In the fast-growing world of Web3, non-fungible tokens (NFTs) have become increasingly popular as they allow for unique ownership of digital assets, including music, art, and tweets. Unfortunately, the Web3 space has also seen a rise in the number of hacks and exploits, with over $320 million in losses reported in Q1 of 2023 alone. Consequently, many users are prioritizing the security of their digital assets, especially those who want to get involved in the Web3 space.
To address this security gap, Wert and Avata have recently launched a new NFT warranty service. The opt-in service will cover up to 90% of the value of compromised digital assets in a smart contract hack. This provides a sense of security and trust for both active and prospective collectors. This service will be available on nearly 80 digital asset marketplaces, including the KnownOrigin NFT marketplace.
The NFT protection service will be charged at 6% of the asset cost at checkout, and the coverage will be calculated based on the purchase price rather than the current market value. According to Vano Basiladze, CEO of Wert, this service will encourage the mass adoption of NFTs and Web3 technologies by providing some degree of protection against hacks and theft.
“Overall, any consumer looking to get into the NFT space wants to protect their investment, and by offering them a sense of security, they are able to engage in Web3 on a deeper level with reduced risk,” said Basiladze.
Moreover, the high-value NFTs, similar to traditional collectibles and art, are typically purchased by serious investors who prioritize security over other factors. Offering warranties can help the NFT industry become more welcoming to professional collectors and investors.
The NFT market has been growing rapidly, and some projections estimate that NFT-related global transactions will reach nearly 40 million by 2027 from 24 million in 2022. A recent study from CoinGecko also revealed that 25% of NFT owners have a collection of 51 digital assets or more. Hence, the need for increased security and protection of digital assets is more crucial than ever.
The new NFT warranty service launched by Wert and Avata offers a significant boost to the security of digital asset collectors in the Web3 space. The coverage of up to 90% of the value of compromised digital assets in a smart contract hack provides a sense of security and trust for both active and prospective collectors. By offering warranties, the NFT industry can become more welcoming to professional collectors and investors, leading to the mass adoption of NFTs and Web3 technologies. As the NFT market continues to grow, increased security and protection of digital assets are critical to its success.
