Non-fungible tokens, or NFTs, offer massive revenue potential for brands, and opportunities for cybercriminals to exploit if security isn’t thought of from the start. Adidas scored more than $20 million with its first NFT drop, and many major sports leagues have now embraced these modern collectible memorabilia. A perfect example of this is NBA Top Shot, an online marketplace that offers digital basketball collectibles in the form of NFTs that is seeing great traction with the NBA playoffs and the hype of the initial NFT drop of former Los Angeles Lakers star Magic Johnson.
With the NBA Finals, Father's Day upcoming, and graduations in full swing, this is a great time for NFT marketplaces to promote limited-release NFTs as the perfect gift for dads and grads. However, bad actors have also taken notice of the recent high-dollar success of NFTs. Bots are cybercriminals’ secret weapon, and they use them to wreak havoc, manipulate prices, defraud customers, and undermine the NFT ecosystem. How can collectors and investors know the true value of their NFTs if the marketplace is infiltrated with bots?
NFT marketplaces, and organizations considering other Web3 business models, need to understand and address the fast-changing security requirements of doing business in the metaverse. To be successful, these new digital exchanges will need to offer dynamic security defenses against bot and other cyberattacks to safeguard their NFT investments, marketplace reputation, and the activities and experiences of customers.
Why are hackers focusing their bots on NFT sales? Quite simply, it’s where the money is. The market for NFTs grew to $41 billion by the end of 2021, according to Chainalysis. NFT marketplace ecosystems are relatively young, and the technology and processes are not really understood by many—which makes them a perfect target. Cybercrime organizations use bots to cause disruption and are well established, bringing years of experience to the task.
Traditional financial services, such as banks, brokerages, and insurance companies have contended with increasingly sophisticated bot attacks for years. The e-commerce industry has also been heavily hit by bots, especially with limited edition product releases like sneakers targeted by inventory hoarding bots. While blockchain, cryptocurrencies, and decentralized finance are recent innovations, they are emerging into an already mature, battle-tested cybercrime environment.
Bots are a fact of life for NFT marketplaces. NFT drops are highly susceptible to exploitation by malicious bots, which manipulate prices and product availability, or offer fake products for sale. Bots can also be part of larger and more nefarious schemes that can involve taking down entire websites, stealing identities, and acquiring other personal financial information. Here are some types of bots you should protect against:
Rampant bot activity on NFT marketplaces sows doubt and suspicion and affects not only potential buyers, but also the legitimate sellers, artists, athletes, and creatives whose products are sold on online marketplaces. Malicious bots have the potential to sidetrack the growth of blockchain-based markets, and if NFT exchanges gain the reputation of bot hotbeds, bots can threaten one of the most dynamic expressions of the new digital economy.
If you operate an NFT marketplace or other Web3 operation, the bottom line is that your customers expect a safe, fast, and seamless experience, and there are things you can do to ensure this happens.
F5 has worked closely with many of the top NFT marketplaces and exchanges, helping them to implement sophisticated security and safeguards from the start, protecting against bot attacks that target login, stopping fake account creation, and preventing inventory hoarding bots that buy up inventory and drive up the prices of NFTs.
If you’re considering promoting your NFTs for Father’s Day or graduation gift-giving, here are a few tips to keep in mind:
It is important to protect and gain customer trust, and this starts with education. Here are some tips you can share with your customers:
Want to learn how other organizations successfully protected their customers and company against bots? Read this F5 Bot Defense Total Economic Impact Report by Forrester.
If you’d like to see F5 Distributed Cloud Bot Defense in action, visit F5’s DevCentral to watch the demo.
And for information on what to look for in a bot defense solution, here are 10 questions to ask a bot mitigation vendor.