In all modern homes the basement floor and walls are all wrapped in a thick plastic barrier to prevent moisture from seeping into the home. Unfortunately we all don’t live in new homes and we have work with whats available. Moisture seeps into the basement through walls and floors causing a high humidity environment, any source of cold cause this water to condense. All tankless and tank type water heaters have a cold water line leading to the appliance. This supply line almost always “sweats” and can cause corrosion at a the tankless water heaters connection site.
Your best solution for Pipe sweating?
The next best solution is to deal with the issue at its source, this means waterproofing your basement floor and walls, fixing any water leaks that cause additional humidity levels. As a last resort you can look at running a dehumidifier in the basement to bring the moisture levels down even further.
Good Luck and protect your tankless with pipe insulation