IQ Protocol: NFT Renting
IQ Protocol is about to completely disrupt the NFT scene, changing the way we engage with our digital assets.
- $12m fundraising round led by Crypto.com Capital
- 30+ blockchain and GameFi partners in 2022 alone (with no signs of slowing down!)
- Innovative technology that will transform the state of NFT marketplaces
What’s all the hype about?!
For us at IQ Labs, it was not enough that IQ Protocol introduced the world’s first decentralized SaaS and solved the “token not needed” problem (both feats unto themselves). As we saw it, IQ has the power to greatly expand the potential utility of all of your digital assets — NFTs in particular.
This is because our platform opens up completely new use cases for NFTs, all while requiring no collateral and involving no risk!
What we are creating will allow for NFT lending and borrowing that is…
- Risk-free
- Collateral-less
- Cross-chain capable
- Multi-purpose (with a single NFT)
- and more…
These are features that have never been seen on NFT marketplaces or GameFi platforms!
We’re excited to introduce you to these innovative features. So, let’s get started.
The General Concept
IQ Labs envisioned an NFT rental marketplace that would elevate their utility and create a brand new economic model for holders and projects, freeing them — at once — from high collateral restraints and asset risks.
IQ Protocol for NFTs provides the infrastructure for token holders to rent out their NFTs to other users. The rental agreements are based upon a pre-arranged amount of time and for an agreed-upon price, benefiting both parties involved. Traditional staking is often based on inflationary mechanisms to provide interest; renting out your NFTs is tied to specific utility for the NFT creating a more sustainable economic model, with renters gaining access to the represented utility of the asset
IQ Protocol’s model for NFT lending and borrowing is built to be risk-free. Up until now, NFT renting has been associated with collateral and been based on trust in the renter to return the original asset at the end of the rental period, in exchange for the collateral provided. With IQ Protocol, such risks are not a concern. Instead of giving the original asset to the borrower, IQ Protocol mints an expirable version of the NFT (which contains all of the unique features and metadata of the original). This wrapped version of the NFT is then given to the borrower.
Our platform secures the original NFT which is returned to the owner after the agreed-upon rental contract has expired. Now, token holders can enjoy the benefits of renting out assets that they aren’t currently using, but that they would not like to sell. With our platform, NFT depositors and projects can earn rewards (rental fees) on NFTs, all the while knowing that the original asset is safe.
Introducing IQVerses and Warpers
There are two primary elements at work in the IQ NFT Protocol Platform: IQVerses and Warpers. These are the names we’ve given to service providers and the contracts deployed to create eligibility for chosen NFTs, respectively. Below is a description for how these work.
IQVerses (service providers) can sign up on the IQ NFT Protocol Platform, select what NFT contract they want to provide services to and set various parameters, including (but not limited to):
- Fee split between service provider and the holder
- Rental duration (minimum and maximum),
- Minimum price,
- Asset property (as defined in the metadata or possibly beyond its original asset properties)
- Service eligibility
The IQVerse connects to the platform via a supplied SDK to confirm eligibility within their ecosystem and handles data exchange for upgradeable NFTs. It also provides out-of-the-box data monitoring provided by PARSIQ, allowing users to acquire all the necessary rental data in real-time.
Once connected, the IQVerse services can launch on the IQ NFT Protocol Platform. This allows eligible NFTs to be listed for rental on the marketplace, following the parameters set forth from the IQVerse.
We call the contract deployed to create eligibility for chosen NFTs a Warper, due to the fact that it “warps” the original asset and creates a wrapped expirable version for the person renting. This solution allows us to create an ecosystem where the original assets are securely kept in locked smart contracts, without need for any collateral for rentals. All the renter needs to do is pay the fee set by the lister.
The logic in our Warper contracts is created from a list of presets from a supplied toolkit, from which the IQVerse can choose. Furthermore, we’ve created a custom option, in which an IQVerse can code their own logic if they so desire. Talk about endless utility!
An IQVerse can support as many NFT contracts under their Warpers as they wish. It could be a partnering project which could gain eligibility for services from their NFTs or simply the IQVerse having multiple asset contracts.
Let’s consider an example…
For this example, let’s say we have an RPG game as well as in-game items in the form of NFTs.
