Ontology Tech Viewpoint | NFT For Rent? Mind Opened!
We’ve been talking about NFT technology and industry changes, with new people/brands/companies entering the NFT industry every day.
Karissa Bell, senior editor on the well-known electronic technology blog Engadget, tweeted that Mark Zuckerberg’s entry into the NFT space is working to bring NFTs to Instagram in the near future, and that users can cast their own NFTs.
Coinbase NFT announced earlier this year that it has contacted over 100 creators. Perhaps we will see its live NFT product soon.
While new products are mushrooming, already popular NFT pieces have gone through a round of waves, and those that remain have risen in value. According to the Nansen NFT-500 Index, the price of 500 premier NFTs denominated in ETH rose 68.5% between January 1st and March 9th, 2022.
For example, according to the NFTGO platform statistics, as of writing, the The Bored Ape Yacht Club series NFT 24-hour trading volume was over $4.33 million, an increase of 48.55%, the series NFT floor price was 92 ETH, a 24-hour increase of 5.03%.
Despite this booming trading market, the fact is that most NFTs are “asleep”. According to the NFTGO platform, there are over 2 million total NFT holders, but the average number of daily trades recently is only about 40,000. What’s the problem?
NFT is difficult to realize
In terms of functionality, what added value can a PFP bring beyond a collection and avatar? Considering the high price of NFTs, it may not be worth it for the average person to pay for an avatar that can only be collected (when they may not even be able to sell🤷🏻♀).
To put it bluntly, for most existing NFTs, they function more like a permanent collection; or they are too expensive to realize quickly.
In response, the resourceful Web3 developers have found another way, and the EIP-2615 NFT rental program has been launched!
Simple Logic of EIP-2615
To realize NFT leasing, there is a problem that must be solved — how to transfer the right to use an NFT while keeping the ownership of the NFT in the hands of the lessor.
As a result, the EIP-2615 protocol was proposed. The ERC-2615 standard extends the original ERC-721 by defining additional roles to support leasing and collateral functions. In order to facilitate understanding, next I will show you a simple example of the NFT leasing process.
Step 1 Suppose Alice wants to lend an NFT that she owns, then she will create a blank [tenant] role on the Lease Agreement.
Step 2 Bob wants to rent this NFT, then he needs to fill out the rental request and pay the rent.
Step 3 Alice fills in the [Tenant] role with Bob’s name.
After this simple process, the NFT is ready for Bob’s use. During this time, Alice cannot transfer the [tenant] role, protecting Bob’s usage rights. However, if Bob violates the lease agreement or the lease expires, then the contract will revoke Bob’s [tenant] role and reset it to Alice.
Advantages of EIP-2615
The EIP-2615 makes NFT leasing possible, depending mainly on the following EIP-2615 function points：
Unsecured lease
ERC-721 cannot separate the right of use and ownership, so to achieve a trustless lease, funds must be deposited as security. EIP-2615, on the other hand, realizes the separation of the right to use and ownership, and the ownership of NFT will not be transferred, so there is no need to deposit funds for security.
Finding the value of NFT usage
In conventional realization interactions, NFTs are usually blocked in the agreement as collateral and are not available to all. The EIP-2615, on the other hand, enables a leasing model that not only realizes NFTs for the holder, but also allows the tenant to fully utilize the NFTs during the lease term.
Enhance the security of business management
This separation of ownership and usage rights provides convenience and security for the management of the company, especially the management of DAOs. For example, if a company needs to provide a new employee with the right to operate a certain account, it can provide the employee with an NFT as the management credential of the account. The EIP-2615 allows the new employee to obtain the right to use the NFT, but the ownership still belongs to the company, thus playing a role in guaranteeing the security of the account.
Conclusion
Leasing is one of the rigid demands in human social activities, both for owners to cash in and for renters to use. Therefore, in the foreseeable future, NFT leasing will become an important part of the ecology as the industry develops. Especially in GameFi and Metaverse, NFT leasing brings asset management and asset liquidity for game guilds in GameFi and Metaverse real estate investors, and these empowerments will feed the ecology toward prosperity and encourage continued development.
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