Solana-based Phantom Wallet launches Burn NFT feature to fight crypto hacks.

The popular Phantom Wallet has introduced the “NFT burn feature” offering users SOL token rewards for reporting spam in a bid to thwart rampant fraud in the crypto space.

The announcement comes on the heels of a massive hacking attack on Solana-based crypto wallets in the first week of August. The criminals stole around $5.2 million worth of cryptocurrency after hacking some 8,000 Solana-based crypto wallets, mostly Phantom wallets.

In a recent tweet, Solana communications chief Austin Fedora said that “60 percent of the depleted wallets” in the attack were Phantom wallets. Phantom’s new feature encourages users to report scams and earn SOL tokens by burning NFTs.

What is the Burn NFT feature?

Revealing the details in a blog post Thursday morning, Phantom said users would be able to find the new feature in the Phantom wallet app’s Collectibles tab. Additionally, she said that users would be rewarded SOL tokens as “rent” when the burned token is removed from the wallet.

The Phantom team will block contract addresses and domains when a particular NFT scam goes under their radar. This action will help remove the scam or malicious NFT from the 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 it benefit Solana?

The new feature will help protect the broader Solana blockchain.

“We are still in the Wild West days of Web 3. As the crypto ecosystem grows, so do bad actors, looking for ways to steal users’ funds,” Phantom said in a blog post. With the rapid growth of cryptocurrencies, cases of hacking attacks and spam NFTs have also increased, she noted.

The Phantom team has already aggregated over 800 malicious NFT collection mint addresses into its site blocking mechanism, detailing scam patterns.

How do scammers operate?

These spams are common on the Solana blockchain as their transaction fee is comparatively less.

Cybercriminals use the NFT airdrop feature that allows users to receive free NFT for attacks. Scammers typically ask users to click a link in the description to receive free NFTs, and when they click the link, they are directed to a malicious website.

The criminals steal the funds in two ways: the user is asked to approve a transaction to “mint” or “claim” free NFT, or the user is asked for the seed phrase to empty the account.

“These scams are getting more sophisticated. For example, after a contract address and domain are identified as malicious, scammers can change the metadata of an NFT to avoid being blacklisted. It can feel like a never-ending game.” to hit a mole, but one we are committed to winning,” the company added.

Phantom is also collaborating with SimpleHash, an NFT API developer, to create an internal reporting system for flagging unwanted NFTs.

How will users benefit from the new Phantom feature?

The new feature will ensure more security for the Phantom Wallet. It gives users the control to report spam which will help block the contract address and domain. Investors can also earn SOL tokens as “rent” by reporting unwanted NFTs. Given the high risks of cryptocurrencies, users should be careful about transactions involving third-party websites.

Leave a Comment