“EIP-4907,” the rentable NFT standard submitted by the NFT rental marketplace Double Protocol, underwent the final evaluation by the Ethereum development team on June 28 and was given the status of “Final” to become the 30th ERC standard token.
The ERC-4907 standard, an extension of ERC-721, implements the time-limited “user” role and enables automatic expiration through the ground-breaking “expires” function. Implementing the “expires” feature is crucial to the operation of NFT rentals because it eliminates the need for NFT owners to manually revoke user rights, which is made more difficult by simultaneously leasing several NFT assets. As a result, gas costs are decreased.
NFT Rentals
Many NFTs have substantial functionality that can be used in games or other digital facilities to change and enhance the experience. For example, the Sword NFT can be equipped to deal more damage and improve the player’s performance.
However, if users want to obtain some NFT functions without committing to purchase, “renting an NFT” is an alternative.
Renting NFTs allows users to temporarily store NFTs in wallets for a fraction of the price and use them to unlock features and digital experiences.
The existing projects that provide this rental NFT function divide the NFT holders into two types: the owner (Owner) and the user (User).
- Everyone: Owns the NFT, which can be sold or transferred to another wallet.
- User: NFT is held in the wallet and cannot be sold or transferred.
This means that the wallet that rents the NFT temporarily gains the user’s identity, and the owner must submit two on-chain transactions, one to list the wallet address as the user at the beginning of the period and one to withdraw at the end of the lease User identity.
ERC 4907
The current common lease is mainly completed through the above two transactions, but it is not efficient in terms of time or gas cost. ERC-4907 is to solve this problem.
The ERC-4907 smart contract standard adds an “expiration” function, which automatically ends the period of use without a second transaction, significantly reducing the integration cost of NFT rentals.
The ERC-4907 standard is an extension of the ERC-721 standard, which means it is backward compatible with any ERC-721 contract. Any existing ERC-721 smart contract can implement the lease function through contract extension.
The emergence of ERC-4907 has also unlocked some exciting applications, such as:
- Video game NFT rental
- Temporary Membership in the Token Certification Club
- Quick access to token authentication software
- NFTs as collateral
- NFTs can serve as proofs of real-world rentable assets
What does this mean for users?
As NFTs gained popularity, there was a desire for their purchase, with the metaverse and play-to-earn (P2E) development confirming the assets’ previously unheard-of functionality and utility. In the $170+ billion gaming industry, Gamefi, currently valued at $21 billion, needs unmatched contributions from NFTs. In the metaverse, NFTs help build virtual communities and digital economies, thus enhancing NFT usage.
However, prohibitive prices for purchases and hyperinflation made mainstream users less accessible. Therefore, NFT rental platforms became immediately necessary due to the proof of asset worth and usage value, and they also had the power to influence the NFT market’s liquidity.
Separating ownership and usage rights of the NFT was necessary to guarantee a risk-free, seamless renting experience. Although there were several remedies, such as using collateral to shield lenders from NFT losses, these models were ineffective due to the unequal distribution of property rights, and obligatory hefty deposits did not improve access to NFTs.
Due to its simple implementation, security, and a high degree of functionality, Dual-Role, through ERC-4907 poised to become one of the most significant token standards. They proved to be the ideal design for separating the rights of the owner and user. The “user” role allows usage for a set period of time without being given the ability to transfer the NFT. Faster innovation and expansion of the NFT ecosystem will result from accepting this strategy as the norm for NFT development.
Without the standard, integrating Double Protocol into Gamefi projects requires lengthy codes. The timer feature of ERC-4907 eliminates the need for yet another on-chain transaction and does not require scripting.
ERC and EIP
A specific subtype of the Ethereum Improvement Proposal (EIP) known as an Ethereum Request for Comment (ERC) deals with application-level changes that don’t alter the Ethereum protocol itself. Instead, EIPs are draughts of new features or design proposals made by any community member and submitted for approval by Ethereum ecosystem participants.
There are various stages in an EIP’s life cycle. A “concept” must first be “written” for an EIP Editor to enter the proposal into the EIP repository. After that, the proposal moves on to the “review” step, where an author asks for a date for peer review. An Editor gives the proposal a “last-call” status, and after 14 days, it must be given a “final” status.
Any EIP that has not progressed can enter the “stagnant” state after six months. For an EIP to be submitted, a high level of technical proficiency is needed, and a successful ERC has not only reached the “final” stage but is also being used by projects.
The following standards are some of the most significant ones in use: ERC-20, ERC-721, ERC-1155, ERC-4626, and ERC-777.
The Ethereum network allows for the deployment of all fungible tokens thanks to ERC-20. Non-fungible tokens (NFTs) are permitted by ERC-721, whereas packaged trades of various fungible and non-fungible tokens are authorized by ERC-1155. The Tokenized Vault standard, ERC-4626, supports any yield-bearing tokens and has a high degree of composability. By specifying the interface of token contracts and enabling the holder to reject tokens or ban them from addresses, ERC-777 expands the capabilities of ERC-20.
Double Protocol’s objective
The cross-platform portfolio of Ethereum is made possible via ERCs. Integrating all apps will be simpler by introducing ERC-4907, another uniform standard.
Double Protocol is building the GameFi and metaverse’s infrastructure. Their goal has been to provide partners with 0-code license-free access by continuously improving the partner access procedure. In addition, the smooth integration made possible by ERC-4907 reduces the need for coding and enhances communication between all partners who adopt the standard.
Due to unresolved NFT contracts, applying this most recent ERC for Double Protocol is possible. Projects unable to upgrade their contracts similarly can use “Wrapped Dual-Roles,” an equally sophisticated ERC-20-compliant resolution in which new NFTs are created with user information “wrapping over the original.”
With Double Protocol serving as a lead-in, the adoption of the rental NFT standard heralds the start of additional mainstream applications of the Ethereum network.
New to trading? Try crypto trading bots or copy trading
