EXPLAINER: Understanding NFT rental and what it can offer to the Web3.0 landscape
Investments around the non-fungible token (NFT) space seem to have sustained the price factor. Although buying NFTs is not considered cheap, it is believed that NFT rentals can be a viable option for users. As the term suggests, NFT leasing refers to acquiring an NFT for a specific timeline, for a fee to the owner.
According to Medium, an online publishing platform, seven percent of Web3.0-based games have approved NFT rental, while 18% aim to adopt it for the top 100 games. The platform further stated that NFT rentals can make in-game asset tokens available to new players. “I believe platforms specialized in NFT rental are using blockchain from the decentralized finance (DeFi) space to support transactions. When the rental period expires, these systems ensure that the borrowed NFT is returned to its rightful owner,” said Vijay Pravin Maharajan, founder and CEO, bitsCrunch, a data analytics company, to FE Blockchain.
Upon further understanding, it has been found that NFT rental can be done either with or without security. Market research has highlighted that NFT rentals can generate passive income for users through risk and reward. As noted by Supplain, a blockchain protocol, the GameFi sector can benefit from NFT rentals, as players can transfer their in-game assets to a marketplace and sell them for revenue. Through the NFT land lease feature, future users can develop the infrastructure required to benefit from their online time. NFT rental is believed to be useful for both lenders and borrowers who intend to monetize the Web3.0 ecosystem.
“I think NFT rental has emerged as a trend in the NFT community. It can benefit investors, including income generation, diversification of their portfolio and the opportunity to explore the NFT world. NFT rental has the potential to be utility for art and collectibles, the gaming industry and more,” said Alankar Saxena, co-founder and CTO, Mudrex, a crypto investment platform.
Platforms such as Vera, Defy, reNFT reportedly offer NFT rental-based services to users. For example, Defy, a decentralized platform, offers facilities such as NFT rentals, lending and mortgages. Furthermore, NFT leasing is expected to drive liquidity through improvement in NFT adoption. Insights from AirNFTs, an NFT marketplace, stated that NFT rentals will be a boon for those who intend to associate themselves with the Web3.0 landscape, even if they lack the financial stability to purchase digital assets.
“We want NFT investors who are willing to buy digital assets for the purpose of renting them out. On the other side of the equation, we also have a type of player who understands that time, skills and talents are investments, and it doesn’t have to be coupled with investing their money in a digital asset, says Kameshwaran Elangovan, co-founder. and CEO, GuardianLink, an NFT marketplace, concluded.
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