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Glossary

Blockchain

Blockchain is a decentralized and distributed digital ledger that records transactions across a network of computers. It allows for secure and transparent data record-keeping, such as digital assets.

Token

A token is a digital representation of an asset or utility on a blockchain. It can be used for various purposes, such as representing ownership of a physical or digital asset or as a means of exchange in a decentralized marketplace.

Digital asset

A digital asset is a digital representation of a non-physical item of value that can be traded and stored electronically on a blockchain or other digital ledger. This can include digital art, virtual real estate, collectible items, and more.

Self-custody

Self-custody is a system in which the user has full control over their digital assets and private keys without relying on third-party custodians.

Smart Contract

A Smart Contract is a self-executing, decentralized agreement encoded on a blockchain that automatically enforces the terms and conditions between parties without intermediaries.

Ethereum

Ethereum is a platform based on blockchain that allows developers to create and deploy smart contracts and decentralized applications (dApps).

EVM

The Ethereum Virtual Machine (EVM) is a virtual machine that executes code for decentralized applications on the Ethereum blockchain.

EVM-compatible blockchain

EVM-compatible blockchain is a blockchain that can support and execute smart contracts using the Ethereum Virtual Machine

Gas

Gas is a fee required to perform a certain action on the EVM- blockchain, such as executing a smart contract or making a transaction. The cost of gas can vary based on network congestion and the complexity of the transaction being executed.

NFT

NFT (Non-Fungible Token) is a digital asset in the form of a smart contract that represents ownership of a unique item or asset, such as digital collectibles, artwork, or in-game items. Unlike fungible tokens like cryptocurrencies, each NFT is unique and cannot be replicated or replaced. NFTs are becoming increasingly popular in digital art and collectibles, as they allow creators and collectors to verify the ownership and authenticity of a digital item. In the context of NFT Protect, the ownership of an NFT is the subject of dispute, and jurors are tasked with determining the rightful owner based on the evidence presented.

Protocol

NFT Protect (hereafter referred to as the Protocol) is a decentralized insurance protocol designed to enhance the security of NFT ownership and transfer.

Protocol Fee

The Protocol Fee is the amount paid by the Original Owner during the insurance process to use the Protocol's services. This fee covers the cost of insuring the NFT and is collected when the NFT is insured.

Partner Protocols

Partner Protocols are decentralized applications and protocols that work with NFTs and have integrated NFT Protect's solution. These protocols may receive a portion of the Protocol Fee.

Original

The Original is the NFT, insured through the Protocol and stored in the Protocol's smart contract.

Original Owner

The Original Owner is the user who ensures the Original in the Protocol.

pNFT

The Protected NFT (pNFT) is a protected NFT, a token issued by the Protocol at the Original Owner's request, linked to the Original, and used as its replacement for daily use.

pNFT Owner

The pNFT Owner is the current holder of the pNFT who has the right to transfer, sell, or use it as a replacement for the Original in Partner Protocols. A pNFT may be received by the pNFT Owner either as a gift or as a part of a Bona Fide Transfer, which means a legitimate purchase made through a reputable platform at a fair market price or as part of an Insured Event, which includes Theft, Phishing Attacks, Protocol Breaches or receiving as a result of Sending to an Incorrect Address.

Bona Fide Transfer

A Bona Fide Transfer is a transfer of pNFT made in good faith without any indication of fraudulent or illicit activity and with no knowledge of any prior claims or disputes regarding the ownership of the pNFT. The transfer must be made through a well-known and reputable platform like OpenSea. It must not raise any suspicions, such as the price being significantly lower than the current floor price or any other unusual behavior. If the pNFT was granted as a gift, it is also considered a Bona Fide Transfer. The Decentralized Dispute Resolution Layer is a system that resolves disputes in a decentralized manner. It typically uses smart contracts and blockchain technology and is independent of centralized authorities.

Arbitrator

The Arbitrator is a third-party service or smart contract to resolve ownership disputes or related issues. NFT Protect uses the Kleros platform as an arbitrator to ensure a swift and fair resolution of disputes over token ownership.

Dispute

A Dispute is a situation in which the ownership or other aspect of the token is called into question and requires resolution by an Arbitrator. In the context of NFT Protect, a dispute may arise if a party claims ownership of the Original when the pNFT changes ownership. In the event of a dispute, the parties involved can submit evidence and arguments to the arbitrator. The arbitrator will review the case and make a ruling based on the available information. During the dispute, the ability to transfer the pNFT is locked until the process is completed.

Policy

The Policy is the set of rules and guidelines for the behavior of participants within the Kleros ecosystem. Its purpose is to ensure transparency, fairness, and impartiality in the resolution of disputes.

Juror

The Juror is an individual who participates in the dispute resolution process by reviewing evidence and rendering a Ruling on a Dispute according to the Policy. The Ruling is the decision made by the Arbitrator in a Dispute.

