Introducing NFT Rentals as an Earning Method for Asset Owners & Renters
You have heard that people are now renting NFTs and you want to know more? Or maybe you cannot afford to buy an NFT that you need, so you are looking for ways to rent it? In this guide, we’ll explain what NFT rental is, how people could rent NFTs, and why someone might want to rent an NFT. This article will also enclose a marketplace where you can make your passive income by renting NFT. Read below!!
What is NFT Rental?
An NFT rental involves a person who owns a particular NFT and another person who needs an NFT for a limited period of time. NFT rental marketplace uses DeFi-like blockchain protocols to enable safe transactions and also ensure that the NFT is returned to the owner after the rental period has ended.
How to rent NFT?
There are 2 broad ways that NFTs can be rented out, including Collateralized renting and Collateral-less renting.
Users can list their digital assets on a marketplace that is customized for renting. Once users run into a particular NFT of interest, they can immediately start the NFT renting process. The NFT is then deposited into a smart contract according to the terms and conditions approved by both renter and asset owner.
In this case, in order to protect the asset owners and their assets, the renter is required to deposit collateral with a higher price point than the NFT. The renter also has to pay a certain sum as a rental fee. After the contract expires, the NFT is returned to the original owner. The NFT renting process concludes as collateral is released and then returned back to the asset owner. In case the renter couldn’t pay the NFT back, the platform will liquidate his collateral or the asset owner can sell the collateral to recover the losses.
This method offers renters an option in which the original NFT never actually enters the hands of the renters, while at the same time, asset owners do not have to put up collaterals, thereby minimizing impact on their financial assets.
In this case, asset owners can list their NFTs on the marketplace so that renters can start renting without providing collateral. After paying the full amount of rent, renters can own the NFTs in a fixed period of time. Upon the renter’s successful earlier return of NFTs or at the end of the rental duration, NFTs will automatically be transferred to the asset owners without notifying the renter.
Renting NFT on RiFi Marketplace
The RiFi NFT Rental Marketplace is a platform allowing peer-to-peer rentals of NFT assets. RiFi NFT Rental Marketplace allows NFT asset owners to list their NFTs available for rent by renters. This marketplace works on a peer-to-peer basis (P2P). Currently, the marketplace has two P2P NFT rental modes:
- Escrow Rental Mode (or Non-Collateralized Rental Mode): As the NFT asset does not get transferred to the renter’s wallet, the need for collateral to secure the rental return is not required. Instead, the rented NFT remains in “escrow” with the marketplace smart contract.
- Transfer Rental Mode (or Collateralized Rental Mode): As the NFT asset does get transferred to the renter’s wallet, collateral is required to secure the rental return to the asset owner.
NFT renting gives you the benefits of having an NFT without the financial commitment of investing in it. Investors who are looking to acquire assets that have the potential to yield passive income should definitely consider taking a look at rentable NFTs.
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Disclaimer: The information herein is for educational purposes only and should not be considered financial, investment, or trading advice. Please conduct your own research and due diligence before making investment decisions. You understand that you are using the Information provided at your own risk.