Partnership Director at Wallet Guard

Random Airdrops & Their Risks

A NFT appeared in my wallet! It's got an offer! Wait a second...

Ever see a random NFT get airdropped to your wallet? How about an absurd about of a token? There is a reason it's there, and that reason is not in your benefit whatsoever.

It's a too good to be true scenario; an NFT hits your wallet, it looks like there is an offer a few hundred dollars on it, and you are tempted to approve the offer. But hold on a second... let's take a look at some metrics here:

  • the NFT or token was airdropped to thousands of users
  • there are offers on the NFT but nobody has accepted them
  • exchanges show that the token has value but there is no activity on the contract
  • there is 0 volume or almost no volume on the collection and contract
  • the website and accounts it is tied to look suspicious or non-existent

You are running into a scenario which is called a honeypot. A honeypot is a type of malicious smart contract designed to deceive and exploit those who interact with it. If you choose to interact with the NFT (or token) that was airdropped to your wallet, you may actually be putting your wallet assets at risk and getting nothing in return. Behind the scenes, the contract contains hidden functionalities or vulnerabilities that allow the creator to exploit the users and potentially steal their funds or assets.

For example, a honeypot NFT contract may promise high returns or exclusive access to rare NFTs. When users interact with the contract by purchasing or staking their tokens, the contract may have hidden mechanisms that drain their funds or lock them out of accessing their assets.

These contracts can be difficult to identify because they often mimic legitimate projects or use similar branding and marketing tactics. They exploit the trust and excitement surrounding NFTs to lure users into falling for their scams.

To protect yourself from honeypot NFT contracts, it is important to exercise caution and follow best practices:

  • Do thorough research: Before interacting with any NFT contract, research the project, its team, and its reputation. Look for reviews, community feedback, and independent audits if available.
  • Read the smart contract: If possible, review the code of the smart contract associated with the NFT. This can help you identify any potential vulnerabilities or suspicious functionalities.
  • Use reputable platforms: Stick to well-known and trusted NFT marketplaces and platforms. These platforms often have measures in place to detect and prevent scams.
  • Be skeptical of high returns or exclusive offers: If something seems too good to be true, it probably is. Be cautious of contracts that promise unrealistic rewards or benefits.
  • Double-check URLs and avoid private messages: Scammers may try to impersonate legitimate platforms or team members through private messages or fake websites. Always verify the authenticity of URLs and avoid engaging with unsolicited messages.

By staying vigilant and following these precautions, you can reduce the risk of falling victim to honeypot NFT contracts and protect your funds and assets in the world of web3 and NFTs.

Wallet Guard can check your wallet to see if you have interacted with a honeypot in the past. Add it to your browser!

Protect Your Crypto - Wallet Guard

Published on
September 11, 2023

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