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Can NFTs be insured, and who carries the risk?

Nike and RTFKT launched Nike CryptoKicks in the beginning of the year which is a collection of NFT sneakers called the “RFTKT X Nike Dunk Genesis,”. Owners can personalize these sneakers using ‘skin vials’ from different designers by adding new patterns and effects such as flashing lights and floating swooshes. Some of the NFT sneakers have already fetched more than $100,000. With so much spending in the NFT space, the biggest question that needs to be answered is ‘Can NFTs be insured?’

Nike CryptoKicks

The Past and Present

The first NFT-Quantum was published in 2014, but the NFT world has gained a lot of traction in the past year. The Merge created by an anonymous digital artist Pak was sold for a record-breaking $91.8 million in December’21, making it the most expensive Non-Fungible token (NFT) transaction to date. Beeple’s latest masterpiece artwork was sold for $69 million. 

The Merge

According to NFT stats compiled by Chainalysis Inc., the NFT marketplace grew to almost $41 billion in 2021, closing in on conventional art sales. 

The Scam Game

According to a report in Decrypt, the designers of the Big Daddy Ape Club scammed investors out of $1.13 million, making it the largest ‘rug pull’ in Solana blockchain’s history.

Recently, an attacker hacked into the Instagram account of the Bored Ape Yacht Club (BAYC) and stole about $3 million in NFTs. The hacker used a phishing link to steal tokens from victims’ cryptocurrency wallets. 

Non-Fungible Tokens can’t be traded interchangeably due to their unique numbers and codes. Because NFTs are so expensive, hackers and scammers have been actively eyeing the NFT world for their monetary gains. For buyers, digital security has become a serious concern.

Ensuring digital assets is an absolute necessity now, so the question here is whether NFTs can also be insured? The answer is, yes. Buyers may get compensated for fraudulent activities in the following situations:

a)In case, the private key is lost by the owner.

–When an NFT is created, it has dual keys: private and public. The blockchain ledger maintains the public key whereas the private key acts as proof of ownership.

b)When scammers sell replicas and fake digital assets.

c)Damages caused by intervention on the blockchain.

What’s happening in the NFT Insurance space?

Coincover provides corporate and consumer protection for NFTs through an insurance-backed solution. The company protects its partners’ wallets and the NFTs they possess from hacking, phishing, and other illegal activity, while also providing an insurance-backed guarantee in the event that something goes wrong. This is in addition to their disaster recovery service, which is a backup key recovery service that allows NFTs to be recovered in the event of lost passwords.

Due to increased demand from NFT holders seeking security against hacking and theft, Hong Kong-based virtual insurer OneDegree has teamed up with Munich Re to insure digital assets.

Recently, Amulet has secured $6m in its first funding round to provide insurance coverage in the Web 3.0 world which includes NFTs as well. The first Rust-based decentralized finance (DeFi) insurance protocol will utilize Solana’s PoS network to provide insurance service and stable returns. Using its unique Protocol Controlled Underwriting and Future Yield Backed Claim mechanisms, the firm will reduce the risk for underwriting capital providers.

The Challenges

A report by Technavio predicts that the NFT market will grow by $147.24 billion from 2021 to 2026 at a CAGR of 35.27%. With this growing demand for NFTs, there is a pressing need for NFT protection in the virtual world. Ensuring an NFT would be very different from insuring a conventional product or service. Insurers have three key challenges that they need to address when it comes to insuring NFTs:

  1. Uncertainty is involved in the valuation of NFTs since there isn’t any fixed market price. 
  2. Lack of structured and unified legal framework for ensuring NFTs.
  3. Ambiguity in the scope of the risks associated with NFTs is compounded by the fact that technology is evolving at a rapid pace.

The Road Ahead

The dynamics of the NFT market has changed in the past few months. After witnessing a fall in the NFT prices, user expectations have also changed dramatically where NFT utility is the latest lookout for the NFT customers. One of the most common utility is NFT being used as a gaming asset. Be it an art NFT or utility NFT, its loss may have serious repercussions not just for the owner, but also for the entire ecosystem, as NFT may lose its value if it is not secured. Open Sea – the world’s largest NFT marketplace lost $1.7 million worth of NFTs due to a phishing attack. A Bengaluru-based caricature artist found that one of his artworks was listed on Open Sea, without his knowledge. The media and insurance companies have been paying close attention to massive losses like these. NFT owners and creators will seek insurance to protect them as they become more aware of the risks involved in owning digital assets. With pioneers such as Coincover and Amulet leading the way, it’d be intriguing to see how the development unfolds in the NFT insurance space.

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What If the Sun Took a Day Off?

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Ever wondered what life would be like if the Sun took a day off? Picture waking up to an Earth shrouded in darkness, where temperatures drop dramatically within hours, plunging the planet into an icy chill. Plants, deprived of sunlight, would halt photosynthesis, leading to a food production crisis. Our reliance on renewable energy would face a sudden halt, causing widespread blackouts and chaos in cities across the globe.