The RPG game is the IQVerse (again, this is the service provider). They create a Warper, which defines the eligibility of the use of NFTs being rented from IQ Protocol. The Warper can be defined to select an NFT contract from the Treasure NFT Collection, in which each NFT holds a list of items typically found in an RPG, that can be unlocked in a game while renting that asset.
But the Warper is not limited to defining only one kind of NFT. In that same Warper, the RPG game could add eligibility for the Loot NFT Collection as well, which are also unique NFTs with a list of assets that can work in the RPG game. For instance, an NFT from this collection is Loot Bag #4948:
Now, players of the RPG game are free to rent NFTs from the Treasure NFT Collection and the Loot NFT collection to enjoy in the game.
More could be done in this scenario as well! For instance, besides just offering the assets listed in the NFTs, the IQVerse could enable special features or bonuses. Say the RPG game wanted to encourage players to rent Treasure or Loot NFTs for the game. The IQVerse could enable a “Legendary Modifier” bonus that would randomly generate an item within the NFTs to have stronger-than-usual properties. Players would not only receive the items included with the NFT (as normal), but would also be rewarded with special, upgraded gear! Bonuses like this would further incentivize players to rent NFTs from the Loot and Treasure collections. This would also incentivize the owners of the NFTs to list their assets on the IQ Marketplace, since NFTs from these collections would be in hot demand.
Furthermore, an IQVerse can create as many Warper contracts as they wish. They can, for instance, create one for each different service that can be unlocked with their NFTs, or create a simultaneous multi-renting scenario, where an original NFT can be eligible for several services within the IQVerse at the same time.
Cross-chain NFT Applications and Multi-Purpose Renting
Our NFT marketplace will not only support multiple chains, it will also support Warpers existing on different chains. It doesn’t matter where the original asset is, if a Warper wants to utilize another/multiple chain(s) for fee reduction in transactions — or simply because their platform uses another blockchain than the assets they want to add support for — they can do so.
The original asset can be on the BNB Chain, but the Warpers can choose to be on Solana and Polygon if they want. Each IQVerse can choose to support multiple chains for each utility.
Here is another example…
The IQVerse offers NFTs that can unlock skins in their game, but the same NFT can also be used as a whitelist entry, and also used as some other gated content.
IQ Protocol provides completely original technology in cases like this!
Here is how: The IQVerse can create multiple Warpers, allowing the various functionalities of the asset to be rented out simultaneously. That is, the IQVerse could choose to create a Warper that creates a wrapped version of the NFT to unlock the same skin in the game, but also create a Warper that creates eligibility for the whitelisting, and one for the gated content.
This creates a whole new economic model, where holders — be they users or the IQVerse themselves — can create a multi-level eligibility scheme for supported NFTs.
In short, IQ has enabled multiple simultaneous rentals of the same base asset, but for different utilities — something that does not currently exist today.
Using just one NFT, the asset owner can create multiple revenue streams by lending it out with various different utilities. In doing so, the owner can maximize income potential on the underlying asset.
This is exciting! Where does the revenue go in a case like this?
Both the holder and the IQVerse can benefit from the rental in the form of a revenue split. A revenue split for the creator as seen in some NFT contracts can even be added.
This graphic provides an example:
In the above example the Warper revenue split is set for 5% for the IQVerse and 95% for the NFT holder, but can be set to anything in the individual Warper from the IQVerse side. The fees are paid out immediately after someone rents the asset.
The original NFT is eligible for services in 3 separate Warpers and are rented out at the same time. The fees from each rental is immediately distributed to the IQVerse and the original NFT holder.
There will be a multitude of different currencies available to pay the rental, the IQVerse and the listing party can choose to receive the fees in the currency it was originally paid in, or they can choose to have fees converted to a token of their choice. A converter embedded in the platform handles all conversions on tokens supported by the largest DEXs on their respective networks, so one can choose to be paid in a stablecoin, or an IQVerse could opt to be paid in their native token, effectively turning the solution into a perpetual buyback feature in their ecosystem.
IQ Labs: Defining Our Unique Approach
With the model we have created, the original asset never leaves the security of the smart contract custodian, until the owner decides to withdraw it. This creates an ecosystem free from collateral needs, the (sometimes) high entry barrier to popular NFTs, as well as the risk of transferring your asset to an unknown individual, without certainty of its return.
