Top 5 Red Flags to Watch out for While Trading NFTs

With the recent explosion in the popularity of NFTs (non-fungible tokens), there has been a corresponding increase in the number of scams and bad actors in space. As with any new and rapidly growing industry, it’s essential to be aware of the risks before you get involved. 

This article will review the top 5 red flags to watch out for a while trading NFTs. By being aware of these scams, you avoid getting rugged.

1. Team is not Doxxed

Dox is a internet / crypto-jargon for persons who expose their genuine identity in the crypto world and choose to be recognized by the community.

Every NFT results from a robust and talented team – individuals that care deeply about the project and want it to be the best in the market. It is critical to assess the people behind the product in terms of abilities, expertise, and credentials; if something does not add up, do not engage further.

Of course, there have been successful NFT initiatives with undoxxed teams. You may wish to inquire about the team’s motives for refusing to divulge their identity. Stay away if their answer does not appear to be adequate.

2. Fake Followers and Accounts

There are bots and paid personnel who chat with the community to increase participation and enthusiasm for the project.

Even if the group is made up of “genuine people,” it is necessary to look through the interactions on posts to determine whether they are actual people or bots. Examine their social media pages and Discord for toxic/fake followers, and compare their online member ratio to the overall member count – any discrepancy should tell you not to invest. It is also critical to observe if at least a few persons are on the NFT social media account; otherwise, this might be a warning indicator.

3. Unrealistic Mint Price

The combination of enthusiasm and fear of missing out (FOMO) results in an exaggerated mint price. Actual community builders begin at a low cost and do not drain the market of all liquidity.
When a project permits its first mint-ers to keep their first NFTs, it not only increases the value of the NFT but also creates loyalty from its supporters through periods when the project may be inactive. During market downturns, projects that mint ridiculously high prices frequently struggle to get backing.

Many strategies, including some that are malicious, may be used during the pre-selling of an NFT project. A great example is someone holding the cheapest NFTs available to ensure that no one else can buy them. Another is punishing developers or banning users for listing below the initial price, establishing echo chambers where only particular perspectives are allowed to be heard, and publicizing popular projects or intellectual property (IP).

4. Unrealistic roadmap

It is critical to determine whether the developer’s vision is a reasonable estimate for the time frame specified, as well as whether there is expected usefulness for the product.

5. Artificial hype

Celebrities and social media influencers have quickly jumped on the NFT bandwagon, endorsing everything from sunglasses to virtual real estate. They have been paid handsomely to advertise items or make cameos in films and television series recently. While this may be an efficient marketing tactic, it can also build unwarranted enthusiasm about a product or service.

However, before purchasing an NFT recommended by your favourite celebrity, you should research whether the endorsement is genuine or a forgery. There have been instances of celebrities advocating NFTs without understanding what they are or influencers being paid to endorse NFTs without declaring their relationship to the project. As a result, even if an NFT is suggested by someone you trust, you should conduct your research before purchasing it.

As customers, you must be aware of this tendency and resist the fake frenzy generated by these endorsements. Instead, research to determine whether a product or service is appropriate for us.

The takeaways from this article are that you should research before buying NFTs and be aware of the warning signs. By studying and knowing what to look for, you can avoid scams and ensure you are getting a good investment.

Binance to Use Soulbound Tokens for enabling Decentralized KYC of Wallets

The popular cryptocurrency exchange Binance has launched BAB, a Soulbound token on the BNB Chain, to create a decentralized solution to the KYC requirements for the cryptocurrency exchanges. Soulbound is non-transferable tokens that are assigned to a particular wallet and are used to indicate social status on Web3. 

As these NFTs are non-tradeable, they can be used to identify the wallet holder on a blockchain network, and the data linked to it can be used to pinpoint recorded actions by the wallet. The token will be called Binance Account Bound (BAB) token and “will certify the wallet owner’s verified user status on Binance and will be also available for use by third-party protocols.”

What Does it Mean for Binance Users?

The ownership of BAB is optional for the Binance users, and the users can choose to complete KYC checks using traditional methods or the Soulbound tokens. Moreover, ownership of the BAB token will only indicate that a wallet owner has cleared the KYC check of Binance and will not record any other user data. However, to record other information, Binance can issue other types of BAB tokens in the future. 

The CEO, Changpeng Zhao, said, 

“Soulbound Tokens will play a significant role in the way web3 credentials will work in a Decentralized Society… We foresee numerous use cases for the BAB token, and we will actively collaborate with the community to develop this revolutionary vision of decentralized society.”

BAB is not the first Soulbound Token in the crypto ecosystem but the first on the BNB Chain. There have been various Soulbound tokens with different utilities but are generally used to identify the user’s identity. The NFT market is brimming with innovation, and Soulbound tokens present unique use cases for the NFTs. 

Soulbound NFTs are a great way to ensure safety of the crypto users and can eventually reduce hacks and losses by making these tokens a replacement for private keys of digital wallets. 

