NFT rental protocols allow you to rent NFTs only for a short period of time. These protocols allow the transfer of NFT user rights, but not the ownership. Users who don’t have an NFT can still benefit from its utilities and NFT owners can earn passive income.
What is the process of renting NFT?
On platforms that offer rental protocols, users can borrow and lend NFTs for a specified period. The lender posts the NFT to the marketplace and determines the rental terms such as the number days. The borrower pays rent and any additional fees, and returns the NFT to the original owners at the end.
Certain protocols require collateralized rent, in which the borrower must deposit collateral to rent the NFT. Non-collateralized rent is now the norm. It lowers the hurdle to NFT access and is therefore more attractive to borrowers.
Renters will receive a wrapped NFT (wNFT) after they have paid the necessary expenses. This NFT represents the NFT that the lender provided. Wrapped NFT (wNFT), is created by exchanging tokens for another in an equivalent amount using a smart contract. The wNFT may include nonfungible collaterals or functions across multiple blockchains. The original NFT is returned to the owner after the rental period has ended.
Web3 uses rental protocols in many situations. Let’s take a look at some examples.
NFT rental of metaverse lands, in-game assets
NFT renting is a lot easier when you have GameFi assets. Play-to-earn gamers usually only need certain assets until they reach a certain level. They can rent these assets in-game and return them to their owners when they’re done.
Metaverse NFTs make excellent candidates for renting. Landowners have the opportunity to rent their land and earn a steady income stream. NFT renters have the opportunity to host events and create experiences on the metaverse properties at their own time.
Double is an open-source, decentralized NFT rental service that focuses on utility NFTs in the GameFi or metaverse ecosystems. The protocol allows renting NFTs using ERC-721- , the most commonly used NFT standard- or ERC-1155. This protocol does not require collaterals. The protocol doesn’t require renters to pay for network gas when they return NFTs. Instead, it deploys automatic expiration at end of rental period.
Double offers a native NFT rental marketplace, where you can borrow NFTs for multiple projects. It integrates with over 90 NFT projects including Metaverses Decentraland and Ariva Wonderland.
Gaming guilds can improve their management process
The GameFi ecosystem is a vital part of the Guild system. These scholarship providers rent their NFTs out to gamers who want to earn a living. Operation can become complicated when there are multiple parties involved.
UnitBox is a rental platform that specializes in this field. UnitBox uses a rent-to earn model that is based on revenue sharing. It pays players quickly and provides scholarship providers with real-time metrics to track the performance of gamers.
Create your own NFT rental marketplace and customize solutions
Developers can create new NFT marketplaces by integrating with existing protocols and renting functionality. Integration with the NFT rental protocol reNFT allows decentralized apps to create whitelabel solutions while keeping the project’s interface intact. You can also create tailor-made NFT renting websites.
New DeFi revenue streams
One of the best features of reNFT’s protocol composability is its ability to collaborate with other protocols in order to unlock additional utilities.
They can borrow their NFTs and also fractionalize them.
Another protocol, IQ Protocol, aims to expand the range of DeFi options for NFT rentals. It will therefore be possible to rent out NFTs and still have access to other utilities such as concert tickets or gated content.
Web3 participants are able to profit from other DeFi opportunities thanks to features such as protocol composability or extending NFT utilities throughout the renting period.
What are NFT Rental Protocols (PDF)? NFT News Today published the article.