NFT field is full of fake numbers and projects whose goal is just to get as much money from you as possible. It can be a huge headache trying to differentiate legit projects from lies, especially if you’re new…
Here are few most common ways to spot cash grab NFT project:
Project has bought followers
Firstly, check their followers in SocialBlade (https://socialblade.com). Compare it to a legit NFT Project and look how unstable it is. If it gained hundreds of followers one day and lost few or gained only few other days, most likely they bought followers.
No information about the team
Nowadays, if NFT project team doesn’t show their faces, you should immediately ask yourself why they are doing that. It might seem reasonable since we are in a web3 space where almost everyone is anonymous, yet on business / investment perspective having an anonymous team just increases the risk of project going nowhere.
When you don’t attach your identity to the project, it’s easy for you to just get up, take all the money and stop all the communications. Leaving investors empty handed. Of course, there are numerous projects with doxxed teams that rugpulled (took all the money and left), but the team risks serious consequences (like jail time) for doing that. This is why having names under project decreases the risk of rugpull.
Discord has thousands of users, but nobody is talking
This is the simplest way to immediately see how fake they are. Most of the NFT projects want to show social proof. Yet, if you don’t have a serious product, nobody is going to follow you. Inpatient projects choose to buy “social boost” to appear more legit. This is really hard to spot fake people because you can just pay people from third-word counties to shill, talk and spam your socials. So just look after repeatable phrases or suspicious account usernames.
Some projects just straight up buying numbers, so if you have 10k in your Discord and only 10 people are talking, there is something wrong with your project
They are doing more marketing than actual work
This one shouldn’t be an automatic red flag. Marketing just helps you sell out and without marketing you are nothing. But to me that just seems like you want to sell NFTs more than build.
Always try to figure out if the project is doing just as much work in development as in marketing. And stay pessimistic – with great marketing, you can make a trashy project with no utility appear as a great investment.
Have a lot of followers but little to no content in other platforms
Some projects like to flex their thousands of followers in other platforms, like YouTube or Instagram, but they have like 6-10 posts. It should be an automatic red flag. You don’t get followers having nothing
I don’t even understand why would anyone buy YouTube followers and have zero videos there. Well, yeah if you have couple of videos and only 10 subscribers it does look a bit bad on your project. But at least those numbers are true. Not many followers choose to subscribe to NFT project YouTube videos. Especially if you only have a couple of videos up. So expect that number to be less than 10% of Twitter followers (if their main media is Twitter)
Their selling point is your returns
If NFT projects roadmap consist of giveaways, airdrops and just promises of ability to make you huge profits, run. They are just trying to make it seem like a profitable investment. Airdrops don’t mean nothing if the project is trash.
Don’t fall for that. Look for product that people would want to use, not free money.
They are “derivative”
While this one is a bit controversial, I personally see derivative NFT projects as a rip off. They are copy-cat projects that don’t offer anything new. Just copying existing successful project in hopes of catching some cheap returns of that project success. I suggest avoiding those entirely.
I hope I can help someone with this article. Good luck! <3
Gustas -founder of Ballistic Freaks