NFT Rentals is the Next Frontier in True Digital Ownership
As of the time of writing this, NFTs are thought of by most of the world as mostly digital art and profile pictures of monkeys. Behind the scenes, builders have been working on NFT standards that will have transformative effects on the notion of digital ownership. One of these innovations is NFT rentals. Let’s dive into what makes this possible and the leading firm that is making it happen.
More Than Just Pictures of Monkeys
NFTs, or non-fungible tokens, have become increasingly popular in recent years as a way of authenticating and selling digital art and collectibles. The Ethereum blockchain played a pivotal role in the development of NFTs, with the first Ethereum-based NFT standard, ERC-721, being introduced in 2018. This allowed for the creation of unique tokens that could be owned and traded by individuals. The first NFT on the Ethereum blockchain is believed to be a digital artwork called “Terra Nullius” by artist Simon Denny, which was minted in 2018. Since then, countless other NFTs have been created on the Ethereum blockchain, including popular collectibles such as CryptoPunks and Bored Apes.
Profile pictures of monkeys may be the most known use case for NFTs however under the surface there is lot more to it. NFTs have various cutting-edge use cases beyond art. They can be used to verify the authenticity of products, such as luxury goods, sneakers, and even sports memorabilia. NFTs can also be used for identity verification and medical records. They have potential in the real estate industry for property verification and digital ownership. Additionally, NFTs can be used for financial transactions, micropayments, and loyalty programs. In the future, NFTs could also be used for social impact causes like carbon credits and charitable donations. Currently, beyond art and profile pictures, the most prominent use case for NFTs has been blockchain gaming.
Gaming NFTs
NFTs are used in blockchain games to provide players with ownership and control over in-game assets. NFTs can be used to represent unique and rare items in games, such as special weapons or character skins, and can be traded between players. In traditional gaming, players do not have true ownership of the items they acquire, however some games like CS:GO allow players to buy and sell in game skins. You can think of traditional gaming markets as the CeFi of the gaming world. Sure it gets the job done, but not your keys, not your coins. With NFTs, players can have complete ownership over their in-game assets. Additionally, NFTs in gaming also allow for secure transactions as they are verified on the blockchain, ensuring that ownership rights are protected.
To date most blockchain games follow a similar model. Let’s use Axie Infinity as an example. To play Axie Infinity, you need to buy an NFT that represents a cute little creature called an Axie. You use that Axie to battle other Axie’s and you can earn tokens and other NFT based power-ups and items that increase your Axie’s in game abilities. Those bolstered abilities usually translate to more tokens earned from playing the game. You put all of this together, and you end up with an Axie creature NFT that has more value. By owning your in-game assets as NFTs, you get to enjoy the fruits of your labour.
Why NFT Rentals?
The NFT rental standard on Ethereum is a set of guidelines that allows individuals to rent out their NFTs for a specified period of time. One such standard is ERC-4907. This standard is an extension of ERC-721 and allows for time-limited roles of “user” with an automatic expiration authorization feature called “expires,” which reduces gas costs. It also separates the rights of the NFT owner and user, enhancing usability, accessibility, and safety. There are many reasons why someone may want to rent an NFT, but all of this boils down to lending someone the underlying utility.
Owning a BAYC gets you access to their yacht parties. But if you’re not in town for the night of the party, why not rent your NFT to a friend for 24 hours and give them access to the party while monetizing your digital asset.
Did you mint an NFT that represents ownership of a limited edition film? Monetize your asset by renting out the NFT to individuals for set periods of time and allow them to watch the film while earning fees. A new age Blockbuster Video.
The biggest use case currently being explored comes back to gaming. There is a huge market for gaming NFTs, that must be held to play some blockchain games. Guilds have been notorious for buying up large swaths of these NFTs and allowing members of the guild that don’t have the capital to buy an NFT outright to play on their behalf.
NFT renting offers the ability to gamers to circumvent the need to buy an expensive NFT. They don’t have to join a guild. Instead, a gamer could rent an NFT for a small fee, earn all of the in-game rewards themselves and then return the NFT to the original owner. The renter is happy they got to earn rewards and play their favourite game. The owner is happy they were able to monetize their NFT instead of the asset sitting in a wallet collecting ether dust.
IQ Protocol: A Leader Emerges
The IQ Space is a universal solution for renting digital assets — designed specifically with Web3 gaming in mind. With the IQ Space, game studios & creators can leverage their in-game assets (e.g. NFTs) to increase revenues, incentivize players, and attract new audiences.
With the IQ Space, in-game assets are made accessible to all players. By making these assets available to all audiences, you can increase the level of interest and engagement in your game as your users return for different experiences each time. Best of all, everyone benefits — as your players are able to lend, rent, experience, and profit from each other.
IQ Protocol is the underlying blockchain protocol that powers IQ Space. The protocol takes it cut on every rental that occurs on IQ Space.
Finally, IQVerse is essentially the NFT collection owner, allowing the original creators to earn a fee with every rental, similar to how Opensea offers a creator fee on every sale.
IQ Marketplace is LIVE
The team at IQ Protocol has been building this marketplace for over 2 years, and just now are shaping up to release it in all of its glory!
Soon, users will utilise their p2p NFT rental technology to unlock the full utility of scarce digital assets at a fraction of the purchasing cost, completely redefining on-chain ownership and usage. You can join IQ Protocol in creating a more inclusive and decentralized marketplace, where anyone can enjoy/share the benefits of Web3 assets.
Disclaimer: I am an investor in a previous IQ Protocol private round.
