bring it to life through their community morals.
So, when projects claim they’re trying to build a community, but their actions don’t focus on that; it’s sus! In other words, this is where actions speak louder than words. The community has to feel safe, welcoming, well-managed, and friendly.
Finally, the last sign to look out for NFT scams or NFT rug pulls is the innovation behind the project. NFTs are supposed to be unique, different, and one-of-a-kind. Or else, it’s not really an NFT, is it?
Therefore, if you’re getting any deja vu vibes from a project, it’s probably plagiarized. And although there aren’t direct consequences for NFT plagiarism at the moment, it’s suspicious. The project probably won’t have a long lifespan and you might lose it all!
In the end, the moral of the story here is that always do your research and trust your gut!