According to a new NFT warranty service, protecting valuable collectible digital assets can promote “a sense of security and trust” and attract new users.
In the first quarter of 2023, hackers took advantage of more than $320 million in the Web3 area. Securing their digital assets is a top concern for many users, especially those who want to use them.
NFT warranty service offers sense of security
A new warranty service for nonfungible tokens (NFTs) from Web3 payment provider Wert and insurtech service Avata aims to close the asset security gap for both current users and those who want to start.
According to the announcement, the opt-in warranty for NFTs will cover up to 90 percent of the value of the digital assets for any NFTs that are compromised as a result of a smart contract breach.
George Basiladze, co-founder and CEO of Wert, who stated that a solution such as this helps bridge the “trust” divide while providing collectors with the protection they require. “[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 appealing to a broader audience.”
Nearly 80 digital asset marketplaces, including the KnownOrigin NFT marketplace, will offer the service. According to Basiladze, the NFT protection fee will be 6% of the asset’s purchase price, and coverage will be based on the asset’s purchase price rather than its current market value.
According to Basiladze, providing protection against hacks and theft through a service could potentially facilitate the widespread acceptance of NFTs and Web3 technologies.
“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.”
He noted that especially valuable NFTs, similar to conventional collectibles and art, are frequently purchased by serious investors who are typically more concerned with security than the average collector. Warranties can make the industry “more open to professional collectors and investors.”
A recent study by CoinGecko revealed that 25 percent of NFT holders own 51 or more digital assets. According to some studies, the number of global transactions involving NFTs will surge from 24 million in 2022 to nearly 40 million in 2027.
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