What are Airdrop Scams and How to Stay Safe?

by | Oct 19, 2021

Disclaimer: Posts on the HyperTrader blog and associated HyperLinq websites are for educational and informational purposes only. These posts should not be taken as financial advice, nor are they meant to be viewed as trading advice. HyperLinq Inc. or the authors take no responsibility for any damages or losses.

The world of crypto is infested with scams everywhere. With the influx of newcomers to the world of crypto, the scammers are taking the benefit of lack of awareness among newcomers and trying to rip them off with innovative ways. With all these scams, airdrop scams can be said to be one of the most sophisticated scams.

So how do these airdrop scams work and how can we stay safe from such scams? Let’s find out.

What are Airdrop Scams?

Basically, airdrop scams are a practice of luring people into paying a fee to unlock the fake airdrop token in their wallets. So here’s how they work:

A victim will see some unknown tokens in their wallet that will appear to be worth thousands or even millions of dollars. Subsequently, the victim will try to swap those tokens for ETH or some other token, however, that will show an error and the victim will see a pop-up that will redirect them to the scam website.

Once the victim lands on the phishing website, the victim will be prompted to unlock their tokens first in order to swap these tokens. The phishing website here instructs the victim to pay an exorbitant fee to ‘unlock’ the token. As the value of fake airdropped tokens seems to be in thousands of dollars, the expensive fee seems worthwhile to the innocent victim.

And the victim ends up paying an exorbitant fee of hundreds of dollars and gets nothing in return. And that’s how an innocent user ends up being another victim of an airdrop scam. Sometimes during the ‘unlocking’ process, users also end up giving the spending rights of their wallets to scammers and end up losing all their funds.

So, how can you stay safe from such scams?

How to Stay Safe from Airdrop Scams?

Well, if you haven’t heard of airdrop scams, it’s very likely that you end up falling for them. Therefore, it is always advisable to make a simple google search before interacting with an unknown website or token with your wallet.

Some security experts also advise using a burner wallet (a second wallet) to interact with non-audited DeFi websites. So next time, whenever you’re interacting with an airdrop, an upcoming NFT marketplace, or a new protocol offering massive yield, always remember to make a Google search before connecting your web-3 wallet, thus making sure the platform is not just another scam or a phishing website.

Head of Content Marketing @ HyperLinq. His love for Chai and mountains precedes everything. Often wonders about things like, "why $1 earned through leverage feels 100x better than $1 earned selling your time?"

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