“We are still in the Wild West days of Web3. As the cryptocurrency ecosystem grows, so does the number of bad actors looking for ways to steal users’ funds. The rapid growth in popularity of NFTs has led to an increasingly widespread attack technique for scammers – Spam NFTs.”
Phantom noted that the problem was particularly prevalent on Solana due to its low transaction fees, where bad actors often take down air supposed to be free en masse, which contains malicious links.
Generally, the NFT spam system prompts the recipient to click a link for a free NFT miner. However, if they complete the process, their money ends up being taken out of their wallet. Instead, the link will ask the recipient to enter the seed phrase, which leads to the same result.
“These scams are becoming increasingly more sophisticated. For example, after identifying the address and domain of a contract as malicious, scammers can change the metadata of the NFT to try to avoid being blacklisted. It can feel like an endless game of whack-a -mole”, as stated in the blog post.
The move is part of a broader initiative by Phantom to combat NFT spam and bad actors in the space. The team stated that it also fights scammers through its phishing warning system, which warns users of “any malicious transactions that could compromise their assets or permissions” after clicking on suspicious links.
The post added that Phantom is currently collaborating with Blowfish to improve how it “alerts users to phishing attempts.”
“While we introduce NFT Burning today, we won’t stop there. Users can look forward to more automated spam detection in the future. Using providers like SimpleHash and our own internal reports, we will be able to gauge whether an NFT is potentially spam.”
Related: Crypto Spam Increases 4000% in 2 Years – LunarCrush
Phantom is one of the most popular wallet providers for Solana-based NFTs and decentralized fiat (DeFi), with more than 2 million monthly active users, according to the company.
At the beginning of August, rival wallet company Sloop suffered a security exploit that drained an estimated $8 million in funds on the Solana blockchain.
In a post-mortem analysis, Solana’s head of communications, Austin Fedora, found that 60% of the attack’s victims were Phantom users, even though the problem originated from Slope.
Solana hosted the second largest NFT sales volume in July at $56.1 million, behind only Ethereum, which posted $535.6 million, according to data from CryptoSlam.