How to Avoid Airdrop Scams cover

How to Avoid Airdrop Scams

Published Dec 06, 2023 by CryptoDiary

TLDR:

  • Airdrops are tokens that protocols give to a targeted audience in exchange for engagement or other eligibility criteria;
  • There are many airdrop scammers trying to take advantage of excited investors. Most of them are fake protocols that pose as reputable projects;
  • To protect yourself from an airdrop scam make sure to do very thorough due diligence and never give out sensitive information. 

Before we dive into how to recognize a scam and how to protect yourself from it, let us do a little recap for those new to the crypto industry.


What are airdrops?

Airdropping is a marketing tactic, where in order to grow a following, generate interest and engagement from the community or reward early supporters, a blockchain project “drops” free tokens or coins to a targeted audience. The term, as you might have guessed, came from the practice of dropping supplies from the sky to troops stationed in isolated regions. 


To get airdrops you have to either be on the lookout on the project’s official channels (surprise airdrops), complete tasks (bounty airdrops) or already hold a specific cryptocurrency in your wallet (holder airdrops). Users usually receive airdrops directly in their wallets.


Airdrops gained popularity around 2017, and, as with most good things, someone immediately came up with a way to scam people with it. Here are some things you should look out for.


Common airdrop scam mechanisms

Since airdrops, as any free thing, are quite exciting, most scamming is built around lack of attention to detail that is often triggered by emotion.

One of the most popular airdrop scams is scammers posing as a reputable protocol. Their websites and socials usually look fairly well-done and will not raise any suspicion to an inexperienced eye. They direct users to a portal that asks them to connect their wallet to receive the airdrop. They might also ask for the user's seed phrase or private key. The moment the user connects their wallet to get the promised airdrop, their wallet’s balance gets stolen by the scammer.

Another popular scam is even more sophisticated. A user sees that they’ve gotten new tokens that they can’t remember buying or winning. Once they go to a block explorer to check the origin of these new tokens, an error page redirects them to a different site to claim the airdrop they supposedly received. Then the concept is the same - the user puts in private information and their funds disappear. Or, in a different turn of events - a transaction request pops up that the user may accidentally approve. That approval will give the site access to unlimited token approval, which on a legitimate site wouldn’t be an issue, since they do need this approval to move tokens on your behalf, however in this tragic case instead of giving the user tokens, the site takes them away.


How to protect yourself from airdrop scams

Now that you know how scammers are trying to get you, here are some tips on what to double check before signing into your wallet.

  • Diligently look into all the information available about the protocol. Look at the website, socials, whitepaper, etc. Check for bad grammar, typos and sloppy design.
  • Look at the project’s official communication channels. The information should be consistent across them. Check if their account names are suspiciously similar to some other reputable protocol’s.
  • See who is backing the protocol. Influencers are not always a sign of a trustworthy project, but well-known investors and advisors are a good marker.
  • Check what the crypto community is saying. There are plenty of forums and discussion groups, and this is a good time to take advantage of fellow enthusiasts’ knowledge.
  • If the airdrop asks you to download a specific wallet, do a triple check on its legitimacy.
  • DO NOT give out sensitive information like your private key, seed phrase, etc.
  • Verify token contact address on reputable block explorers. Double check that they are not similar to well-known projects.
  • Install email filters. They might be able to identify phishing emails. Do not click on any links sent to you via email you are even slightly unsure about.
  • If it looks too good to be true - it IS too good to be true.


Wrap up

The more popular airdrops grow - the more sophisticated airdrop scams become. Unfortunately there is no way to be 100% protected from airdrop scams. However we do stay positive and think that with proper due diligence and a thoughtful approach, airdrops are very much a fun and enjoyable part of the crypto landscape. Stay vigilant, stay on top of the industry news and always apply risk management strategies to your investments. And most of all, stay curious!

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