NFTs (Non-Fungible Tokens) are becoming more popular by the day, and more individuals are flocking into for-profit and royalties. Scammers, on the other hand, are always on the lookout for bogus NFTs to sell. Sophisticated traders are duped into purchasing phony NFTs. So what if you’ve never done something like this before? You’re even more vulnerable as a result.
But how can you tell if an Top NFT Development Companies is genuine or not? Here are some things to think about.
1. Beware of Fake Giveaways
While it’s usual for NFT teams to advertise freebies, some criminal actors use this opportunity to defraud naive individuals. The goal of any giveaway is to increase a project’s social media credibility and encourage people to invest in it.
Scammers, on the other hand, are unconcerned about credibility. They just seek to hit as many people as possible at one time while avoiding detection. They accomplish this by announcing ludicrous giveaways on social media and occasionally by utilizing a false account. When you opt for such claims, be wary of being cajoled into investing in a project that never materializes. Worse, it doesn’t demonstrate a strong Discord community.
Although some giveaways are difficult to resist, be wary of those that offer more than meets the eye. Scammers may invite you to link your NFT wallet to their phony NFT wallet. Token theft is frequently the result of this. If you don’t move quickly, your wallet could be carried away. A practical example is a report on the Solana Forum by an NFT trader of a $5000 Phantom wallet fraud after connecting to a bogus NFT giveaway account.
2. Is There Any Activity on the Discord and Twitter Pages?
If you’ve been around NFTs long enough, you’re well aware of the importance of the Discord app. As a result, an NFT community’s level of activity on Discord and Twitter, as well as their debate and tweet patterns, can expose their legitimacy.
Another feature of a legitimate NFT community is that they use their Discord channel and Twitter account to keep members informed about the release date, volume, expected floor price, and other important NFT indicators.
Take to your heels if the chats and discussions in an NFT Discord community are unconnected to the purpose, or if the mood is dull. This could be a forgery. You should also look into the number of people who make up a team. Also, keep an eye on their Twitter activity. A Twitter account that has been inactive for a long time with little or no activity is a red sign.
A team with fewer individuals than expected for a specific brand could potentially be a sign of impersonation. An ideal NFT Discord community is well-organized. Typically, they’ll be divided into channels based on their content. Also, keep an eye out for it.
3. Keep Track of Your Sales Volume Over Time
There are numerous clues, but if you want to examine an NFT’s authenticity, look at its sales history. In fact, an NFT with a low amount of sales over time is very certainly a fake.
It simply indicates that experienced NFT investors are likely to steer clear of it for any reason. Unfortunately, such projects are widespread on open marketplaces such as Solsea and OpenSea. You can find this information by looking at a project’s description on the relevant marketplace or website. That is if it has a web presence at all.
4. The NFT Website Speaks to a Large Audience
The website of an NFT is also a useful place to check its validity. NFTs are brands linked with companies over the internet, just like other commercial spheres. As a result, a trustworthy NFT should have a reliable website where you may learn more about its initiatives and collections.
Scammers have been known to imitate NFT websites and claim to be someone they are not. So, even if you find their website, it’s possible that it’s a hoax. Check the website’s address to make sure it’s safe. Then double-check the name. You may also look for a domain’s age with website checkers like DOMAINTOOLS. It’s presumably authentic if it’s older than the listed NFT project.
Also, see if the website has a professional design that includes all of the important information. Scammers rarely have the time to create a well-thought-out website. Poor user experience, ambiguous NFT and contact information, and missing Discord and Twitter links are all things to think about. An NFT website that lacks a clear About section that defines their strategy and plan, on the other hand, may indicate a poor investment. Even if there is a blueprint, be suspicious of its accuracy. A plan that sounds unclear, unattainable, or too good to be true is, in the end, a red sign.
5. Examine the Base Price
While it can be difficult to distinguish fraudulent NFTs based on this characteristic, excessively low or high floor costs can help.
Scammers frequently reduce the price of their collections to make them more appealing and sell in large quantities, despite the fact that they are phony. Furthermore, if an NFT’s floor price looks to be less than what it is worth, it is most likely a fake.
If you buy such NFTs, you can end up hanging them for a long time without finding an investor.
6. Compare the Number of Owners to the Number of NFTS Available
Naturally, an B2b rating & review platform’s project with a large number of investors is a promising one. It’s possible that it has fewer NFTs in its collection. For example, an NFT collection page with over 5,000 contributors but only 10,000 NFTs appears to be a decent one.
However, if an NFT collection only has one contributor, it’s generally a lousy deal. Some claim to have a large number of NFTs. If you purchase such NFTs, you may be a victim of fraud.
Signing off: Scam Detection
Despite the fact that we’ve brought out various red flags for bogus NFTs, it’s up to you to take action to avoid being scammed. The elements stated below are not exhaustive, but they are critical in determining whether or not an NFT is legitimate. And, in case you didn’t know, however, as previously stated, be cautious and take note of the highlighted indicators to prevent being duped.
