In this article we want to give you some tips and insights on how you can avoid losing money on NFT scams. This is a basic guide, with some easy tricks to do a first screening if something is a fake copy of another collection.
More and more NFTS are hitting the market. This is great for artists around the world, as more and more people are getting exposure for their artwork. But, sadly, this also means there are more scam projects out there. Several new fake NFT collections are created every day. How do you spot those fakes? How do you avoid investing in something to notice later it was a fraud? Read on and discover some basic checks to do before investing.
Note: If all checks in this guide seem OK, it doesn’t necessarily mean the NFTS are legit. Frauduleus projects get more and more creative and their tricks will change (and get better) over time. But this guide should give you some more firepower to avoid losing money on NFT scams.
NFT Airdrop Scams on OpenSea
If you’re a regular NFT trader on OpenSea, you’ll probably have seen that every single day random NFTS show up in your wallet. Sometimes those are stolen artworks or shameless copies of an existing collection (on OpenSea or another platform). But not always. But even if it isn’t, there is reason to be cautious.
If the NFT is something you didn’t win in any giveaway, and it was just airdropped in your wallet without you being aware of it, it’s probably already a warning sign. It doesn’t always mean it’s a fake, quite often it is not. Many collections nowadays create 1 NFT with a high supply that they airdrop into random wallets to get exposure for their collection.
Unwanted NFT Airdrops on OpenSea
Even if you get a legitimate NFT using an airdrop, the collection dropping this NFT is violating the OpenSea TOS. However the terms of service aren’t very specific on this subject, I’ve heard and seen this happen a number of times, so tread carefully!
I would not recommend investing in collections making mass drops to random people. When multiple people report the collection for unwanted airdrops, OpenSea will de-list the collection. You’ll be stuck with the NFTS, with no marketplace to sell them anymore.
Overvalued Airdrop NFTS
We’re going to use an OpenSea collection as an example below. I’ve blurred the name as it’s a fake one and I don’t want anyone to be triggered to buy fakes. More on how we can spot that those NFTS are fake, later in this article.
Even if we’d assume for a minute that this is a legit NFT. I see a lot of trading activity on this image. A lot of people are probably trading those because it’s a gif, and they consider it higher valued then a still image. I see accounts on OpenSea of people who just seem to be collecting gif images. In my opinion they’re worthless. Why? If you consider the price is $2 and there are 5.5 million copies, the total value of this 1 NFT would be 11 million dollars. It just isn’t worth that much, ever.
So even if it looks like there has been put more effort into this GIF image, don’t just buy it. Consider the amount of copies created and the price per copy before buying it. Anything outrageous (>10.000 mints for example) is just not worth what is being asked for it.
NFT Scams with No Socials
A second thing to always check is what information you can find on the collection. Many collections don’t have any information (some don’t even have a decent description). On the top right corner of the collection page on OpenSea, you can see the links the collection owner has set up. In the case below, there are no links to anywhere. No website, no socials… Strange right?
The bare minimum for a collection should be a Twitter or Instagram account that’s linked from the collection. Preferably you also see a link to a website and/or Discord. It’s also great to check on their socials how long their accounts exist for and if they have a lot of activity going on on their pages. Brand new accounts often prevail that it’s a scam. This isn’t always the case, but be cautious!
Note: One of our community members reported that social accounts of scammers can in some cases be even older then the socials of the original collection. This can be the case when their socials are renamed or if they create socials as soon as they hear something about the project.
A website or socials might exist, but not be linked by the artist. But you could ask yourself the question, if the seller didn’t take the time to set it up properly, do you want to invest in the art and person behind this collection?
Socials don’t Link Back
When there is a website provided, and 1 or more social media accounts are linked, do take the next step and dig deeper. First of all, just check the website and social media accounts. Do they exist? Many collections links to accounts that don’t exist.
If they exist, that’s a step in the right direction. But you’re not there yet. The second important thing to check is if the website, Twitter and/or Instagram link back to the same collection on OpenSea. I’ve seen many scams that link to the original socials so it looks legit.
Open the website and socials and go back from there to the collection on OpenSea. Verify if the URL is the same. Also verify if the number of items, number of owners and trading volume matches. If it doesn’t, you discovered a fake!
Note: Sometimes NFT artists just get the URL wrong. An example I’ve seen a lot is that they’ve put an @ symbol in front of their Twitter username, so the URL won’t work. Check the URL, if it’s wrong, just look up the username on Twitter or Instagram.
Similar Collection Names
A related topic to this one, to look out for, is similar names. Many of those scam projects use names that look legit but are slightly changed so you can barely see the difference.
One of such examples is Kaizen Crypto (original). There is a fake collection called Kaizem Crypto. Only one letter is changed, but if you aren’t careful, you might not notice. Another one is 0N1 FORCE (original). There is a fake collection around called ON1 FORCE (0 swapped by O, but this is barely visible).
Again, check the socials and see if they link back to the same collection (see chapter above). Also do a quick search on Google and see what turns up in the search results.
Search Google for Image
If that all seems to be in order, the next step is to search for the NFT on Google. The easiest way, in my opinion, is to right click the image and select ‘Search Google for image’. On your phone you can use ‘Search with Google Lens’ to quickly search the image on Google.
Then check the search results. If you see matching collections there, check if they’re the same one or a different one. In this case, our image was discovered in another collection, on Solsea. A different platform. That’s a big red flag!
If you don’t find any matches, repeat the same process for at least 3 images! Not all of them will be indexed by Google, so you might pick one that’s not on Google. The more expensive the NFT, the more searches I’d do. It won’t hurt to search 10 minutes if you want to invest $200 right?
Many Scams are NFTS from Solsea on Solana
The last months, many of the fake collections that are being created on OpenSea are copies of NFT collections on Solsea. Solsea is the biggest NFT marketplace on the Solana blockchain. I believe the reason for this is that they’re difficult to report. In this case OpenSea misses the functionality to report scam collections of different platforms.
OpenSea does allow you to report collections, by selecting the 3 dots on top. Having said that, you need to select a collection it was copied from. In that list of collections only collections on OpenSea are available. Collections of Solsea simply aren’t in the list, so people don’t know how to report them. So be careful with that.
I’ve seen collections on OpenSea that were stolen pieces of art from a famous collection on Solsea, yet they had several ETH of traded volume and they’re still up and running today. Although if you go through this list of easy tips, there are several criteria that fail though.
NFT Scams can be Hard to Spot
I have to admit, like probably many of you, I did buy some fakes in the past. And I probably will do it again in the future. Many fakes are easy to spot, but scammers get more and more creative. Some even go through the trouble of setting up a website, socials… This makes them look very legit.
The goal of this guide is to help you avoid a large amount of obvious fakes and scams, but always be cautious and do your research before investing in NFT collections. Sadly there are almost as many scams as real projects nowadays. So please pass the knowledge around and help others avoid making the same mistakes you did.
Share your NFT Scam Experiences
If you got scammed and have a tip on how others can avoid this, please reach out to us and share your story. We’ll bring it online and share it with the NFT community, so others don’t have to make the same mistake again. If we publish your experience, we’ll gift you a free dinosaur NFT as a thank you for making the NFT community a better place!