Online marketplaces selling digital art and collectibles are going strong these days despite major challenges like counterfeit forgeries and compliance regulations. The blockchain’s Real World Assets (RWA) provide solutions to make transactions easier while verifying authenticity and improving liquidity.  

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Here’s how RWA could solve the following issues: 

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RWA on the Blockchain Can Verify Authenticity and Accurately Identify Provenance 

Sellers are always facing questions about the authenticity the digital art and collectibles they’re offering for sale. Because these assets have been created digitally there is a substantial risk of forgery and/or unauthorized replication. These are the concerns that make buyers wary.  

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Using blockchain technology permanent records can be made for each and every piece of digital art by tokenizing each item as a non-fungible token or NFT. This way the item’s metadata

along with a full transaction history is permanently recorded on the blockchain. Therefore, the authenticity information can never be changed or tampered with in any way. Venly solutions allows you to issue digital certificates of authenticity, which would be permanently kept on the blockchain. The advantage of this is that potential buyers can easily verify the authenticity of any piece of digital art they’re interested in, which builds confidence.

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Unlike traditional artwork, digital art can easily be replicated and distributed, which makes it very difficult to trace the original source or owner. Therefore, maintaining an accurate record of the item’s provenance is nearly impossible. 

The ledger on the blockchain can be used to record and keep a complete, accurate and transparent record of each digital artwork’s provenance with RWA. Each transaction, starting with its creation and all subsequent sales are permanently recorded on the blockchain. This gives interested parties a clear and unchangeable ownership history. Any change in ownership and transfer of royalties can automatically be recorded on the blockchain using smart contracts. Updates are then made in real time, which allows artists to be compensated correctly each time their artwork is resold. 

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Low Liquidity and Fluctuating Values Can be Resolved with RWA

Low liquidity plagues digital assets, including artwork and collectibles, which is discouraging to both buyers and sellers because it makes the asset hard to buy or sell quickly. This definitely affects investor confidence, which in turn affects the market.

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To add liquidity to the market Venly Web3 tools can be used to effectuate cross-platform trading among multiple online marketplaces for digital art. Cross-platform integration would increase liquidity by making it easier for people to buy and sell digital assets. By making transactions seamless, trading is easier, which helps the market by increasing confidence among investors.

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Another big challenge is figuring out the true value of digital art and collectibles. The subjective nature of determining the valuation makes the market volatile. A standardized way of assessing the value is needed, otherwise it can fluctuate up and down depending on trends and guesses, creating doubt among buyers and sellers. 

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RWA solutions from Venly provides users with the tools and analytics to determine how much a piece of digital assets are worth, which reduces uncertainty while stabilizing prices. Once you’ve built the infrastructure with our help your platform will be able to analyze market trends, provide historical price information, and valuation models that will give you fair market assessments that are more accurate and consistent.

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Keeping Digital Assets and User Information Secure

Platforms selling digital art and collectibles are being targeted by hackers, which means that security must be a top priority. Your platform’s reputation could be ruined if hackers were able to breach your security and steal digital assets, resulting in financial losses. 

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With RWA you will be all set up with advanced security protocols to safeguard digital assets and user information from getting into the hands of unsavory hackers. These include end-to-end encryption, so unauthorized hackers cannot access the information. Multi-factor authentication would also be implemented, and there would also be routine security audits on a regular basis. These are the measures that must be taken to maintain a safe and secure marketplace for all users. 

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Data integrity is also of utmost importance, so keeping user data and transaction information secure is vital. Hackers are skilled at finding and exploiting the smallest of vulnerabilities, causing data breaches that lead to financial fraud.  

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Venly offers blockchain solutions for securely storing all data along with data integrity protocols to make sure that all user data is safeguarded, as well as transactions. Databases are all encrypted and information is securely stored on the cloud, protecting user data and transaction integrity. We also have SOC 2 and ISO 27001 certifications, and our operations are fully GDPR compliant.

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Compatibility Across Platforms is Vital to Growth of the Industry

Marketplaces for digital art and collectibles must be compatible across platforms and digital wallets. Without interoperability users are being denied access and market reach is limited, hindering the industry’s growth.  

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Venly provides developers with Software Development Kits (SDKs), so that the code they write once can be deployed across PC, mobile, and web platforms with very few changes. With Venly’s Market APIs, digital art marketplaces are able to easily integrate with a variety of digital wallets and blockchain platforms. This simplifies the process of connecting different systems together, reducing the overhead for developers. Venly’s NFT contracts are also based on the most popular digital token standards.

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Maintaining Compliance with Regulatory and Legal Requirements

Trying to stay current on the complex regulatory and legal landscape for digital assets is no easy matter. Marketplaces are tasked with maintaining compliance with all financial regulations including anti-money laundering (AML) laws, and know your customer (KYC) requirements, which takes a lot of time and resources. 

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Compliance tools provided by Venly are extremely helpful to marketplaces struggling to comply with AML, KYC, and all other regulatory requirements. It is of utmost importance that every transaction be transparent and legal. These RWA solutions simplify compliance processes, easing the burden on digital marketplaces.

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The intellectual property (IP) rights of the creators of digital art must be protected for them to receive the compensation they are due. However, this is no easy task because it can be very complicated. Preventing unauthorized distribution or use of digital artwork is an ongoing issue. 

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Implementing RWA solutions can safeguard IP rights, like smart contracts that ensure that creators of digital art automatically receive their royalty payments. It is critical that platforms ensure that artists are financially compensated and that their legal rights are enforced.

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Teaching New Users How to Navigate and Conduct Transactions on Digital Art Platforms while Building Trust

New users often have a difficult time navigating digital art marketplaces, using a digital wallet, and handling transactions in cryptocurrencies. 

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With RWA Venly offers user-friendly interfaces so that the process of buying and selling digital art and collectibles is quite easy, which makes the platform accessible to a far wider audience. Furthermore, by providing the necessary educational tools, which include webinars, guides, and tutorials, new users can quickly learn to use the platform along with the benefits of investing in digital art. 

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Building trust among traditional art collectors and investors can be challenging. Persuading new users to trust digital art platforms means overcoming their natural skepticism about the value of digital assets and how secure they are. 

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When Web3 art and blockchain art are being showcased on art platforms this goes a long way toward building trust among new users and those who typically invest in and/or collect traditional artwork. In order to overcome the skepticism, examples of the robust security measures being taken along with market data that transparently shows the value of digital assets can be shown. 

Moreover, by explaining all the educational resources available and how blockchain solutions ensures the authenticity and security of digital art, these concerns should fade along with their hesitation about investing in digital art. 

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Recent Reports Highlighting the Increasing Investment in Digital Art and Collectibles

Reuters reported that according to NonFungible.com in Q1 2021 alone the value of transactions involving NFTs exceeded $2.5 billion. This clearly shows a bourgeoning interest and investment in digital art and collectibles, including blockchain art. Due to the growing adoption of blockchain solutions and technology plus digital asset and art tokenization, MarketsandMarkets expects the global market in digital art to reach $3.4 billion by 2025.  

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Conclusion

Many of the difficulties faced by digital art and collectibles marketplaces can be resolved with Real World Assets on the blockchain. By incorporating blockchain technology, these types of platforms can make transactions easier, confidently ensure authenticity, improve liquidity, and maintain compliance with regulatory requirements. All signs are that the digital art market will evolve toward the adoption of RWA solutions, like art tokenization, and minting art. What this means is that blockchain solutions will be what puts you ahead by allowing you to provide optimum value and security. 

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For more information on how RWA can transform your digital art platform, [click here].

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