John Ennis, Ecosystem Lead of Gnosis Safe, a multi-signature (multisig) wallet solution.
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Rugs are everywhere.
From BAYC, Cryptopunks, Meebits, and NFT collections, a lot of people are paying attention to them. Not all of this attention has been good. YOLO signed rug pulls, NFT hacks, and phishing schemes have been taking over the metaverse, making it less safe for people to live there. People who tried to get money from the OpenSea phishing site got away with over 250 NFTs worth more than $1.7 million.
In this case, the NFT hacks are upsetting to see, but they aren’t completely out of the question because of the safety measures many NFT collectors use. This is how punk6259 says it: “… we have cars before seat belts…. We have cars before seat belts.” There is a lot of work that needs to be done to make NFT holders more safe everywhere.
However, people can still take steps to protect themselves from security breaches. To answer punk6259: Seatbelts can be used to keep valuable NFTs safe, but people have to take charge of their own safety.
Putting a Rug in a Place
First, users should keep an eye out for signs of scams. Even the best people can be fooled. Here’s how to tell if someone is using some common, dishonest tricks:
Often, hackers will send NFTs to users’ accounts as a “trojan.” They will ask the user to sign a message in order to get into their account and take money from it.
FOMO-inducing URL: shady URL A cool new project comes out with a timer on the purchase page, which makes people very excited. The moment the user signs the transaction and buys something, hackers would have been able to get into their wallets. It was not known to the user that the purchase page was linked to a scam URL, so they went to that URL instead.
The email phishing scam that has been around for a long time. Users get an email that looks like it came from a platform or exchange they usually use, but it has a malicious link inside that makes them want to make a transaction. Or, it could even put malware in laptops that scans for seed phrases that are stored on them. (Don’t keep seed phrases on your computer! This is important!)
It happens to a central exchange or project that people use. It can be hacked, or even worse, it looks like it has been hacked. In this case, user-owned tokens or JPEGs that have been used on the project’s platform before are at risk from a rug.
It’s safest to vault up your NFTs with a little more protection.
Clean up your act before you vault up your NFTs by “revoke” permissions and permissions from any sketchy platforms you may have accidentally used. You can do this through Etherscan’s token approval tool and Opensea’s tutorial on how to do it.
A wallet for a course: Choosing an NFT Vault
Abstracting your valuables from your daily life makes sense. You don’t go shopping with all of your money in your pocket. Same way, you don’t buy digital art with all of your other art.
A hot wallet like Metamask or Rainbow is fine for people who use NFTs to quickly flip NFTs and interact with contracts. There should be a different level of safety for your high-value NFTs, which are called “grail assets.” So, in the event of a rug, the only collections that could be at risk are the small ones that you keep in your wallet that are hot.
Hardware wallets are a big step up, but they still have the problem of one private key being the only thing that can go wrong. If your private (seed phrase) is stolen or lost, your money and other things are gone.
To be safe, you should think about moving to a multisig. With hardware wallets, you’re only as safe as the single seed phrase that you choose to use.
Multisig wallets save the day.
The main difference between a hot or cold wallet and a multi-signature (multisig) wallet is how many private keys there are in each of them. When it comes to the latter, there are a lot of keys, so even if one of them is lost, the user’s digital assets will still be safe.
If you use open source and permissionless multisigs, you can be just as safe for your money and your money can be safe for your money.
Make sure that you are safe
In a recent tweet, the NFT collector punk 6529 said that multi-sig is a good way to keep NFTs safe. As of today, Gnosis Safe and Argent multi-sig wallets have been made. When they are combined, they can store and protect over 450 Bored Apes and 1240 Cryptopunks.
Multisigs are like seatbelts that you need for self-defense, like when you think about cars without seatbelts. It doesn’t matter which car dealerships add support for them. We just need everyone to use them.
Find out more:
Here’s how you can protect yourself from phishing as Trezor is hacked.
There are risks to Proof-of-Stake and Centralization, say analysts. The Ronin hack by Axie Infinity shows this.
DeFi hacks, exchange outages, and beginner mistakes are going to happen more in 2022, so be ready for them.
