Compliance with transfer of title laws for NFT transactions is ensured through the use of smart contracts, which are self-executing contracts with the terms of the agreement directly written in code. The smart contract acts as an escrow agent, holding the NFT until the conditions of the transaction have been met.
The conditions required for a transfer of title typically include the recipient paying the agreed-upon price, and the seller transferring ownership of the NFT to the buyer. Once these conditions have been met, the smart contract automatically transfers ownership of the NFT to the buyer.
In addition, the use of blockchain technology for NFT transactions provides an immutable record of ownership, making it easy to track the ownership history of an NFT and ensuring that there is a clear record of ownership transfers. These features significantly reduce the risk of fraud and ensure compliance with laws governing the transfer of titles.
