NFT guarantees can help mass adoption of the technology, says Web3 boss
The Web3 space has seen its fair share of exploits in recent times with more than $320 million exploited by hackers in the first quarter of 2023 alone. For many users, especially potential users, having security for digital assets is a top priority.
A new nonfungible token (NFTs) escrow service from Web3 payment provider Wert and InsurTech service Avata is trying to troubleshoot the gap in asset security for collectors both active and prospective.
According to the announcement, the opt-in guarantee for NFTs will cover up to 90% of the value of the digital assets of all NFTs compromised in the hands of a smart contract hack.
Cointelegraph spoke to George Basiladze, co-founder and CEO of Wert, who said that a solution like this helps bridge the “trust” gap, while providing necessary protection to a number of collectors.
“[NFT warranties] will provide a sense of security and trust, which will encourage more non-native crypto users to join the Web3 space with minimal risk, making it more attractive to a wider audience.”
The service will be available on nearly 80 digital asset marketplaces, including the KnownOrigin NFT marketplace. According to Basiladze, the NFT protection will be charged at 6% of the asset cost at checkout and the coverage will be calculated on the purchase price rather than the current market value.
Related: Utility and long-term profit main reasons for NFT purchases: CoinGecko study
Basiladze believes that providing a service that ensures some degree of protection against hacks and theft will help sustain mass adoption of NFTs and Web3 technologies in general.
“Overall, any consumer looking to get into the NFT space wants to protect their invested money, and by offering them that sense of security, they are able to engage with Web3 at a deeper level with reduced risk. “
He pointed out that especially high-value NFTs, like traditional collectibles and art, are often bought by serious investors who are more often concerned about security than the average collector. Guarantees have the potential to make the industry “more open to professional collectors and investors.”
A recent study by CoinGecko showed that 25% of NFT owners have a collection of 51 digital assets or more. Some studies have estimated that NFT-related global transactions will skyrocket from 24 million (2022) to nearly 40 million by 2027.
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