Tackling the NFT Market’s Challenge With Duplicates

With the top 10 marketplaces accounting for a volume of $4.7 billion in Q1 2024, NFTs have become a significant sector in the crypto market.

It’s not without reason; these unique digital collectibles provide their holders with real, verifiable ownership over their assets via the blockchain. At the same time, they empower artists to get fairly compensated for their work in the form of primary sales revenue and royalties. In fact, creators can seamlessly market their work to a global audience of collectors without necessarily relying on traditional publishers or sharing their profits with them.

But a crucial problem arises when the artwork, music, or other form of content represented by the NFT is plagiarized. In fact, it is such a huge challenge for the sector that OpenSea once stated that over 80% of the NFTs created with its free minting tool were plagiarized works, fake collections, and spam.

In this article, we will explore the current challenges of the NFT market and how they could be addressed by a blockchain-based watermark solution. Let’s get started!

What Is a Blockchain?

Before we take a deep dive into the NFT market’s ongoing challenges with plagiarism, let’s first start with the basics.

NFTs reside on the blockchain, which is a shared, immutable, and distributed ledger containing records in the form of a chain of blocks. On a public blockchain, everyone can transparently view, inspect, and audit transactions and other related data (e.g., wallet addresses, tokens, balances).

As most blockchains are public and permissionless, anyone can access the network without geographical, financial, or other restrictions or without needing approval from a central authority. All you need is an active internet connection and a device (e.g., a desktop computer, a laptop, tablet, or smartphone) to get started.

Unlike traditional servers, blockchains are decentralized. This means they are neither operated by a centralized entity like Amazon, Google, or another organization (or an individual) that has complete control over the network, nor is the data stored in centralized server farms. Instead, blockchains are governed by their communities and maintained by a decentralized network of validators who are responsible for securing the ecosystem.

As the same records are stored on millions of devices in a decentralized way, blockchains don’t have a single point of failure. This also makes the records that are stored on the ledger immutable, as no one has the authority to arbitrarily change or falsify the data that has already been processed into blocks by validators.

Secured by public-key cryptography, blockchains offer peer-to-peer (P2P) transactions between users, meaning they can transact cryptocurrencies without intermediaries. This makes transfers inexpensive and instantaneous (in most cases).

What Are NFTs?

Like standard (fungible) cryptocurrencies, the blockchain also powers non-fungible tokens (NFTs).

On the one hand, fungible digital assets like Bitcoin (BTC) and Ether (ETH) have a uniform value, as well as are divisible into smaller units and interchangeable with other tokens of the same value.

On the other hand, NFTs have a unique value based on their scarcity, characteristics, and user demand. They are one-of-a-kind and indivisible, meaning that you can only hold a full unit of an NFT, not a fraction of it. Moreover, they are irreplaceable by other tokens, even if those assets have the same value.

While fungible cryptocurrencies are meant to store and exchange value, non-fungible tokens represent a wide range of content, such as artwork, music, an in-game asset, or a concert ticket. As their most important feature, NFTs offer their holders complete, verifiable ownership over the items they represent via the blockchain.

For creators, NFTs offer an excellent opportunity to target a global audience and sell their work independently. All they need is a marketplace like OpenSea or Rarible, where they can mint and list their non-fungible tokens. Besides primary sales, most platforms also offer creators the chance to earn royalties when their work is resold on the secondary market.

The NFT Market’s Duplicate Problem

Blockchains, through immutable, transparent, decentralized, and highly resilient networks, provide an excellent tool for certifying and protecting the integrity of data. However, they are significantly limited regarding the information users can inscribe to the chain.

Here’s where NFTs come into the picture, offering all the information about transactions to verify ownership via the blockchain. However, this is not enough to prevent copyright infringement, plagiarism, and spam related to the actual content non-fungible tokens represent.

As a matter of fact, copycat projects could simply make a mirrored or near-identical version of the art behind popular NFT collections and sell them on marketplaces. ®†

Cases like the above continue to pose significant challenges for creators because the links between NFTs and the content they represent work only in one direction.

With ownership over an NFT, you can easily access the connected content by following the URL inside the metadata. However, when given only a piece of content, it is extremely challenging to identify whether there’s already an NFT representing the artwork. Thus, you can’t know whether the digital collectible you have just purchased is based upon a copyrighted item of an original creator.

The Watermarked Solution

Watermarked seeks to tackle the NFT market’s challenges with duplicates and copyright infringement with AI-based watermarks that can be applied to images, video, and sound. It is invisible and robust, so it’s difficult to find it and remove it from the content.

As the platform’s first use case, Watermarked establishes an inversed connection between NFTs and their content. This connection points back to the NFT to determine whether one is already registered for the artwork. Simultaneously, the platform helps creators protect their digital collectibles via watermarks before minting them on the blockchain.

Watermarked leverages its on-chain registry on Polygon to register protected NFTs and track them across multiple blockchains. Blockchain technology allows us to store data related to watermarked content in a decentralized way and without any risks of censorship.

Besides information about the NFT, such as the chain ID, the contract address, and the NFT ID, the registry also includes NFT minting and registration timestamps. All this data is stored on-chain with a link to the InterPlanetary File System (IPFS). As a result, the whole process becomes much more reliable and trustless than in a centralized database, where it is possible to manipulate the information related to NFTs’ content.

Besides identifying duplicates, a watermark is also an excellent solution to track the ownership and distribution of content through multiple distributors. This can come in handy when there’s a potential leak at a content distributor or streaming service, helping artists identify the source of the problem. To do that, a separate watermark can be utilized to identify each distributor or streaming service.

Protect Your NFTs and Identify Duplicates With Watermarked

With AI-based watermarks and an on-chain registry, Watermarked helps creators identify duplicates of their work and protect their NFTs against plagiarism and copyright infringement.

Currently, NFT market participants can access two core features on Watermarked.

The first one is the Check service, which you can use to verify whether an NFT’s content has been utilized elsewhere by uploading an image, video, or sound file. After that, Watermarked uploads the file to its database, checks it for a watermark, and notifies you about the result.

As part of a new feature, you can now also verify items without uploading a media file. Instead, it is enough to provide NFT metadata (e.g., a contract address and the NFT ID). This can help potential buyers verify the authenticity of an NFT’s underlying content.

In this case, Watermarked will check whether the image or video connected with this NFT is registered in its on-chain registry. This way, the user can verify whether it is a genuine NFT created by the original artist or a duplicate sold by someone other than its rightful creator.

At the same time, the Protect solution helps you protect your NFT’s content with a watermark through the below process:

1. The user uploads a media file to Watermarked or provides an IPFS hash or a URL to the image, as well as other details such as the name and description of the item.
2. Watermarked protects the item with an invisible watermark.
3. The platform mints the NFT on the user’s preferred blockchain (e.g., Polygon, Solana) and marketplace (e.g., Rarible). Optionally, the non-fungible token can be uploaded to IPFS.
4. As the last step, Watermarked registers the NFT in its on-chain registry.

You can check your watermarked NFTs, download watermarked media files, and inspect their respective details (e.g., the blockchain, contract address, metadata, and the date of the watermark) on the platform.

For both the Check and Protect solutions, Watermarked charges a small fee for each action, which is displayed transparently on the website.

Ready to combat duplicates and plagiarism on the NFT market?
Check out Watermarked now!