The Most Common Forms of Web3 Scams that Users Should Beware Of

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The advent of Web3 technology has brought about a new era of decentralized markets, blockchain-based applications, and innovative opportunities for users. However, with the rise of this technology, there has also been an increase in various scams targeting unsuspecting users. In this article, we will explore the most common forms of Web3 market scams and emphasize the importance of being aware of these scams.

I. Common Forms of Web3 Market Scams

A. Celebrity Airdrops

One prevalent scam in the Web3 market involves celebrity airdrops. Scammers impersonate well-known figures, promising free tokens or exclusive access to projects. Unsuspecting users may be enticed to provide their private information or make financial contributions, only to realize that the celebrity endorsement was a fabrication. Scammers often impersonate celebrities on social media platforms and offer free tokens or coins to users who participate in an airdrop. - In July 2020, Twitter was hacked and scammers used the accounts of high-profile individuals to promote a fake Bitcoin giveaway scam. - In September 2021, a fake Elon Musk account on Twitter was used to promote a Dogecoin giveaway scam.

B. Fake NFTs

Non-Fungible Tokens (NFTs) have gained immense popularity in the Web3 market. Scammers take advantage of this by creating counterfeit NFTs or selling non-existent ones. Users must be cautious when purchasing NFTs and ensure they are buying from reputable sources or artists.- In March 2021, a fake Banksy NFT sold for $336,000.

C. Spoofing

Spoofing refers to the creation of fake websites, social media accounts, or applications that closely resemble legitimate platforms. Scammers use these deceptive techniques to trick users into providing sensitive information such as wallet addresses, passwords, or private keys. This information is then used to compromise the victim's funds or identity. Users are tricked into entering their private keys or seed phrases, which gives scammers access to their funds. - In May 2021, a fake MetaMask app was available on the Google Play store and was downloaded over 50,000 times.

D. Rug Pull Scams

Rug pull scams occur when developers abandon or exploit a project after it gains popularity. These scams often involve deceptive tactics to lure investors, such as promising high returns or exclusive privileges. Once a significant amount of funds is invested, the scammers disappear, leaving investors with worthless tokens. Once investors have bought into the cryptocurrency, the scammers pull out all their funds and disappear. - In August 2021, a new cryptocurrency called Iron Finance lost almost all its value in just one day after a “bank run” by investors.

E. Pump and Dump Scams

Pump and dump scams involve artificially inflating the price of a particular cryptocurrency or token through false information or coordinated efforts. The scammers create hype around the asset, attracting unsuspecting investors who subsequently purchase the token at an inflated price. Once the scammers sell their holdings, the price crashes, resulting in significant losses for those who bought in. - In February 2021, a group of Reddit users promoted GameStop stock and caused its price to skyrocket.

F. Phishing Scams

Phishing scams are prevalent in Web3 markets and typically involve fraudulent emails, messages, or websites designed to appear legitimate. Scammers aim to deceive users into revealing their private keys, wallet information, or login credentials. With this sensitive data, scammers can gain unauthorized access to users' accounts and steal their funds. - In March 2021, phishing attacks against cryptocurrency wallets increased by over 200%

II. How to Avoid Web3 Market Scams

A. Research before investing

Thoroughly research any project, token, or platform before investing. Analyze the team behind the project, their track record, and the project's goals. Verify the authenticity of endorsements or partnerships with celebrities or influencers by cross-referencing information from official sources.

B. Be wary of unsolicited offers

Exercise caution when encountering unsolicited offers or messages promising exclusive investment opportunities or high returns. Legitimate projects seldom approach users directly with investment opportunities. Always verify the information through official channels before making any financial commitments.

C. Keep your private keys safe

Protect your private keys and sensitive information by utilizing secure password management practices. Avoid sharing private keys, wallet addresses, or login credentials with anyone, and be cautious of entering this information on suspicious websites or applications.

D. Use trusted platforms and wallets

Only use well-established and reputable platforms or wallets for transactions and investments. Avoid obscure or unknown platforms that lack transparency or have a history of security issues. Check for user reviews and feedback to assess the platform's credibility.

Multi Signature wallets like Orosign can provide an additional layer of security against hackers. Multisig wallets require two or more private keys to authorize a transaction, making it much harder for hackers to gain access to your funds.

Orosign is a Self-Managing Mobile App For Digital Assets that serves as an interface of Orochi Ecosystem, which can integrate multiple games and native decentralized applications. Orosign allows users to interact with all applications on Orochi Computation Layer and empowers customers to organize and manage their digital assets.

Orosign is designed for ease of use, even for non-crypto users. You can send, receive or store various cryptocurrencies and digital assets safely and securely with Orosign mobile app.

Currently, Orosign allows customers to create their own multisignature wallet with minimal cost as well as customize smart contracts to meet their own expectations. Off-chain signing and verification are used to secure the signing process. All proofs are verified independently with secp256k1, which is the most widely used elliptic curve in the blockchain space, thanks to its 256 bits security level. Thus, the fund is safe as long as the majority of private keys are safe

Read more about why should we own a Multisignature Wallet?

III. Conclusion

In conclusion, Web3 market scams pose significant risks to unsuspecting users seeking to explore the world of decentralized technologies. By understanding the common forms of scams and adopting proactive measures, users can protect themselves from falling victim to these fraudulent schemes.

It is crucial to remain vigilant, conduct thorough research, and use trusted platforms and wallets for transactions. Beware of unsolicited offers and exercise caution when sharing sensitive information. By prioritizing security and staying informed, users can mitigate the risks associated with Web3 market scams and enjoy the benefits of the decentralized ecosystem.

Remember, in the Web3 market, your awareness and skepticism are your best defenses against scams.

About Orochi Network

Orochi Network is a cutting-edge zkOS (An operating system based on zero-knowledge proof) designed to tackle the challenges of computation limitation, data correctness, and data availability in the Web3 industry. With the well-rounded solutions for Web3 Applications, Orochi Network omits the current performance-related barriers and makes ways for more comprehensive dApps hence, becoming the backbone of Web3's infrastructure landscape.

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The Most Common Forms of Web3 Scams that Users Should Beware Of

II. How to Avoid Web3 Market Scams

III. Conclusion

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