In response to the growing need for digital asset protection, web3 payment provider Wert and insurtech service Avata have introduced a groundbreaking NFT warranty service designed to safeguard collectors’ investments against smart contract hacks.
In the first quarter of 2023, the web3 domain experienced a series of cyber attacks, with hackers exploiting more than $320 million. Ensuring the safety of digital assets is of paramount importance, especially for potential users.
Web3 payment provider Wert, in collaboration with insurtech service Avata, has introduced a novel nonfungible token (NFT) warranty service to address the security concerns of both existing and potential collectors.
The announcement stated that the optional NFT warranty would cover up to 90% of the digital asset’s value in the event of a smart contract breach.
In a recent interview, George Basiladze, Wert’s co-founder and CEO, emphasized that such a solution helps bridge the “trust” gap while providing essential protection for a diverse group of collectors.
Basiladze asserted that offering warranties for NFTs would cultivate a feeling of safety and confidence, enticing a greater number of non-native cryptocurrency users to venture into the Web3 realm with reduced risk. This approach broadens the appeal to a more diverse audience.
The service will be available on approximately 80 digital asset platforms, encompassing the KnownOrigin NFT marketplace. Basiladze clarified that the cost of NFT protection would be 6% of the asset’s price upon acquisition, and the coverage would be based on the purchasing price, not the prevailing market value.
According to Basiladze, providing a service that guarantees a certain level of protection against hacks and theft will contribute to the widespread adoption of NFTs and web3 technologies in general.
He highlighted that high-value NFTs, akin to traditional collectibles and art, are typically acquired by serious investors who are often more concerned about security than the average collector. Warranties can make the sector “more open to professional collectors and investors.”
A recent CoinGecko survey revealed that 25% of NFT owners possess a collection of 51 digital assets or more. Some research predicts that global NFT-related transactions will surge from 24 million in 2022 to nearly 40 million by 2027.