AI-based tools bring security and transparency to the NFT market
The unhinged growth of non-fungible tokens (NFTs) has come with unwanted costs, and the tech sector is stepping up to fix it. In less than a decade, the NFT space has expanded from pixelated punks to an established proof of ownership for digital and physical assets. Like decentralized finance (DeFi), another subset of the crypto industry, the NFT market grew without traditional regulatory oversight.
While the uninterrupted expansion enabled true decentralization across the NFT ecosystem, the lack of standardization caused the same negative effects that the DeFi space faced in its infancy. The fragmented structure of the current NFT ecosystem leads to confusion for users between different marketplaces, different pools and inconsistent pricing methods – making an informed decision for NFT purchases a complex task.
Having so many uncontrolled transactions also leaves the door open to NFT-specific problems, starting with plagiarism, laundering and counterfeiting. Without proper standards and toolsets, the NFT ecosystem will continue to see malign NFT owners use wash trading to artificially inflate NFT prices via fake transactions, copy another creator’s original work, or engage in other malpractice and foul play.
Keeping the NFT market safe
The NFT ecosystem needs to take a leaf out of the DeFi playbook to hold its own against the ever-growing security issues and threats. Blockchain analytics tools have so far helped users get instant, unbiased information about any DeFi protocol, token, or marketplace, effectively ending the “Wild West” era of decentralized finance. With the rise of artificial intelligence (AI) and machine learning (ML), the NFT space is well positioned to detect security threats and provide users with a safe, accessible and reliable experience.
“While NFTs have been around for over seven years now, they were only recently recognized as one of the most revolutionary technologies the world has seen,” noted Vijay Pravin Maharajan, co-founder and CEO of bitsCrunch, a team of data analysts and AI experts focused on blockchain technology. He added that apart from recognition and development, “this industry needs more trust and transparency in terms of accurate and accessible NFT insights.”
Using AI, bitsCrunch recently launched an NFT analytics and forensics platform called UnleashNFTs to equip users and creators with reliable insights into the NFT market, including NFT marketplaces and fast-growing collections. The in-depth analysis, research and statistics on the NFT ecosystem found on UnleashNFT’s platform aims to help users make informed decisions for every NFT transaction. Commenting on the non-stop innovation in the NFT ecosystem, Maharajan said:
“The innovation in the space is encouraging and we hope to see many more positive developments and new use cases of NFTs with increasing confidence in robust threat mitigation methods.”
By providing accurate blockchain analytics on an easy-to-use dashboard, UnleashNFTs aims to protect NFT creators and traders from malicious actors, exploiters and other security threats targeting the market.
Wash trading activity tracked by AI
The AI-powered platform displays statistics on potential laundromat activities in varied timeframes. Wash trading occurs when one or more traders buy and sell an NFT to create an artificial demand that results in higher floor prices.
Source: Unleash NFTs
Apart from basic information such as the NFT collection name and contract address, UnleashNFTs also reveals the number of suspect volumes, total laundered value and how many wallets have traded with them.
Proper data visualization and reliable insights have solved the confusion and unfair pricing for DeFi users. Now it is time to repeat the same winning formula with an even more fragmented and qualitative ecosystem. By providing NFT users with a holistic view with easy-to-use infographics, in-depth market reports and a dedicated wash trade analysis section, UnleashNFTs aims to expand the NFT market without losing accessibility and transparency.
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