The NFT market is growing by the day. Just this month alone, several NFT projects have hit $1 billion in sales. Jpegs of rocks are selling for a million dollars, and images of apes are going for apeshit prices. With so much money flying around, it’s no wonder that NFT scams are becoming more commonplace. It’s more important than ever that collectors learn how to safely navigate the NFT marketspace.
The Double Edge of Decentralization
NFTs are traded on a peer-to-peer network, which allows you to buy directly from creators. No gatekeepers means greater access for everyone, but it also means that there’s no one to safeguard buyers from fraud.
NFT marketplaces like Mintable are not sellers – we’re platforms that allow creators and collectors to trade directly with one another. We will remove fraudulent NFTs when they are discovered, but with thousands of NFTs being minted daily, some might slip through the cracks and be bought before they can be removed. To help our buyers safely navigate the marketplace, we’ve written this guide on some common NFT scams, and show you how to avoid them.
Generally, there are three types of fake NFTs you may encounter in the marketspace:
SCAM 1: Images copied from the internet
These are the lowest tier of NFT scams, because they require little effort to make and are also the easiest to catch. They’re pretty much just images copied from the internet (as shown above). Sometimes, you can tell they’re copied just by looking at them. But unless your brain is a catalogue of every image on the internet ever, some will definitely slip through undetected. As a rule of thumb, it’s best to check every image you come across with a reverse image search.
1. Use Google’s Reverse Image Search
Google’s reverse image search allows you to check how many versions of an image are on the internet, when it was first uploaded, and how long it’s been around. If you suspect that an NFT may be a copy, do a quick search to see where else the image exists. If it wasn’t first uploaded by the artist, it’s most likely a scam and a copyright violation.
2. Mintable’s Authentication Feature
When buying from Mintable, this process is simplified through the platform’s authentication feature. Reverse image searches are automatically done by the platform, and the results can be seen below the listing’s image. It also catches visually similar images, just in case the copycats try to fly under the radar by tweaking the image a little.
SCAM 2: Artist Impersonators
One tier up from the copy-pasters are the artist impersonators, and I don’t mean the kind you hire to sing Elvis tunes at your party. These sneaky scammers are here to steal your money, by ripping off the hard work of other artists. This type of scam is harder to catch, because they can look legitimate at first glance. Earlier this year, the artwork of Derek Laufman was fraudulently sold on the Rarible marketplace by an impersonator who managed to register a verified profile on the platform. No matter how real the profile looks, always remember to verify authenticity! Here’s how to do it:
1. Check the artist’s pages.
If an artist has made an NFT, it’s highly likely that they would have mentioned it somewhere, either on social media or on their website. If there are no mentions of NFTs or links to their listings anywhere, it’s likely a fake.
2. Just ask
Hearing it straight from the horse’s mouth is the best way to verify authenticity. Contact the artist directly and ask them if the NFT is legitimate. If it isn’t, they’ll be happy to tell you and thankful that it’s been brought to their attention.
SCAM 3: Counterfeit Collectibles
NFT collectibles can be worth a lot of money in resales. The Bored Ape Yacht Club NFTs had an initial mint price of 0.08 ETH, but they now go for a minimum of 38 ETH. That’s over $90,000 for the cheapest one! A project like this is every scammer’s wet dream, and more copycats are popping up by the day.
Because such projects host initial sales on their own site, what you see on marketplaces are always secondary sales. Because they are listed by buyers and not the original creators, differences between legitimate resales and copies may not be obvious at first glance. Let us tell you what to look out for:
1. Check for suspiciously low prices
The profile above shows two fake apes on Mintable. The first red flag is the suspiciously low listing price. A quick look on CryptoSlam’s sales tracker shows that the cheapest ape sold recently went for 24 ETH. Nobody in their right mind would sell one for anything less, so these listings are definitely scams.
2. Check the contract address
Every NFT has a smart contract with a unique address on the blockchain that NEVER changes. You can check the contract address of an NFT project on its original website. This is the only guaranteed way to verify authenticity, especially if everything else about the listing looks legitimate.
On Mintable, the contract addresses of NFTs are displayed in the item metadata at the bottom of the page:
Note: If the item is listed on the Mintable Gasless Store, the contract address (in the blue rectangle) will be the Gasless Store address. The address to check is the one in red – which is the address of the NFT’s original creator. If this address doesn’t match the one on the project website, it’s 100% a fake.
Other scams to look out for
Aside from shady sellers, there are some out there who will try to steal your tokens more directly. Some scammers will impersonate marketplace support staff or discord moderators in an attempt to gather enough information to access your crypto wallet.
1. NEVER share your private keys with anyone, or keep them somewhere they can be easily hacked. Writing them down physically is the best move, and there’s no such thing as being too secure.
2. Don’t open links, files, or attachments from people you don’t know.
3. When troubleshooting issues with your crypto wallet, never share your screen or share any information that would let others link to your wallet. There’s no reason that verbal directions alone wouldn’t work.
Now that you know what NFT scams you should look out for and how to avoid them, you’ll be able to safely navigate the marketplace. Have fun, and happy collecting!