NFT Wallet Security and Scams 3

Question 1

What is a 'honeypot' scam in the NFT and crypto ecosystem?

Accepted Answer

A scam where buyers can purchase but cannot sell or transfer the asset

Answer

Honeypot contracts allow purchases but contain code that blocks resale, trapping buyers with an asset they can never liquidate.

Question 2

Which of the following is the safest place to store your NFT wallet seed phrase?

Accepted Answer

A physical paper stored in a secure, offline location

Answer

A physical, offline copy of your seed phrase is safe from remote hackers; digital copies on connected devices are highly vulnerable.

Question 3

What warning sign indicates that an NFT project may be a scam?

Accepted Answer

Anonymous team with no verifiable identity or track record

Answer

Completely anonymous teams with no verifiable backgrounds make it easy for scammers to disappear after collecting funds.

Question 4

How does a 'front-running' attack affect NFT buyers?

Accepted Answer

Bots detect your pending transaction and submit a higher-gas transaction to buy the NFT first

Answer

Front-running bots monitor the mempool for profitable transactions and pay more gas to get their transaction confirmed ahead of yours.

Question 5

What is the purpose of using a separate 'burner wallet' when minting new NFTs?

Accepted Answer

To isolate risk so a malicious contract cannot access your main holdings

Answer

A burner wallet contains only the funds needed for a single mint, so even if the contract is malicious, your primary assets remain safe.

NFT - Art Practice Test