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Navigating NFTs safely

This article discusses best practices for keeping yourself safe while operating in the NFT space.
person in hoodie with their face hidden on computer
© RMIT 2022

The NFT space is largely unregulated and while that allows for people to freely transact with each other, it also creates an enticing stage for scammers. This means it is extremely important to follow best practices in this space, as you are solely responsible for your assets and actions.

With pseudonymous figures and unreadable smart contracts, you need to be weary of projects and be careful not to disclose private information such as your private keys or seed phrase.

Fraudulent mint pages

It is important to only engage in verified communities, so when buying on Opensea, make sure the project has a blue tick showing that they have been verified by Opensea. This is because people will create fake mint pages that are clones of the popular unverified projects, if you purchase from a fraudulent project, Opensea will delete the project but you won’t get your money back.

Some goods ways not to fall victim in this instance are to make sure you never click on unverifiable links, always double check the URL is correct as scammers will typically change just one letter and hope you won’t notice. To protect yourself from this, a simple tip is to bookmark verified pages that you use frequently. It is also best to do your due diligence and make sure the project you’re buying from is the correct one. Generally, projects will have a list of their official links on their discord or twitter.

Fake accounts

People will try to impersonate popular accounts on twitter, telegram and discord so make sure that you verify who you are interacting with. If you can’t verify, it’s probably best not to interact. It can be difficult to distinguish as fake accounts may have a large number of fake followers that makes them look credible. Some tips in order to distinguish are, looking out for the golden tick on twitter, double checking their username and see if you have any mutual friends or followers. However, if you are still unsure and cannot verify an account, it is best to err on the side of caution to ensure you do not become the victim of a social engineering attack. One simple way to protect yourself from fake accounts is to turn off DMs for accounts you aren’t friends with on Discord, Twitter and Telegram.

More best practices for engaging with NFTs

To ensure that the code of the project is secure, checking that the smart contracts have been audited by a verified third party is always recommended. Additionally, ensuring that the project team aren’t anonymous is a big one, as anonymous developers are less likely to be prosecuted for ‘rugging a project’.

Quite possibly the greatest practice is to do your own research (DYOR). Rather than taking the word of a stranger on the internet, take the time to conduct due diligence. In the web3 space, you are responsible for your actions, so make sure you have done the necessary background research before purchasing any NFTs.

Now it’s your turn

Time to do a little detective work. Use the NFT community tools that we have been learning about (OpenSeas, Discord, Twitter, etc) to find an NFT project that looks like it might be suspect. Share in the comments why you might hesitate to get involved in the project.

© RMIT 2022
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NFTs: A Practical Guide

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