What Is an NFT Vault?
Jonathan Barbone
Sep 23, 2022
4 min read

What Is an NFT Vault?

When tokenizing an asset, an NFT vault is just as important as the blockchain itself

What Is an NFT Vault?

Monetizing one’s property and collectibles with NFT tokenization can be lucrative, but it requires more than the blockchain. Since the value of each token depends on a physical asset, NFT marketplaces must guarantee that each item is authentic and its condition will not degrade over time. For these reasons, appraisal and vaulting solutions have become essential components of NFT trading.

But what is an NFT vault, and how can brands and asset holders benefit from them? To answer these questions, we’ll explore the infrastructure behind asset tokenization that authenticates the value of every token in an NFT property marketplace.

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What Is an NFT Vault?

How Do NFT Vaults Differ From Other Storage Options?

What Is the Process of Securing Assets?

How Do NFT Vaults Ensure Asset Security?

Tokenizing Your Property? Be Certain It’s Protected

What Is an NFT Vault?

An NFT vault is a secured facility for holding physical assets that back the value of associated NFTs. Depending on the size and nature of the assets, these vaults can take many forms:

  • Most NFT vaults are highly secured warehouses that maximize space by stacking individually-owned crates in organized grids.
  • Smaller assets, such as collectible trading cards, might be held in facilities with an array of lock boxes and safes.
  • Facilities can also use repurposed bank vaults with large metal doors and updated digital security systems.

Whatever the design, NFT vaults offer a higher level of protection than personal safes or storage containers. Their security standards are typically comparable to vault services provided by private security companies.

How Do NFT Vaults Differ From Other Storage Options?

NFT vaults aren’t so different from traditional vaulting solutions. Both offer a secure location to store valuable property the owner won’t need on hand for an extended period. When someone stores their property in an NFT vault, they tokenize the physical asset and receive an NFT representing its value. The asset holder can sell or trade this token on NFT marketplaces.

As the monetary value of the asset increases, its preservation within an NFT vault guarantees a corresponding increase in value for its token or tokens. If someone wishes to claim an item from an NFT vault, they must surrender the associated token to be burned in order to submit a delivery request. (If the token is fractionalized, the majority token holder can buy out any remaining NFTs to claim the asset).

This approach is an ideal solution for trading or showcasing collectibles and rare items that are difficult to display publicly. It also enables token owners to easily trade verified ownership without the potential risks and expense of transporting the asset itself. To find out even more about the benefits of tokenizing your valuable assets, partner with Dibbs today.

What Is the Process of Securing Assets?

The precise vaulting process can vary depending on the NFT marketplace or provider. For example, some NFT collectible companies own a private facility for securing items, while others hire third-party companies such as Brinks to manage storage. In most cases, however, asset vaulting follows these steps:

  • Create a listing: The asset owner prepares a listing for their property on an NFT marketplace or collectible service.
  • Appraise the asset: The property’s condition and value must be appraised prior to vaulting. Either the NFT marketplace or a third-party appraiser can conduct the appraisal.
  • Surrender the asset: The asset can then be surrendered to the NFT marketplace for secure storage.
  • Secure and tag the asset: The item will usually be wrapped and placed in a crate with padding for protection. This crate receives a unique identification number for easy retrieval.
  • Store the asset: Finally, the asset is stored in a secure and controlled location where vault employees can maintain its appraised condition indefinitely.

How Do NFT Vaults Ensure Asset Security?

Unlike home storage solutions, NFT vaults typically benefit from 24/7 security protections. Depending on the facility, this might include an in-house security team, video surveillance, biometric access scanners, or any combination of the above. Along with these physical protections, NFT vaults are typically located in restricted locations that only authorized employees can access.

Along with these benefits, NFT vaults include environmental protections such as temperature, humidity, and air quality controls. These measures protect the assets from extreme heat or cold, excessive moisture, and exposure to other harmful elements.

Of course, no protective measures are infallible, which is why the most reputable NFT vaults also provide insurance. The NFT marketplace or vaulting service typically insures the physical asset in case of theft, damages, or natural disasters.

Tokenizing Your Property? Be Certain It’s Protected

The tokenization of physical assets holds great potential, but it can only succeed when the assets behind each token are safe and verified. As a result, NFT vaults are as crucial to the NFT industry as the blockchain itself. That’s why Dibbs offers tools that support asset holders, combining the power of an all-new way of doing business with the peace of mind of having an established partner to help handle the entire process securely.

Learn more about partnering with Dibbs to monetize your property while protecting your most valued assets.


Image of Jonathan Barbone
Jonathan Barbone

Jonathan Barbone is the Senior Director of Partnerships at Dibbs. Jonathan was an avid Magic: The Gathering card collector as a child.

Image of Jonathan Barbone
Jonathan Barbone
Strategist
Business
Client Success

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