How To Spot Fake NFTs
How to spot fake NFTs? This question is on the minds of more people as non-fungible tokens take off in the art world. As NFTs help make art profitable again for many traditional and digital artists, plagiarism and fakes are a rising problem.
Nevertheless, counterfeit NFT’s are on the rise and are creating major issues to the artists, buyers as well as the NFT market places. Scammers appear keen to take advantage of lax rules and enforcement mechanisms on even the major NFT marketplaces.
The first rule of thumb to follow is generally: “If the deal seems too good to be true, that’s because it probably is.”
In other words, the prices of NFTs on the market are determined based on supply and demand. If an NFT is priced significantly cheaper or more expensive than similar NFTs from the same collection or category, don’t rush to purchase it. It may be a fake.
What Constitutes a “Real” NFT vs. a “Fake” NFT?
NFTs are relatively new to the mainstream public, and many people are still trying to wrap their heads around what is an NFT, let alone trying to distinguish what is a real NFT vs. a fake.
However, by spending some time thinking about why an NFT has value, can lose value, why you’re buying an NFT, and what makes an NFT authentic will serve you well before you reach into your crypto wallet and pull out your hard-earned money to pay for an NFT.
When you see how easy it is to create/mint an NFT, you can understand why fraudsters make copycat NFTs in order to make a quick buck.
Here it’s my goal to lay out a framework that you can use when thinking about buying an NFT that will help increase your confidence that you’re purchasing an authentic NFT and not a fake.
There is no concrete, binary way to categorize NFTs into real or fake (yet). Still, there are signs that you can look at that can inform you about the likely nature of your NFT of interest and ultimately lead you to make informed investment decisions.
Some techniques that you can use to spot a fake NFT are to:
- Examine NFT metadata
- Identify a fake NFT artist
- Distinguish fake pre-sales or offers
- Notice real and fake NFT websites
- Keep your eye on social media as an NFT project launches.
1. Examine the NFT’s Metadata
A “real NFT,” technically speaking, is anything digital that exists on a blockchain. (Yet, fakes exist on the blockchain as well.)
For example, if you have a piece of artwork or image, and this has been minted to the Ethereum blockchain, it is technically a real NFT.
There is little that really separates real NFTs from fake NFTs with respect to the manner in which they are stored on the blockchain, except for their respective locations on the blockchain.
By looking at an NFT’s metadata, you can determine the source address at which the NFT was created (minted) and the lineage of buyers and sellers that have traded the NFT since it was created.
By paying particular attention to the contract address that the NFT originated from, you can make sure that the NFT originated from the correct contract address of the official NFT collection from which you’re trying to buy.
Every NFT has verifiable metadata and transaction log that can assist in proving the record of ownership. The metadata will tell you who owns the NFT before you buy it, but also, more importantly, the original source of the NFT.
It may be helpful to use this guide to using metadata or check out “How to Check the Ownership of an NFT (7 Methods)” if you haven’t done this exercise before.
There are also signs of an authentic NFT collection that you can look for. If a collection has reached over 100ETH in sales, this is a good indication that this sales volume from the same contract address is from an authentic collection. (Of course, this is going to apply to NFTs on the Ethereum blockchain.)
If an NFT collection has reached this sales threshold, it will be verified with a blue checkmark on OpenSea, indicating that it is a Verified Collection.
2. Spot Fake NFT artist
A fake NFT artist is someone who steals artwork from another artist and passes it off as their own. Buying into an NFT that has plagiarized artwork is something you want to avoid, and doing a reverse image search of an image of an NFT can give you a sense of whether the artwork is copied.
This practice is very easy to do as fraudsters can essentially screenshot an image, create an NFT wallet account, mint the copied piece of art, and place it on the market for sale.
In order to determine if the NFT artwork is copied from something that is already available on the internet, you can do a “reverse Google search” to see if the image already exists elsewhere on the web. To learn how to do a reverse image search with Google, see this guide here.
If you find that your image of interest already exists on the web and was authored by someone else (other than the original artist or creator), this means the NFT art was most likely stolen, and you shouldn’t buy the NFT.
The secondary market, OpenSea, has started taking action against NFTs that turns out to be plagiarized or stolen by removing those NFTs from their platform in an effort to fight back against fake NFT artists profiting from the work of legitimate artists.
