How FailSafe Protects Your NFTs Against Wallet Hacks

Victims of wallet drainers and crypto scams often lose valuable NFTs in addition to their crypto tokens. This guide will walk you through the steps required to activate a foolproof security layer for non-fungible tokens in your wallet.

Crypto Scams and Wallet Hacks Explained

Over $100 million worth of NFTs were stolen in 2022. Since then, the rate of crypto theft has exponentially increased. With the return of a crypto bull market, threat actors have intensified criminal operations targeted at stealing assets from individuals and enterprises.

There are several attack vectors that could lead to crypto theft, ranging from spearphishing to sophisticated confidence scams. Generally, the aim of hackers and scammers is to gain unauthorised access to your wallet and transfer the contents to a wallet which they control. On the other hand, you may be tricked into unknowingly making this transfer yourself.

The blockchain’s immutable nature creates a situation where token transfers are irreversible. Hence, once your valuable NFTs are pilfered, there is no chance of retrieving them.

For NFT traders and collectors, the fallout from these wallet hacks can be devastating. Very often, high-value assets are transferred out before other contents of a compromised wallet. This means that, even in situations where the victim of a scam or hack detects the ongoing theft and takes steps to mitigate the loss, substantial damage has already been done.

How to Protect Your NFTs Using FailSafe

Crypto theft happens without warning. As cyberattacks evolve, it becomes harder for users to manually protect themselves against wallet hacks and scams aimed at stealing their NFTs. Threat mitigation tools are handy, but the risk of human error and undiscovered attack vectors looms constantly.

FailSafe allows you to automate the process of detecting attacks that threaten the security of your wallet. In addition, you can take advantage of a battle-tested system specifically designed to intercept attempts at stealing your NFTs. This means that, even in worst-case scenarios, you have an airtight backup plan that ensures you never lose custody of your crypto assets.

The next section will explain how it works, and how you can replicate this with NFTs in your own wallet.

Step 1: Connect your wallet

When you launch the FailSafe app, you will be prompted to verify ownership of your wallet. This is a gasless transaction that allows the FailSafe smart contract to read the contents of your wallet.

Now that you are ready to access the wallet security suite, FailSafe will display the contents of your wallet, allowing you to select which assets to protect. You may toggle between our supported networks (Ethereum, BNB Chain, and Polygon) to view the assets that your wallet holds on each respective blockchain.

Step 2: Arm the FailSafe Smart Contract With Gas

FailSafe works by executing a transaction on your wallet which prevents malicious transactions from being confirmed on the blockchain. In order to make this work, you will need to provide gas fees that will be used in the event that the FailSafe smart contract triggers such a transaction.

Gas fees are denominated in the wrapped version of your preferred network’s native token. For tokens on the Ethereum blockchain, such as the Mutant Ape Yacht Club NFT being protected by FailSafe in this guide, gas fees will be denominated in WETH.

The purpose of wrapping the native tokens is to ensure that the FailSafe smart contract is deployed as efficiently as possible. The recommended amount of gas required varies depending on the blockchain. For Ethereum, the minimum amount is 0.03 WETH.

Step 3: Choose your preferred protection mode

The next step is to select the NFT that you want to protect. Activating FailSafe protection is quick and easy, and can be done by clicking on the ‘Activate Protection’ button beside each asset.

Once you click on this button, FailSafe will present a dialog box that offers a choice between two protection options.

• Safe Mode is the default recommended setting. Once activated, FailSafe will intercept every incoming transaction that attempts to transfer the protected asset out of your wallet. This mode is perfect for newbies, long-term holders (such as collectors, whales, and NFT treasuries), and users who transact infrequently.
• Smart Mode uses intelligent threat detection to filter out suspicious transactions from harmless ones. FailSafe uses transaction labelling to activate smart triggers that only spring into action when fishy activity is detected. This mode offers more flexibility and is well suited for active traders and experienced users.

Step 4: Approve permission to access your NFT

Once you have chosen your preferred protection mode, your wallet (such as Metamask) will prompt you to sign a message. This is an important step in the process of securing your NFT against theft.

By signing this message, you will grant FailSafe pre-approval to deploy a smart contract to protect the NFTs within your wallet. If you hold multiple NFTs from the same collection, you will only be required to sign this message once in order to activate FailSafe protection on each one of your NFTs.

Granting access to your NFTs is required to enable the next important step, as we will explain below. Signing the approval message in your wallet does not incur any gas fees.

Step 5: Approve permission to transfer your NFT

When FailSafe has been granted access to your NFT, this will trigger another message in your wallet. You will be prompted to grant FailSafe the permission to transfer your assets. This only happens in the event that our threat detection system is triggered by suspicious activity in your wallet.

FailSafe requires this permission so that the smart contract can transfer your NFT before an unauthorized party can do so. This uses the immutability of blockchain transactions to your advantage because a compromised wallet is useless to a threat actor when your valuables have been safely removed.

Once again, this is an essential step in the process of activating FailSafe protection for your NFT. Signing this message will incur gas fees proportional to the network conditions on your blockchain of choice.

Step 6: Enjoy peace of mind

Congratulations! Your NFT is now protected by the most advanced wallet security suite in the world. Even if your wallet gets hacked, you have a safety net in place to ensure that your assets do not fall into the wrong hands.

In the event that FailSafe protection on your NFT is triggered, our smart contract will automatically create a fresh wallet called a ‘Recovery Vault.’ Your NFT will be swept into this vault which can only be accessed through your personal FailSafe dashboard.

Furthermore, you can activate two-factor authentication to ensure the maximum integrity of your FailSafe dashboard.

FailSafe is working with Web3 powerhouses to extend the ultimate layer of security to users across the world. Most recently, the ARC community, Asia’s most exclusive token-gated community, partnered with FailSafe to introduce our advanced security suite to their members.

Start protecting your NFTs today and surf the blockchain complete peace of mind.