Soul Bound NFTs by Vitalik Buterin

NFTs are, by definition, tokens that don’t have any value on their own but are assigned to valuable assets to facilitate trade. However, the founder of Ethereum, Vitalik Buterin, has announced the launch of an exciting new use case for the NFTs. 

Buterin recently co-wrote a 40-page paper to explain how Ethereum is going to revolve around a new ecosystem called Decentralized Society with souldbound tokens as one of the main attributes. 

Soulbound tokens are NFTs that a person can earn based in part on their education and job history. Unlike normal NFTs, these NFTs are non-transferable and represent the person’s reputation and accomplishments as a type of extended resume. 

The Real-Life Value of SBTs

Soulbound Tokens or SBTs are shareable as CVs or resumes while being attested to a soul or person. For example, one of the use cases for SBTs would be as a recommendation layer by a company for its employees. Buterin aims to use SBTs as degrees issued by universities, qualification verifications and more, making it difficult for imposters to impersonate anyone. 

The idea is to bolster people’s social identities by customizing them with unique, non-exchangeable badges. In theory, the tokens could help solve some of the problems ravaging decentralized finance, like scams and theft,” Buterin said. 

The SBTs will be stored in Soul wallets and can be easily recovered even if you somehow lose the key. The wallet would require consent from Soul community members, that would verify the user’s identity. These community members are called guardians, and the wallet owner can only select them to ensure security. 

The guardians can be close friends, family members, trusted institutions, etc. and can authenticate the owner of the soul through conversion, a face-to-face meeting and several other methods. 

The SBTs collection is meant to go live by the end of this year and will connect to Buterin’s larger plan to create a decentralized society by 2024. 

Spotify testing NFT galleries for Artists

The craze of NFTs has far surpassed the expected growth curve, with major artists and platforms embracing the era of digital assets. In the past few months, there have been several exciting developments where popular celebrities have launched exciting new NFT collections, and the art platform is incorporating these new demands.

Only recently, The Chainsmokers, a popular pop music creator, launched an NFT collection of 5,000 NFTs, which gives holders access to streaming royalties. In an exciting turn of events, the popular music streaming platform Spotify is also testing the NFT waters. 

Spotify X NFTs

Spotify is testing out a new feature where they will display NFT galleries on the artist’s pages. While this feature is currently limited to a small test with selected artists in the US, Spotify will launch full-fledged NFT integration soon. 

The test is being conducted for Android devices for now, and as a part of this test, users will be able to visit artists’ galleries on their pages. On tapping the NFT menu, the user will be able to see a large preview of the image, which will redirect them to the NFT landing page, where they will be able to purchase the artists’ NFTs. 

According to the publication Music Ally, Spotify will not collect a commission on the sales for now as it is just a test integration. Spotify also confirmed the test and mentioned that this update will “help a small group of artists promote their existing third-party NFT offerings via their artist profiles.”

They further added, “We routinely conduct a number of tests in an effort to improve artist and fan experiences. Some of those tests end up paving the way for a broader experience and others serve only as an important learning,”

However, presently Spotify won’t support a video or GF NFT as the test is limited to thumbnail previews or images. Moreover, users won’t be able to see the NFT unless they click on the menu and visit the official listing platform out of the app.

However, this is great news for all the artists and fans as a major streaming platform is joining the NFT wave. 

Hollywood and NFTs, a Match Made in Heaven?

There have been a lot of controversial opinions related to the emergence of NFTs and digital currencies in Hollywood. While some are more than excited about this unparalleled new opportunity, naysayers believe it is a match made in hell. Regardless of personal opinions, there is no denying the fact that the NFT wave has been massive as it offers a wide range of opportunities for the creators and the fans. 

While proper education and awareness for celebrities and artists are important for them to safely navigate this space, the future looks promising already. There are several popular celebrities global and worldwide that have already entered the NFT space, and more are joining the hype as well.

Artists and NFTs

Several major celebrities such as Snoop Dogg, Matt Damon, and Eva Longoria have already entered the NFT space. While some of these NFT collections have been successful, others have failed to pique fans’ interest. However, the chance of success of an artist’s NFT is the same as the chance of success of their artwork in their preferred medium. 

Shaq, the famous NBA Hall of Famer, also raised a million dollars for his charity, Shaq Gives Back, by purchasing Creature World and Mutant Ape Yacht Club NFTs. While other celebrities, such as Brie Larson, the superhero Captain Marvel in Disney’s Marvel Cinematic Universe, failed to impress her fans with her introduction to the NFT space. 

An important thing to remember in NFT space, like any other trade is to know the tricks before jumping in. Considering Mark Zuckerberg’s plan to integrate NFTs with popular social media platforms such as Twitter and Instagram, the NFT wave is only going to get bigger in the future. 

Moreover, there are so many opportunities in the NFT space waiting for the artists to bank on. Snoop Dogg recently turned his Death Row Records into an NFT label to offer his fans exclusive opportunity to own his NFT tracks. 

The NFT wave is here to stay and with time Hollywood and NFTs will indeed turn out to be a match made in heaven.