Rental NFT | A New Era of Non-Fungible Tokens

Purchasing and collecting NFTs is undoubtedly an expensive endeavor. Even the most affordable NFTs from well-known initiatives like Bored Apes and Cryptopunks are not available for purchase at a price that is affordable for a typical individual. Consider a Metaverse project like Voxels, where you must buy a comparable NFT to buy real estate in the virtual world.Here, NFT rental comes into play in this scenario.

It is exactly what it entails: renting out NFTs to offer users to possess an NFT and utilize its benefits.

Types of NFT Rental:

Renting with Collateral

Lenders can list their NFTs on an NFT marketplace that offers lending and borrowing functionalities. Renters who are interested in the NFT would then start the borrowing procedure. The rental procedure starts after the terms have been decided upon and agreed upon. It would involve putting the NFT inside of a smart contract. The lender and borrower would agree upon the conditions of the smart contract.

The renter must deposit collateral with a larger value than the NFT to safeguard the lender's interests. Additionally, there is a rental fee that must be paid by the renter. After the contract's term is up, the NFT is given back to its original owner, and the borrower gets their collateral back.

No-collateral Rentals

The process for renting without collateral is the same as for renting with collateral. The sole distinction is that, in contrast to collateral renting, the renter never receives the original NFT in this situation. Alternatively, a wrapped non-fungible token (NFT) is generated specifically for the renter, encompassing identical attributes and functionalities as the original asset while maintaining a direct connection to it as well. The wrapped NFT is incinerated once the contract ends. Both the renter and the owner are exempt from this requirement in this case. This lowers the financial risk for both parties.

Use Case in Rental NFT in The Metaverse

Plots within virtual worlds are referred to as LAND, such as those offered by protocols like The Sandbox or Decentraland. An NFT representing a property, which normally may be acquired in a virtual marketplace like OpenSea, stands in for LAND.

It is possible to develop the LAND itself, either directly by the owner or through builders. In this model, the wrapped NFT associated with the rented asset becomes subject to market speculation, as its value is detached from any specific utility or functionality. Instead, it primarily serves as a tradable commodity based on perceived investment potential. When taking into consideration rentable NFTs, this is not the case. It provides the LAND owner with two significant potential revenue streams:

- Taking up a landlord role and leasing LAND

- Using the potential for advertising to monetize the LAND

Rental NFTs can continue to advance the metaverse economy thanks to these strengthened use cases. Thanks to the ERC-4907 standard, brands now have the opportunity to engage in short-term rentals of NFTs for a wide range of initiatives, events, or digital activities. This standard enables brands to access and utilize NFTs temporarily, allowing them to leverage the unique attributes and creative potential of these digital assets without the need for long-term ownership.

NFT Renting in Blockchain Gaming

Many games have NFT representations for the items and upgrades that provide the player with advantages. By leveraging these advantages, players can enhance their chances of success in minigames or triumph in battles, ultimately boosting their revenue potential. The utilization of these advantages within the gaming context can provide players with a competitive edge, allowing them to achieve better results and potentially earn more in-game rewards or profits. These NFTs can be challenging to obtain due to the extra value.

Blockchain gaming accelerators address this issue by allowing users to rent NFTs. This considerably improves the players' capacity to perform effectively and generate more P2E revenue. The ERC-4907 token standard has made it considerably simpler to put this idea into practice.

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