NFT Security Matrix: Towards Modeling NFT Ecosystem Threat

Abstract

Digital assets have boomed over the past few years with the emergence of Non-fungible Tokens (NFTs). To be specific, the total trading volume of digital assets reached an astounding $55.5 billion in 2022. Nevertheless, numerous security concerns have been raised by the rapid expansion of the NFT ecosystem. NFT holders are exposed to a plethora of scams and traps, putting their digital assets at risk of being lost. However, academic research on NFT security is scarce, and the security issues have aroused rare attention. In this study, the NFT ecological process is comprehensively explored. This process falls into five different stages encompassing the entire lifecycle of NFTs. Subsequently, the security issues regarding the respective stage are elaborated and analyzed in depth. A matrix model is proposed as a novel contribution to the categorization of NFT security issues. Diverse data are collected from social networks, the Ethereum blockchain, and NFT markets to substantiate our claims regarding the severity of security concerns in the NFT ecosystem. From this comprehensive dataset, nine key NFT security issues are identified from the matrix model and then subjected to qualitative and quantitative analysis. This study aims to shed light on the severity of NFT ecosystem security issues. The findings stress the need for increased attention and proactive measures to safeguard the NFT ecosystem.