Lending and renting mechanisms of society have been pretty straightforward since B.C. (before crypto). If you wanted to rent an expensive asset or get a loan from a bank or a lender, you’d have to put some collateral down for it first, along with the necessary documentation. This process would get increasingly complex depending on how hefty or valuable the loan amount is.
For example, if one wanted a Rolls Royce for a month, it’s nearly impossible anyone would lend it without a heavy security deposit.
In the context of crypto, if I wanted a Bored Ape Yacht Club (BAYC) NFT, I couldn’t afford it. But what if I could rent it for a month? Without having to pay an arm and a leg and, best of all, without putting any collateral you get access to exclusive membership club (and flexing rights).
Oiler team is thrilled to present to present Nafta.market platform that facilitates NFT Flash Loans & Long Term Renting without any collateral, available on Mainnet, Rinkeby and Görli.
But why would you need to rent an NFT? Well, apart from the BAYC example, there are many reasons why you might want to consider renting instead of outright buying it.
- Games: With in-game characters becoming increasingly popular, players with seniority and achievements have traits and keys that are simply out of reach of beginners. Even tools, weapons, serums, and avatars — what if you want to try them out before buying them? How about renting special weapons for specific missions only?
- Land: The metaverse real estate market is a prime example of several use cases of renting land and meta-property. Do you want to do an exhibition of your NFTs? Display your latest photographs? Have an invite-only pool party? Get a business meeting going? Rent out the place. Metaverse landowners, on the other hand, instead of flipping the land for a profit, will be able to generate passive income on their investment and turn it into a productive asset.
- Exclusive memberships: Owning an NFT can often mean exclusive memberships and opening certain doors which would otherwise be closed. Just getting a temporary license for a while might mean the same perks for you, too, without breaking the bank. Example: You want to go to a concert by Ozzy Osbourne, but it’s exclusive to CryptoBatzz owners — well, you rent it out for a day and enjoy the party.
- NFT Finances: Imagine having a bond with floating cash flow that you can rent, exchanging it for a fixed payment. At the same time, you’re not giving away the underlying assets and can get them back after the rent term ends.
Now, the idea of renting land and launching a full-blown enterprise or a game within a metaverse such as Sandbox or Decentraland is quite exciting, but what if you could apply the same principle to NFTs representing DeFi assets?
Uniswap V3, as an example, represents liquidity provider (LP) positions as NFTs (ERC-721 tokens) and acts as a “receipt” to claim your staking yields and your stake. Imagine renting this to somebody for an upfront payment in exchange for future rewards, but without actually selling your stake.
And this is just scratching the surface. We are currently at a defining time with this new introduction to the arsenal of Oiler products. And genuinely excited to see all the creative use cases you will bring to the table.
How to get started?
There are two main ways you can interact with Nafta protocol: Flash Loan & Long Term Renting
You can rent an NFT for single use in a single transaction.
To execute an NFT Flash Loan, you can use one of our example contracts or deploy your own that will interact with Nafta smart contract :
- Your contract calls Nafta contract requesting a Flash Loan using
flashLoan(). You will indicate a certain
maxLoanPrice(Price the user is willing to pay for the flashloan) &
- After some sanity checks, Nafta transfers the requested
_poolNFTsto your contract, then calls
IFlashNFTReceiveron your contract (or another contract that you specify as the receiverAddress).
- Your contract, now holding the flash loaned
nftId, executes any arbitrary operation in its code.
- Once your code is executed, you transfer the flashLoaned
nftIDback to Nafta.
- If anything goes wrong (e.g. NFT is not back to Nafta in the end) — the whole thing is reverted, as if nothing happened — similar to usual flashLoans.
Long Term Rent
This feature allows you to rent out NFTs for longer period of time and join this marketplace without a hard commitment to purchase for the long-term.
The owner of an NFT pools it with the Oiler Nafta pool and specifies the following: borrowing rate (per block) & maximum borrowing period
When the new owner rents this NFT, the ownership is not transferred from the pool to the new owner — instead, they only get a flash ownership:
- they receive an ‘ownership token’ representing the borrowed asset (which they can trade, transferring the flash-ownership)
- they become the only address that is allowed to flash-loan the asset from the pool (The owner won’t be able to withdraw it from pool until the long-term rent ends)
In all the active ownership cases, the NFT behaves like it was owned by the flash-owner
- Nafta.Market by Oiler is live on Mainnet!
- With Nafta, you can rent NFTs for long-term and multiple usages without any collateral.
- The borrower can use the NFT similarly to owning it
- You can either Flash Loan an NFT with one of our custom made wrappers or use your contract (p.s. you can read more on the wrappers and their functionality in the upcoming article)
- Tool for a secondary market for all the Oiler NFT assets that we are working on now
NFT renting is here to stay! With Oiler Nafta — the best part is that you don’t have to put down any collateral, whether you are flash-loaning or renting for a longer-term.
- Nafta and NaftaWrapper contract audits are coming
- Deployment on EVM compatible chains — BSC, Polygon, Avalanche, Fantom, Arbitrum
- More wrappers are on the way! — if you want help with developing a wrapper for your NFT project or reviewing a wrapper you’ve made and posting it on our website — contact us. We’re eager to partner!
- Common-use loan contracts will be developed as soon as we notice and determine the most common usage — if you have any ideas — write on our Discord