The popular Phantom Wallet has introduced the “burn NFT feature” that rewards users in SOL tokens for reporting spam in an effort to curb the widespread scams in the crypto space.
The announcement comes close on the heels of a massive hacking attack on the Solana-based crypto wallets in the first week of August. Criminals stole about $5.2 million worth of crypto after hacking into about 8,000 Solana-based crypto wallets, mostly Phantom wallets.
In a recent tweet, Solana’s chief communications officer, Austin Fedora, said that “60 percent of the wallets tapped” in the attack were Phantom wallets. Phantom’s new feature encourages users to report fraud and earn SOL tokens by burning NFTs.
We spun up a Typeform to collect data and the results were clear – of those tapped, ~60% were Phantom users and 40% were Slope users. However, after extensive interviews and requests to the community, we could not find a single Phantom-forever user who had emptied their wallet
— Austin federa | 🔥💃 (@Austin_Federa) 3 August 2022
What is the Burn NFT feature?
Phantom revealed the details in a blog post Thursday morning, saying users could find the new feature in the Collectibles tab of the Phantom wallet app. Additionally, it said users would be rewarded with SOL tokens as “rent” when the burned token is removed from the wallet.
Phantom’s team will block the contract addresses and domains when a particular fraud NFT comes under the radar. This action will help remove the fraud or malicious NFT from your wallet.
Phantom hopes to minimize hacking attacks by creating a list of spam and phishing NFTs and sharing it with the global crypto community.
How will that benefit Solana?
The new feature will help secure the wider Solana blockchain.
“We’re still in the Wild West days of Web 3. As the crypto ecosystem grows, so do the bad actors, looking for ways to steal users’ funds,” Phantom said in a blog post. With the rapid growth of cryptos, cases of hacking attacks and spam NFTs have also increased, it noted.
The Phantom team has already added more than 800 mint addresses of malicious NFT pools to their website blocking mechanism, detailing the fraud patterns.
How do the scammers work?
These spams are common in the Solana blockchain as the transaction fee is relatively lower.
Cybercriminals use the NFT airdrop feature that allows users to receive free NFT for their attacks. The scammers usually ask users to click on a link in the description to receive free NFTs, and when they click on the link, they are directed to a malicious website.
Criminals steal the funds in two ways: either asking the user to authorize a transaction to “mine” or “claim” free NFT or asking the user for the seed phrase to empty the account.
“These scams are becoming increasingly sophisticated. For example, after a contract address and domain are identified as malicious, fraudsters can change an NFT’s metadata to avoid being blacklisted. It can feel like an endless game of hack-a-mole, but one we are committed to winning,” the company added.
Phantom is also working with SimpleHash, an NFT API developer, to create an internal reporting system to flag spam NFTs.
How will users benefit from Phantom’s new feature?
The new feature will ensure more security for Phantom Wallet. It gives users the control to report spam which will help block the contract address and domain. The investors can also earn SOL tokens as “rent” by reporting spam NFTs. Given the high risk in crypto, users should be cautious about transactions involving third-party websites.
