NFT
Achieving social media influencer status is something many emerging non-fungible token (NFT) collectors dream of. Hidden behind profile picture (PFP) are NFT’s figures who send ‘gm’ messages, share the latest crypto news and boost morale within the Web3 community when the market takes a hit.
Many of these influencers have amassed tens of thousands – sometimes millions – of followers. But with a large following comes the responsibility to act in good faith, knowing that their tweets can influence people’s opinions about whether to buy or sell an NFT.
The role becomes less glamorous when an influencer promotes an NFT project that turns out to be a scam.
On Tuesday morning, Web3 influencer Andrew Wang posted a Twitter thread promoting an NFT collection called Pixel Penguins. In his post, he shared that one of his friends named “Sarah”, or Hopeexist1 on Twitter, has been battling cancer ever since and released the collection to raise money for her hefty medical bills.
“I will stake my rep to say this is real in the midst of all the scams going on in our space,” said Wang. “I often talk to her art teacher when she’s for treatment and he says she’s the best student he’s ever had, that her talent is too precious, that she needs to survive.”
According to Wang’s wire, each NFT in the pixelated art collection was $13 to hit, with 20% of the profits donated to charity, while the rest would be used to pay for Sarah’s treatment. The collection wasn’t new — it launched in February, and Twitter user LeviNotAckerman shared a similar story about the Pixel Penguins collection earlier in April.
Wang’s tweet gained more attention on Twitter, and soon many users, likely encouraged by his beliefs, began slapping Pixel Penguins to help her cause. Within hours of the first thread, Pixel Penguins sold out and started trending on the secondary marketplace OpenSea, with the bottom price increasing to 0.07 ETH, or about $130, on Tuesday night.
However, as the day progressed, Twitter users began to suspect that the project was not what it claimed to be. Soon, users discovered questionable tweets from Sarah’s account dating back to 2021 and previous allegations of stolen artwork resurfaced. Some even suggested that her cancer diagnosis was fabricated to attract donations.
But the damage had already been done. Soon, the Hopeexist1 Twitter account was deleted along with other traces of the account on the internet.
As the rumors intensified, pseudonymous crypto sleuth ZachXBT shared ETH addresses linked to the Pixel Penguin NFT Collection, showing that the contract had accumulated nearly 61.6 ETH, or approximately $117,000. Two hours later, ZachXBT shared that 63.5 ETH, almost $119,000, of the money earned from the project had been split between two new wallet addresses. As duped users scrambled to figure out how to recoup their losses, the scammers apparently deposited funds into a wallet on cryptocurrency exchange OKX, further obscuring their paper trail.
“I wanted to help a struggling artist battling cancer,” shared Twitter user DachshundWizard, writing that he had been taken advantage of. “I felt like I could use today’s momentum to give hundreds of thousands to people for nothing — it worked, but it turned into a rug and I was greatly benefited from it.”
As of the time of publication, the bottom price of the collection has dropped to 0.004 ETH, or about $7. Still, according to OpenSea, the collection has brought in 216 ETH, or about $403,000, in trading volume.
Guilt, shame and anger
Many NFT collectors who fell for the apparent carpet pull began to direct their anger at those they wronged, especially Andrew Wang.
In the hours after the Hopeexist1 story imploded, Wang posted a follow-up thread denouncing the collection and apologizing for his role in promoting it.
“I didn’t have the proper wisdom to navigate something like that,” Wang wrote. “Hearing a story as heartbreaking as hers backed by art she was creating made it hard for me to be objective.”
He tweeted that he spoke to someone claiming to be her teacher before buying her artwork, which gave the allure of legitimacy.
“I would say I would be better in the future, but to be honest, I’m not sure I would be any different,” Wang wrote. “Personally, I feel hurt and cheated…and I feel even worse that the community bought Pixel Penguins after I was one of the people who shared her story. I’m very sorry about that.”
For some, the apology was not enough given the impact of his promotion among his thousands of followers. Another user pointed out that in December 2022 he posted another thread promoting her work.
“How did you verify her story?” asked ZachXBT. “Ngl most people probably hit for your thread.”
“I bought one of her pieces assuming you verified it,” said user Rocketgirl.
Wang declined to be interviewed for this story.
The role of influencers in Web3
For years, the crypto community has gravitated to social media sites such as Twitter and Discord to find a community and anticipate price movements. As PFP projects grew in popularity, NFT enthusiasts took to the platform to show off their assets and develop a following around their digital identity. This has led to an influx of influencers with thousands of followers evangelizing and pushing NFT collections, often without any oversight.
Investments are always risky, especially in the crypto space, and even more so when it comes to NFTs that are attributed an artistic or emotional value. It can be difficult to distinguish honest projects from grievances, which is why influencers often position themselves as trusted opinion leaders.
But scam after NFT scam has served as a reminder that explicitly trusting one source without doing your own research is a fool’s errand – a tenet of the crypto space.
Thousands of nervous users tuned into a Twitter Space Tuesday evening to hear about the Pixel Penguins scam from a handful of influencers, including Wang.
While the discussion focused on the lies used to support the project, Twitter user Fetty spoke about the bigger implications of influencers promoting collections that sometimes turn out to be carpet pulls.
“I’ve heard people repeat the point that it’s really hard to do due diligence or something like that, we can’t blame [influencers] for not realizing this was a scam,” Fetty said. “If you end up in such an influential position… or even try to support projects, you have to take responsibility.”
Wang responded, claiming that it was never his intention to provide investment guidance or push individuals to withdraw NFTs from the collection.
“Never take what I say as trading advice,” Wang said. “If I referenced that in my tweets today, I don’t think I did, but since there’s space there… I’m sorry.”
While some defended Wang, others pointed out that this is often a familiar playbook used by influencers to absolve themselves of responsibility.
In April, former journalist and Web3 influencer Nicole Benham promoted the Blocky Doge NFT Collection free coin created by Dogecoin founder BillyM2K. While hype the collection on Twitter spaces, she also dumped 220 of the 250 Blocky Doge NFTs she owned. According to data from OpenSea, the collection’s average price lost half its value within 24 hours.
After receiving backlash, Benham tweeted that she was “doing my best to rectify the situation”, though others questioned the authenticity of her apology.
In February, NFT collection Friendsies deleted his Twitter account, raising concerns that the project was a scam. While revealing the details of the collection, Twitter users pointed the finger at Web3 show Rug Radio host Farokh and artist Jen Stark — who each have tens of thousands of followers — for their past promotions of the project.
As with many other digital subcultures, NFT communities have flourished online and leading voices have emerged in the space. But often it feels like the NFT space is particularly lawless and influencers suffer little consequence from their actions ultimately affecting thousands.
Ultimately, it is the job of each individual collector to properly plan a project before investing any money. Still, these well-known stories are a reminder that while you may feel like you “know” an influencer, you rarely know what their motivations are and how well they actually vetted a project.