The rise of Web3 has led to an explosion in the popularity of nonfungible tokens (NFTs), which offer unique ownership of digital assets, including art, music, and even tweets. However, the Web3 space has seen its fair share of exploits, with hackers exploiting more than $320 million in the first quarter of 2023 alone. As a result, securing digital assets has become a top priority for many users, particularly those considering joining the Web3 space.
To address this security gap, Wert and Avata have launched a new NFT warranty service. The opt-in service will provide coverage for up to 90% of the value of compromised digital assets in a smart contract hack, offering a sense of security and trust for both active and prospective collectors. The service will be available on nearly 80 digital asset marketplaces, including the KnownOrigin NFT marketplace.
According to Vano Basiladze, CEO of Wert, the NFT protection will be charged at 6% of the asset cost at checkout, with coverage calculated by the purchase price rather than the current market value. By offering a service that ensures some degree of protection against hacks and theft, Basiladze believes that mass adoption of NFTs and Web3 technologies in general will be perpetuated.
“Overall, any consumer looking to get into the NFT space wants to protect their money invested, and by offering them that sense of security, they are able to engage in Web3 on a deeper level with reduced risk,” Basiladze said.
Basiladze also noted that high-value NFTs, similar to traditional collectibles and art, are often bought by serious investors who are more worried about security than the average collector. By offering warranties, the NFT industry can become more open to professional collectors and investors.
The NFT market has exploded in recent years, with some projections estimating that NFT-related global transactions will skyrocket from 24 million in 2022 to nearly 40 million by 2027. In fact, a recent study from CoinGecko revealed that 25% of NFT owners have a collection of 51 digital assets or more. As such, the need for increased security and protection of digital assets is more important than ever.
In conclusion, the launch of Wert and Avata’s NFT warranty service represents a significant step forward for NFT security. By reducing the risk for both active and prospective collectors, the offering aims to encourage mass adoption of NFTs and Web3 technologies. With the NFT market continuing to grow, the need for increased security measures is paramount, and this warranty service is a welcome addition to the ecosystem.