A day without the Sun would throw our world into chaos! Luckily, that’s never going to happen (at least in our lifetime!). But this thought experiment underscores the Sun’s critical role in our lives and highlights why harnessing solar energy is so vital. While we’re increasingly turning to solar power, we are still missing out on capturing a massive amount of solar energy that falls on Earth every single day.

How Much Solar Energy Are We Missing Out On?

Every day, the Earth receives about 173,000 terawatts of solar energy from the Sun—more than 10,000 times the world’s total daily energy consumption. Despite this abundance, we only capture a tiny fraction of this energy. In 2023, solar energy accounted for just 4.5% of global electricity generation—a huge opportunity waiting to be tapped.

If we could capture just a small percentage of the Sun’s energy, we could power the entire world many times over. The total solar energy that hits the Earth in just one hour could meet the world’s energy needs for a full year. Yet, due to limitations in solar panel deployment, technology efficiency, and energy storage, the vast majority of solar energy goes unused each day.

As we improve solar technology and infrastructure, capturing more of this energy becomes not just a possibility but a necessity for a sustainable future. Let’s dive into how cutting-edge technology is making solar energy more accessible and efficient, helping to turn this untapped potential into real, usable power.

How Tech Makes Solar Adoption Easier

Customer-centric technology is revolutionizing the way we adopt solar energy. Imagine an app that allows you to simply point your smartphone at your house to estimate how many solar panels you need, their ideal placement, and the energy they can generate.

Here are the key benefits of this innovative approach:

  • Precision: By capturing images of your property through satellite, the app calculates the optimal placement of solar panels for maximum energy production. Studies have shown that precise placement can increase efficiency by up to 20%.
  • Customer Engagement: Users receive real-time insights into their energy production, helping them understand their solar power system better, whether they’re using Tesla solar panels, solar power generators, or even solar attic fans to optimize home energy usage
  • Seamless Experience: With user-friendly interfaces, consumers can easily monitor their solar systems remotely and receive updates on their energy output. This accessibility is crucial for encouraging the wider adoption of solar technologies.

The Tech-Driven Shift Toward Sustainability

As solar technology evolves, so do the solar panels themselves. Innovations like Tesla solar roof systems, flexible solar plates, and bifacial panels are redefining what’s possible in renewable energy. Even smaller systems—such as portable solar generators and solar air conditioners—empower homeowners to harness solar power efficiently.

Photovoltaic (PV)  panels, the cornerstone of solar energy, have seen incredible advancements, now boasting efficiencies of up to 22%. This means fewer panels are needed to produce more energy, making solar energy more effective for a wide range of applications, from solar shingles to off-grid systems.

Moreover, the push towards cradle-to-cradle sustainability is reshaping the industry. New solar panels are being designed with recyclability in mind, reducing their environmental footprint. Innovations in recycling technology now recover up to 95% of materials from end-of-life panels, ensuring that even the oldest solar systems contribute to a greener future.

While solar technology continues to advance, solar panels themselves are becoming more efficient and environmentally sustainable. Innovations such as systems, flexible solar plates, and bifacial solar panels are pushing the boundaries of what’s possible in renewable energy. Even smaller systems like portable solar generators and solar air conditioners are empowering homeowners to tap into the power of the Sun efficiently and sustainably.  Photovoltaic (PV) panels, the cornerstone of solar energy – now boast efficiencies of up to 22%​. This means a smaller array of solar panels for home or commercial use can generate more electricity. This makes solar energy systems more appealing and effective for various applications, from solar roof shingles to off-grid solar systems.

Moreover, the move toward cradle-to-cradle sustainability—where solar panels are built from materials that can be easily recycled—has gained traction. This reduces the environmental footprint even further. Innovations in recycling can recover up to 95% of materials from end-of-life panels, According to PV Cycle​, with room for improvement in recycling.

Making Solar Affordable and Accessible

Historically, one of the biggest barriers to solar adoption has been the cost. But things are changing fast. Innovations in financing models, such as Power Purchase Agreements (PPAs) and solar loans, have significantly reduced the financial burden of installing solar systems. According to the Solar Energy Industries Association (SEIA), the average cost of solar installation has dropped by over 70% in the last decade.

Couple that with federal and state incentives like the Investment Tax Credit (ITC), which provides a 30% tax credit on solar installations, and solar energy is more affordable than ever. Net metering programs, which allow homeowners to sell excess energy back to the grid, further enhance savings, making solar not only accessible but also financially rewarding.

Conclusion

The future of solar energy goes far beyond rooftop panels—it’s about making the entire solar experience intuitive, accessible, and sustainable. With smart apps and tech-driven tools, consumers can now manage their solar energy systems with just a few taps on their phones, making the shift to green energy simpler and more engaging.

At Mantra Labs, we’re at the forefront of this solar revolution. We’ve helped some of the world’s largest solar providers develop cutting-edge, customer-friendly solutions. Our mobile apps allow users to estimate solar panel needs, monitor system performance, and even track their environmental impact—all from the convenience of their smartphone.

Together, with innovative tech and a commitment to sustainability, we’re building a future where solar energy isn’t just an option—it’s the smarter, more accessible, and greener solution for everyone.

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