- There are several risks in the NFT market due to the high increase in cyber theft
- To combat the risks, several AI tools have been developed to pip safety and transparency in the NFT market
- The NFT market expanded without conventional regulatory oversight, much like decentralized finance (DeFi).
Blockchain analytics powered by AI seeks to shield NFT users from the security problems plaguing the NFT market.
The tech industry has been trying to regulate the uncontrolled development of nonfungible tokens (NFTs). This has resulted in undesirable costs. The NFT space has developed from pixelated punks to a recognized proof-of-ownership for both tangible and digital assets in less than ten years. The NFT market expanded without conventional regulatory oversight, much like decentralized finance (DeFi).
Even though the NFT market’s unabated growth allowed for true decentralization, the absence of standards had the same negative effects. These effects were on the industry as the DeFi space did when it was first emerging. An informed choice for NFT purchases becomes a difficult job. This is a result of the fragmented structure of the present NFT ecosystem. This is because it makes users confused by various marketplaces, varied collections, and inconsistent pricing methods.
There are also NFT-specific problems that can arise from having so many unchecked trades. This includes plagiarism, wash trading, and copy minting. Without appropriate standards and toolkits, the NFT ecosystem will continue to see malicious NFT owners. These owners use wash trading to inflate NFT values through phoney transactions, copy-minting another creator’s original creation, or engaging in other wrongdoings.
READ: How the African NFT market is surviving the crypto crash
Keeping the NFT market safe
To combat the ever-increasing security issues and threats, the NFT market needs to adopt a page from DeFi’s playbook. So far, blockchain analysis tools have enabled users to obtain instant, unbiased information about any DeFi protocol, token, or marketplace, effectively putting an end to the “Wild West” period of decentralized finance. The NFT space is well-positioned to identify security threats and provide users with a safe, accessible, and trustworthy experience, thanks to the emergence of artificial intelligence (AI) and machine learning (ML).
“While NFTs have been around for over seven years now, they were only recently recognized as one of the revolutionary technologies the world has seen,” noted Vijay Pravin Maharajan, the co-founder and CEO of its crunch, a team of data analysts and AI experts focused on blockchain technology. He added that, apart from acknowledgement and development, “this industry needs more trust and transparency in the form of accurate and accessible NFT insights.”
Wash trading tracked by AI-tools
The platform with AI-powered statistics displays data on possible wash trading activities. This happens over a range of time frames. Wash trading is when one or more traders purchase and sell an NFT to create an artificial demand that raises floor prices.
UnleashNFTs provide details on the number of suspected volumes and total washed value. They also provide the number of wallets that have been trading the NFT collection. This is in addition to fundamental information like the collection’s name and contract address.
Confusion and unfair pricing have been eliminated for DeFi customers. This is thanks to proper data visualization and trustworthy insights. It’s time to apply the same effective strategy to a system that is even more dispersed and high-quality. UnleashNFTs aims to grow the NFT market in a unique way. They do it without sacrificing accessibility and transparency by providing NFT users with a comprehensive perspective through user-friendly infographics, in-depth market reports, and a specific section for wash trading analysis.