A fool and his crypto are soon parted, so goes the modern saying. Here are tips to help make sure your prized NFTs are safe
NFTs (non-fungible tokens) have become a lucrative investment trend, known to reap millions worth of gains if lucky. Beneath the surface, NFTs are unique tokens on the blockchain, distributed across thousands of nodes as a record of transactions and to verify ownership. The core innovation behind Web3 lies in its decentralization technology, where each block of data is spread across an entire network, making it tamperproof and secure.
However, as hackers have progressively become more sophisticated, the once unhackable system can now be infiltrated, causing victims to lose valuable assets. In one notorious case, Taiwanese pop star Jay Chou had his Bored Ape NFT—worth over US$500,000—stolen through a phishing scam.
As you invest in the NFT bubble, it is imperative that you take steps to keep your prized NFTs safe and prevent unexpected parting from your crypto.
1. Purchase from official websites
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.)
Also, be wary of any plug-ins downloaded to your browser. When connecting software wallets such as MetaMask and Coinbase, you are authorizing transactions but unknowingly to hackers who can access your vault of NFTs and cryptocurrency.
2. Do your own research
If an NFT project seems too good to be true, it most likely is. Projects that have been pumped up through social media or by paid influencers, but which aren’t backed by a solid roadmap (or an overpromising one) can often be a ‘rug pull’—where its creators tend to cash out after minting and disappear.
Founder of blue-chip collection ‘Azuki’ has recently landed into a rug pull scandal after admitting to profit from past failed projects, prompting holders to pull out and causing prices to plummet. Make sure the creators have been ‘doxxed’, meaning the team is publicly identified and is credible from past experiences.