Today, we will talk about the new standard for leasing the NFT, which was approved by the development team of Ethereum on June 28, 2022. This new standard allows a user to let another person use their NFT for a certain period of time. After the user has used their NFT, they will no longer have access to it.
The rental services provided by the NFT development team make it easier for people to enter the P2E space. They allow players to rent their NFTs without any restrictions and pay the landlords a certain percentage of their profits. In addition, owners of non-fungible cryptocurrencies can earn additional passive income by leasing their NFTs.
Although the concept of play-to-earn video games has been around for a long time, it is still relatively new in the gaming industry and cryptocurrency. Due to the combination of money and entertainment, this industry has huge potential.
What is an NFT rent?
Similar to a real-world lease, the concept of leasing NFTs works exactly like this. Instead of buying a new car, you can rent one for a certain number of days and return it at the end of the lease. This method is more cost-effective than buying a new car. In addition to leasing a car, the leasing team also provides users with the opportunity to temporarily use their NFTs.
Why NFT renting is important?
There are many advantages to leasing NFTs. It allows both the tenant and the owner to benefit from the various features of the asset. For the tenant, it allows them to access services that they would not be able to afford otherwise. For the owner, it allows them to earn passive income from the asset. By leasing their NFTs, the owner can collect a portion of the profits generated from the asset. In the gaming space, these NFT rental benefits are a win-win for wealthy gamers and casual gamers alike.
The potential of the NFT rental market is immense. Due to the increasing number of blockchain games and guilds, the demand for NFTs will be very high in the next few years. This will cause a huge number of unused NFTs to be generated by the various projects and users. To minimize the cost of participation and reward the users, the leasing team should maintain an active rental market.
Existing ways to rent NFTs
There are currently two ways to rent out NFTs:
- secured rent
- unsecured rent
One of the main advantages of leasing NFTs is that the owner can transfer ownership of the asset to the tenant at the end of the lease. However, this method can also expose the users to various risks. For instance, if the lease ends, the original owner can't control the asset anymore. In addition, the owner must manually return the asset after the lease expires.
The implementation of the new generation of blockchain technology known as the ERC-4907 has eliminated the roles of the owner and the tenant. With this new system, the tenant's privileges will automatically expire at the end of the lease.
Dual Role NFT Renting Standard (ERC-4907)
The dual role system introduced by the new generation of blockchain technology is an extension of the existing E-commerce standard, known as the ERC-721. With the new system, the owner and the tenant no longer have to manually manage the privileges of the asset. This eliminates the need for the owner to manually update the status of the asset, and it allows the users to easily rent it.
The new role in the NFT standard allows users to rent out NFTs without the involvement of the owner. With this feature, the tenant can continue using the asset until the end of the lease term, and then automatically transfer the NFT to the owner.
The easy-to-implement and flexible dual role system introduced by the new generation of blockchain technology is ideal for the development of NFTs. It can help accelerate the ecosystem's growth and innovation.
The protocol suggests:
1. The dual role system allows users to easily control the activities of the borrowers and lenders who use NFTs. It eliminates the need for the owner to manually manage the privileges of the asset.
2. Easy implementation: Easy to implement and ensures backward compatibility.
3. The ability to integrate with third-party platforms is also a major advantage of the dual role system. With the new feature, the owner can now rent out NFTs to different users, while the mortgage platform uses the owner role.
4. Blockchain time management (expires): The NFT "user" is automatically terminated after the lease expires.
5. The increasing number of people who want to rent NFTs will boost the liquidity of the market. This will allow more people to access the benefits of NFTs. Some of these people are not interested in buying virtual land or in-game assets.
6. The availability of NFTs in the new generation of blockchain technology has increased the number of ways that users can rent them. Unlike previous leasing methods, the tenants are not required to provide any collateral in order to use NFT. This eliminates the need for the owner to manually manage the privileges of the asset.
Where can I rent NFTs
Despite the increasing number of sites that allow users to rent out NFTs, the market for this type of asset is still relatively small. Some of the most popular platforms that allow users to rent out NFTs are reNFT, Vera, and Trava.
In this article, we discussed the various advantages of the dual role system and how it can help the development of NFTs. The main advantage of the standard is that it eliminates the need for the owner to provide collateral when lending and leasing NFTs. If the standard is widely used, it can help improve the efficiency of the ecosystem's multiple platforms.