Minting Season is Here, and Scammers are Out in Full Force
Data shows that March could be a good month for NFTs, which means that scams are right around the corner.
At the time of writing, the Solana market cap is $6.7 billion with a 24-hour volume of $1.1B. The price of SOL is $17.56 and market dominance is 0.72%. The Total Crypto Market Cap is $929B, down 6.1%. The NFT transaction volume surpassed 802,000 SOL, closing in on $12M in the last 7 days.
Summary
Introduction
On-Chain Data shows a cool-off on Activity
Active Addresses
On-Chain Activity and NFT Volume
Bull Case
Protect Yourself against any Threat
Study the Wallet Provider
Login Precautions
There are no on-chain NFT Giveaways
Tips for Minting NFTs
Conclusion
Introduction
The Solana NFT Market has been in a tough spot since February. Rising token prices led to a liquidity crunch in the NFT ecosystem, causing a floor price drop on most collections. According to data from SolanaFloor, daily volume decreased by over 50% from the levels of January.
Although February has been tough, data shows the month of March might be hot for Solana NFTs. In addition to a drawdown in cryptocurrency prices, a positive shift in sentiment has led to an increase in activity and volume, boosted by the mint of several long-awaited collections such as Madlads by Backpack, Wolf Capital and The Bastards. Data shows that it is likely that we are approaching an NFT mint season. Unfortunately, mint seasons usually bring out scammers and rug pullers, which is why we have dedicated this newsletter to give you all the information you need to secure your funds and reduce the risk of being scammed.
Let’s dive in.
On-Chain Data shows a cool-off
One of the most important ways of measuring the health of a blockchain is through Active Addresses. The number of active addresses has been stable in the last 90 days. On Average, Solana has 350K active addresses, about the same as Polygon and Ethereum.
The Solana NFT market is not in its best shape at the moment. The SolanaFloor NFT index shows that even though the SOL index (green) is rising, the USD index (purple) is dropping. The latest downtrend in crypto and the rejection of a crucial level for the stock market resulted in a loss of confidence.
The bull case is that there are several NFT projects (MadLads, The Bastards, Wolf Capital) which have either confirmed or rumoured to be minting in March. Any of the currently hyped mints might form a big enough liquidity wave to push the ecosystem into an uptrend.
Claynosaurz and Galactic Geckos contributed to the positive sentiment shift on Solana NFTs, causing a rise in on-chain activity and NFT volume.
During mint seasons, Twitter is a friendly, positive place where users interact with one another in a supportive way. Additionally, many traders show off their new mints and profits.
Unfortunately, during times of elevated activity, volume, and prices, the platform can attract malicious actors who engage in deceitful and fraudulent practices such as rug pulls and phishing scams.
Protect Yourself against any Threat
As cryptocurrencies and NFTs continue to gain popularity, it's crucial to safeguard your funds and protect yourself from scams.
Study the Wallet Provider
Safety begins with choosing the right wallet.
It is recommended by many to prioritize using a cold wallet, such as those offered by reputable brands like Ledger or Trezor, to maximize the security of your digital assets. If you want to use a hot wallet, download wallet extensions from the official websites, to minimize the risk of exposure to malicious software. Before downloading any wallet, it is wise to check if the wallet has undergone rigorous stress testing and established a longstanding and trusted reputation within the industry.
Login Precautions
Maintaining strong password strength is essential in securing your digital assets against malicious activity. Although this is not possible in many cases, enabling two-factor authentication is also highly recommended, as it adds an extra layer of protection. It is important to remain vigilant against phishing scams, which are often designed to trick users into divulging sensitive information or clicking on malicious links. A general rule of thumb is that if an offer seems too good to be true, it likely isn’t.
There are no on-chain NFT Giveaways
You have probably received an Orca giveaway NFT. This NFT is not sent by the official Orca team, but by scammers trying to impersonate Orca in order to steal your funds.
Always verify the official Twitter page and handle of a project before taking any actions. Most legitimate projects will never create giveaways through NFT drops, and any case should be treated with suspicion. Additionally, airdrops that require users to visit external websites to claim or participate are typically fraudulent and should be avoided.
Tips for Minting NFTs
When minting NFTs, it is important to take certain precautions. One great strategy is to use a burner wallet, which is a secondary wallet used exclusively for the purpose of minting NFTs.
As a user, you only need to send the necessary funds for minting to the Burner wallet, avoiding any major loss if a wallet drain event takes place. Your main wallet should not connect to any protocols and networks, in order to avoid exposing it to potential security threats.
Conclusion
It is very important to pay attention to the market. Solana NFT mint seasons attract the participation of malicious actors who try to drain as much money as possible from the ecosystem. Be prepared, protect your funds and stay alert.