What you need to know about NFTs?
NFTs or non-fungible tokens have become the latest trend across the globe with common people to celebrities jumping on the bandwagon. What started off as a creative fad is now turning into a multimillion-dollar industry with these digitized artworks being sold for astronomical amounts. So how did NFTs come into being?
It all started in 2017 when an American studio by the name of Larva Labs created CryptoPunks, which was a series of digital characters that could be traded as NFT’s. In order to sustain their value and eliminate the possibility of replication, these 10,000 CryptoPunk characters were digitized into NFTs thus preserving their uniqueness.
This has led to an instant boom in the idea of NFTs with marketplaces dedicated to the trade of these assets by laymen and even millionaires. NFTs can really be anything digital (such as drawings, music), but a lot of the current excitement is around using the tech to sell digital art. Artists are converting their record-breaking albums to NFTs which have already been sold for millions of dollars. Still not sure what the big deal is with NFTs?
Let’s say you created an artwork such as a painting that is original to you but in reality, it is not gaining the attention it deserves. When you convert it into an NFT it becomes a digital asset that holds a unique value that cannot be replicated and you can also gain a larger audience across the globe.
One of the most expensive pieces of NFT was the Pak piece by Pak, formerly known as Murat Pak, who is a digital artist, cryptocurrency investor, and programmer. The Merge (by Pak) officially became the most expensive NFT ever sold on December 2, 2021, with almost 30,000 collectors pitching together for a total cost of $91.8m.
Despite the major attraction that NFTs have been receiving, they still remain incredibly volatile. OpenSea, one of the largest marketplace, has witnessed multiple hacks in the past year with over $780,000 of value lost. This brings into the picture the imperative need for insurance. The theft of $2.2 million in NFTs from an art gallery owner shows the vulnerability of buyers as a broader set of consumers get involved in the field. The NFT marketplace (just as any other digital asset ) is also prone to hacks & cybercrime by hackers as more and more loopholes are discovered and leveraged by malicious third parties.
As a DeFi insurance marketplace, CoverCompared is always on the lookout to expand our boundaries. We are offering a plethora of insurance policies for gasless purchasing at incredibly affordable rates and are looking forward to exploring insurance for NFT marketplace soon.
Insurance is an imperative need whether it be in regard to conventional coverages (such as health, travel, life) or in the virtual world, with technology introducing new avenues that require protection. CoverCompared is on it as we aim our efforts at maximizing protection for our users by offering varied insurance policies at rates that do not require consumers to break their banks.
CoverCompared is the First DeFi insurance marketplace for the global crypto ecosystem. We aim to lower transactional and administrative costs of insurance policies and coverage while providing high-value, cost-effective insurance products bought using a host of cryptocurrencies.
Our platform will be connecting users with multinational insurance providers for all global insurance products such as crypto-related protection, health, life, and travel policies. The platform will include a frictionless insurance marketplace experience that incorporates next-generation blockchain technology and tokenized incentives.