Investing in an NFT can be a complex and contentious experience. You want to be able to invest in an item that will repay far more than its initial value. But there are many scams on the market that you should be aware of. The more you know about these scams, the easier it will be for you to avoid them.
You Need the Knowledge to Avoid NFT Scams
It is not enough to just know how to make an NFT and sell it. It will also be crucial to learn how to spot and avoid a potential scam. Learning how to do so will be contingent upon knowing how to read the signs of a dishonest transaction. This is info that you can access in order to save a lot of time, energy, and money.
The main issue with the modern NFT market is that there are not a lot of safe spaces. It will be up to you to do all you can to ensure you don’t fall victim to a scam. You may be best off using a custodial NFT market for your initial set of buys. This can help you learn the ropes in a safer environment.
Don’t Let Scammers Pull the Rug Out
There are plenty of pros and cons that can be associated with the modern NFT market. One of the biggest potential cons will be scams such as the rug pull. This particular play is one of the most common ploys to separate a gullible investor from their money. It’s been practiced by many savvy criminals.
A rug pull is a type of scam that sees developers hyping an NFT to the skies. They use social media to spread the news of an NFT offer to as many people. The idea is to reel in money from as many investors as possible. However, once the money is made, the rug gets pulled out and the creators just vanish.
Social media is the key to building up as much credibility for their project as they can muster. It also creates a buzz that gives their NFT an extra layer of seeming reliability. This can lead even seasoned investors to fall for the hype. But as soon as the creators reach their goal, the entire project disappears.
NFT Bidding Scams Are on the Rise
Another common type of NFT scam involves the process of bidding. You may attempt to sell your NFT on the secondary market. To do so, you will naturally try to go for the very highest bid. A scammer can give you a high bid in order to score your approval. But then they pull a bait and switch move with the currency.
A bidder may agree to buy an NFT from you for the price of 20 Ether. This is a sale that should net you $9,000 at current market rates. But the bidder will then switch the currency to 50 Dogecoin, which equals less than $5. It’s a good idea to double-check the currency you are being in to avoid this type of switch.
Don’t Fall for a Pump and Dump
A fraudulent trader may try to hype up a particular NFT on the web. They may use a social media campaign to create a huge buzz around their item. The NFT itself may be real. This lends extra credibility to the scam.
However, once the price of the NFT has been inflated to the maximum, the holders will then dump it on the open market. This will naturally lead to a massive reduction in the value of the NFT. As prices plummet, the creators will take the opportunity to disappear without a trace.
You Need the Experience to Avoid NFT Scams
There are many qualities that you can have recourse to in order to avoid getting scammed. One of them will be vigilance. It will be up to you to do all that you can to stay alert to potential scams. The world of NFT creation and trading is chock full of them. The more experience you gain, the wiser you will become.