Burning

Burning is the process of permanently removing a token from circulation by sending it to a zero address or using other means to ensure its destruction. Once burned, the token is no longer valid and cannot be used or transferred. In the context of NFT Protect, burning a pNFT can occur either because of the Arbitrator's Ruling or by the Original Owner's decision (if the Original Owner is the current pNFT Owner). When a pNFT is burned in this manner, it invokes Ownership Restoration of the Original from the Protocol.

Ownership Adjustment

Ownership Adjustment is the process of transferring ownership of the Original from the Original Owner to the pNFT Owner through a smart contract function based on the Arbitrator's Ruling or the Original Owner's decision. During O.A., the pNFT is burned, and the Original is sent to the pNFT Owner if the Arbitrator's Ruling is in their favor or if the Original Owner decides to transfer ownership.

Ownership Restoration

Ownership Restoration is the process of restoring the ownership of the Original to the Original Owner through a smart contract function based on the Arbitrator's Ruling. During O.R., the pNFT is burned, and the Original is sent to the Original Owner if the Arbitrator’s Ruling is in their favor.

Insurance

Insurance is the process of registering the Original in the Protocol by the Original Owner, which involves paying the Protocol Fee and receiving pNFT as proof of ownership. The pNFT serves as a protected version of the Original and can be used for daily operations without risking the loss of the Original.

Insured Event

An Insured Event is an event in which the Original Owner loses control of pNFT due to specific circumstances covered by the Protocol, such as Theft, Phishing Attack, Protocol Breach, Sending the pNFT to an Incorrect Address, or other similar events, which the Arbitrator can verify. As a result, the pNFT must be burned, and the Original must be restored to the Original Owner through the smart contract function for dispute resolution based on the Arbitrator's Ruling.

Theft

Theft is an Insured Event in which an unauthorized transfer of digital asset ownership from one individual or entity to another occurs.

Phishing Attack

A Phishing Attack is an Insured Event in which an attacker, disguised as a trustworthy entity, attempts to trick a victim into giving up sensitive information, such as passwords or credit card numbers, by disguising themselves as trustworthy entities.

Protocol Breach

A Protocol Breach is an Insured Event that occurs when the smart contract of a Supported Protocol is compromised, leading to the theft of pNFT stored within the protocol. This may result in the loss of pNFT for the pNFT Owner and requires a dispute resolution process to determine the appropriate course of action for the affected parties. The Arbitrator must verify the breach and may require a detailed description of the vulnerability exploited to perform the hack, signed by the responsible parties, such as the NFT Protect team or the compromised partner, to establish the details of the breach and how it was exploited.

Sending to an incorrect address

Sending to an incorrect address is an Insured Event in which the Original Owner mistakenly sends pNFT to an address that is either invalid or does not belong to the intended recipient.

Evidence

Evidence is documents, links, or any other data that have value in the context of a Dispute and allows Jurors to make a fair Ruling. Acceptable evidence for a dispute regarding NFT ownership may include:
  • Blockchain analysis: Analysis of the blockchain to determine the origin and destination of the transaction, the wallets involved, the date, time, amount, and any other relevant information.
  • Chat logs or emails: If the loss of pNFT resulted from a phishing attack or social engineering, chat logs or emails with the attacker could be used to establish their identity and intent.
  • Screen recordings: If the loss of pNFT resulted from a scam, a screen recording of the interaction with the scammer could be used as evidence.
  • Screenshots: Screenshots of any relevant communication or activity related to the loss of pNFT, such as messages between the original owner and the party who allegedly took it.
  • Written confirmation: Documents confirming the off-chain transaction for transferring rights to a digital asset. For example, it can be receipts drawn up in any form and signed by both participants.
  • Security reports or Protocol breach post-mortem: If the loss of pNFT was the result of a protocol breach or hack, security reports (a detailed description of the vulnerability exploited to perform the hack, available in a publicly accessible format, such as a PDF or HTML document, and signed by the responsible parties, such as the NFT Protect team or the compromised partner) could be used to establish the details of the breach and how it was exploited.
  • Law enforcement reports: If the loss of pNFT has been reported to law enforcement, any relevant reports or documentation of the case may be used as evidence.
  • Any other relevant information: Any other information that may be relevant to the case, such as information about the platform where the theft occurred or any security breaches that may have led to the theft.

DID

DID is a decentralized Identity, a system for self-sovereign digital identity that allows users to control and manage their own personal data without relying on centralized authorities.

DID Provider

DID Provider is a service or application that allows users to create, manage, and verify their decentralized identities.

PoH

PoH is Proof of Humanity, a decentralized identity verification system that combines machine learning and crowdsourcing to verify a person's humanity.

User Registry

The User Registry is a smart contract or external service that registers users and tracks their identities, verifications, and statuses.

NFTP Coupons

NFTP Coupons are NFT Protect Coupons, a token that can be used to pay for services on the NFT Protect platform.