Another convenient feature is that the IQ NFT Protocol Platform will allow people to queue for renting. So, if an asset you are interested in is currently unavailable, you have three options:
- Put the asset on your watchlist to be alerted when it becomes available, or
- Queue in line for the rental. In this option, the rental is paid for immediately, ensuring that the rental passes over to the next person in line after the end of the existing rental period with its current holder.
- You can use our booking system to secure your rental for a specific period of time, for example for a planned vacation where you want to play with this asset in a game for the duration of your vacation.
Acknowledging that setting the perfect asset rental price can be hard to figure out, IQ Labs has opted to bring forth several solutions. Per default, the rental prices are fixed and determined by the lister within the parameters set by the IQVerse, however there will be multiple incentivization options offered, including:
- Bid options
- Dutch auctions
- English auctions
Multiple IQVerse Utility Options
Finding compatible partners in the crypto space is a constant search. With IQ’s NFT Protocol, different projects can easily collaborate and create eligibility and utility for their respective NFT assets.
Consider this example…
An open world, 3D First Person Shooter (FPS) game company could partner with a 3D artist project to allow their NFTs to come to life in their game and create a revenue split model between them.
Completing the circle, the 3D artist project allows eligibility to the game company’s NFTs for whitelisting in their upcoming token collection sale.
Guilds and Scholarships
The platform provides an option for “reverse renting”, i.e. rewarding a person for carrying out a task with an NFT. An NFT holder can list an NFT with a reward for fulfilling a specific task with the item within a certain time period.
Example…
A game with supported NFTs offers upgradeability to items. The higher the level the better the stats of the asset.
A holder of a sword NFT would like to level his sword from level 5 to level 10, but he doesn’t have time to play himself to level up, but would like the sword at level 10 when he is off work next weekend to play with his friends who are all at a higher level than him.
He can list the sword with a bounty and deadline for someone to complete and be rewarded.
Requirements are to level the sword from level 5 to 10 and the deadline is before the next weekend. He deposits his sword into the IQ NFT Protocol Platform and a wrapped version of the sword is minted to the person who takes up the bounty. The bounty hunter pays a small deposit to ensure incentive in completing the task. Once the task is completed and the stats are upgraded in the metadata and can be verified on-chain, the bounty hunter is rewarded with the bounty and his deposit, while the wrapped asset is returned to the protocol. The original NFT asset is upgraded with the same stats from the wrapped asset, now reflecting level 10.
A mutually beneficial partnership model!
The team behind IQ is working with Guilds on how to power strong automated revenue share models, with their partner games and their users. Within our SDK, we plan on delivering a model where games can connect with the protocol and be tied to partnering guilds, which has players that loan assets to better maximize their in-game earnings, but don’t necessarily want to buy and hold those assets.
Guilds can also choose to “whitelabel” the IQ NFT Protocol platform to reflect on their own front-end. This can open up their ecosystem to IQ NFT Protocol’s collateral less renting and secure custody contract, so they don’t have to worry about infrastructure, but can concentrate on building community and partnering with games etc.
NOTE: The concept of IQ NFT Protocol is subject to change and the first version will be an MVP with some of the core concepts described in the above, while many of the features will be added on at a later stage in development. A roadmap for the intended feature-set of the platform is in progress.
Risks of using IQ Protocol
As IQ Protocol is designed with no collateral in mind and with single asset staking, the risk of utilizing the protocol is greatly minimized. Further, IQ contracts have been audited by Hacken, a trusted, global provider of cybersecurity services for all businesses. The audited results can be found here.
The IQ NFT Protocol will be similarly audited once launched.
Start using IQ Protocol for your project!
For now, the process of onboarding is manual. We are, however, hard at work creating an automated walkthrough that will guide you in setting up your own renting pool with your own metrics and token support.
Contact IQ Labs at: info@iq.space
About IQ Protocol
IQ Protocol is a decentralized money market for digital asset renting and on-chain subscriptions. The next money lego that allows users to rent wrapped expirable versions of digital assets without collateral for their utility, while allowing holders to earn by providing liquidity without risk.
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