3. Spot Fake Pre-sales or Offers
Discord is an app that is usually one of the main venues where an NFT project is discussed, and as a result, this is a significant target area for scammers looking to peddle fake NFTs.
If you’re in Discord and you receive an unsolicited direct message from someone claiming to be a team member or founder of an NFT project, the chances are that this is a scam.
These direct messages (DMs) often claim that there is a “stealth mint” for an NFT project or that they are offering you a chance to get on the whitelist or allowlist of a given project.
If it’s an unsolicited DM from someone claiming to offer you something enticing, it’s likely a scam. If you open the DM, you will probably be led to click on malicious links that will fool you into purchasing fake NFTs.
In these situations, the fake NFT will mimic a more well-known and established upcoming NFT project, posing as that NFT project.
Clicking on a malicious link in a Discord DM will generally:
- Direct you to a fake website posing as the official NFT website.
- Initiate a request to your Metamask wallet or whatever wallet you are using to approve transactions that will transfer your assets to a scammer’s wallet.
This DM scam is the most common type of scam you’ll see of scammers impersonating legitimate NFT projects, and it’s something that you should stay vigilant and aware of as you spend time on NFT Discord servers or wherever you are socializing.
4. Spot Fake NFT Websites
We’ll define a “fake” NFT website as one that is posing as another legitimate NFT website that is home to a real NFT project, creator, or artist. In other words, a website that is posing as another website.
The fake NFT website will look remarkably similar to the real NFT website in these situations. Still, the differentiating element between the two will usually be the website’s web address you are visiting.
This web address should match the web address given on the NFT project’s official Twitter account and/or can be found in the “Official Links” section of the project’s Discord server.
If the web address of your website of interest does not match the web address found in the official Twitter or Discord, it is most likely a fake website posing as the official website.
Look closely before taking any action or connecting your wallet to any sites because the fake ones typically only differ from the official sites by one or a few characters.
For example, the official web address may be “NFTproject.io” and the fake website may be “NFTproject.com” or “NFT-project.io.” Very tricky!
5. Keep an Eye on Social Media Platforms as an NFT project launches
What do I mean by saying “keep your ear to the ground” with each NFT project? Specifically, I mean, stay tuned to Twitter and the project’s official Discord server for signs that something just doesn’t add up.
Between what you see on Twitter and Discord, you may see signs that the project founders or managers have ill intent or no real plans to follow through on their promises to their NFT community. These are situations where the NFT project may be what is called a “rug-pull,” and this is something you want to avoid.
A rug-pull is a type of scam perpetrated by the founders of a project to raise money from an NFT project and then abandon the project without providing any value to the NFT investors.
When scammers do this, they inevitably leave signs that the project is inauthentic. Detective-like NFT followers of the project will often sniff out the nonsense and sound the alarm to warn others about the suspected scam.
Keeping an eye on Twitter and certain Twitter accounts will help you stay vigilant on which NFT projects may be potential rug-pulls. One of these accounts is @NFTethics, and the owners of this account have a team of people who do due diligence on NFT projects to determine which ones look like rug-pulls, then warn the NFT community through their Twitter posts.
Another Twitter account that will help stay aware of potential rug-pulls is @rugpullfinder, which does similar work to @NFTethics in surfacing potential rug-pull projects on Twitter. You’re welcome to check out this simple guide by @rugpullfinder on the Top 10 Signs of a Rug-Pull.
In addition to keeping an eye on Twitter, you’d be smart to keep a pulse on what is being said on the Discord server of the NFT project.
Some basic Discord signs that indicate that something isn’t quite right are:
- Members of the Discord are posting messages saying “rug” or “scam.”
- Discord members who ask simple questions about the project are banned or silenced by the moderators.
- Too good to be true
Know The Real vs Fake NFTs
In order to spot a fake NFT and differentiate it from a real NFT, examine the NFT’s metadata, website, creator, or artist and learn to look for the tell-tale signs of a rug-pull.
By evaluating these four aspects of an NFT, you can start to spot the fakes and disqualify them from your list of investment opportunities.
This will protect you against the many scams in the NFT space and leave you free to invest in exciting and worthwhile projects. Remember, stay hungry, but don’t stay foolish.