As mentioned in an article by Forkast, “Lazy Minting” has been dragging the NFT space down since the start.
Hacking has been an epidemic in the NFT space for a year now. Just look at the OpenSea exploit from a few weeks ago. Many are seeing the sheer amount of dollars flowing through these assets, and want their cut. Whether that be by legit-community growing means, or by nefarious techniques, comes down to the objective of the creator. Cash grabs are pretty obvious when you know what you’re looking for. NFT scams are the 2017 ICO craze all over again.
The “Community”, sometimes cult-like, nature of a lot of projects leading up to mint can blind even the best traders. Projects have started to weaponize this and combine it with some tricky (and unsafe) contracts to drain the community of their funds.
5/ Funny enough when I reached out to all the different projects the ones that responded said they either didn’t read over the smart contract beforehand or weren’t the most technically inclined teams.
(Always review the contract beforehand especially if outsourced)
— zachxbt (@zachxbt) March 8, 2022
While some of these cases are just naive creators, most are people trying to get as much ETH as they can. And then, these bad actors move to the next cash grab and repeat. But how do we spot these projects before you get caught up in the noise, and it’s too late?
Off-Chain NFTS Are a Serious Issue
As highlighted by Forkast, “Lazy Minting” is the biggest red flag in the space. When a centralized service stores the display image for the NFT, the control over the asset really isn’t in your hands. That’s because if this centralized service shuts down, or seizes access in any way, the NFT goes with it.
Oftentimes, projects choose to go with centralized storage services instead of on-chain-storage options, like IPFS. These alternatives are much cheaper, and easier to use, compared to their on-chain counterparts.
Cutting corners may save money for the developers in the short term. But, in the long-term this only causes issues. According to Forkast:
“An NFT’s real value comes from its assimilation into the blockchain. Creators who submit their NFTs without minting submit unprotected digital files enabling threat actors to upload and timestamp a digital file to Ethereum or another processing public protocol.”
7) There you have it, Humanoid holders currently do not own their complete NFTs: they have a $853 reference file that points to centralized metadata & art
And when that goes offline (later this year) they will technically get rugged …
— OKHotshot.eth (@NFTherder) February 14, 2022
We’re seeing “lazy minting” issues happen with prominent projects right in front of our eyes. When buying NFTs, make sure you’re actually buying an NFT. Sometimes, you may actually be buying a JPEG, and nothing more. NFT scams are getting more creative by the day, so be vigilant in your research!
NOTE: Remember always to do your research, make your own decisions, and invest in projects that interest you!
Follow our new Altcoin Buzz Public NFT Wallet to keep an eye on collections we’re buying, selling, and holding! Use this as a jumping-off point for your research.
Also, Join us on Telegram to receive free trading signals.
Finally, For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.