There have been quite a few exploits in the Web3 space, with hackers taking advantage of more than $320 million in funds in the first quarter of 2023 alone. For many users, especially potential users, the security of digital assets is a top priority.

A new non-fungible token (NFT) warranty service from Web3 payments provider Wert and InsurTech service Avata is seeking to address gaps in asset security for active and potential collectors.

NFT’s opt-in guarantee will cover up to 90% of the digital asset value of any NFT compromised in the hands of a smart contract hacker.

George Basiladze, co-founder and CEO of Wert, said:

“[NFT collateral] will provide a sense of security and trust that 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. NFT protection will be charged at 6% of the cost of the asset at checkout, and coverage will be calculated based on the purchase price rather than the current market value.

Providing services that ensure a level of protection against hacking and theft will help lead to widespread adoption of NFTs and Web3 technology in general.

“In general, any consumer looking to enter the NFT space wants to protect their investment funds, and by providing them with that sense of security, they are able to participate in Web3 at a deeper level while mitigating risk.”

High-value NFTs in particular, similar to traditional collectibles and artworks, are often purchased by serious investors who are more concerned about security than the average collector. Guarantees have the ability to make the industry "more open to professional collectors and investors."

A recent CoinGecko study shows that 25% of NFT owners own a collection of 51 or more digital assets. Global NFT-related transactions will surge from 24 million (in 2022) to nearly 40 million by 2027.