Just like 2020 was the year of DeFi, 2021 ultimately proved to be the year of NFTs.
NFTs were arguably the hottest trend not only within the crypto space last year, but probably in all of tech. Not just that, the speed at which innovation is taking place in the industry is also truly phenomenal.
In fact, NFTs have already evolved to be much more than mere speculative digital assets that buyers would purchase and hold onto in the hope that their value would appreciate significantly with time. On that front, if 2021 was the year when NFT ownership economy ruled the roost, that status quo could very well turn in favor of NFT renting this year.
It is not mere speculation, but there is tell-tale evidence that NFT renting would make the asset class more accessible to the masses and could eventually propel the entire industry to new highs.
Especially with the emergence of new platforms such as IQ Protocol, renting/lending is likely to establish itself as the new NFT consumption model of the future. We’ll delve into those details in a while, but let’s start with the basics first for those out of the loop.
NFT renting – what is it and how can users benefit from it?
NFT renting — well, the name itself is pretty self-explanatory. Simply put, it is a unique way to let individuals use or experience a particular NFT for a limited period without actually having to own it.
The rented NFT can be anything including, but not limited to, in-game assets, collectibles, art, or even financial NFTs.
The whole rental process takes place via a smart contract between the lender and the borrower in a transparent and decentralized manner. It could be either collateralized lending or collateral-less lending depending on the platform used and the terms agreed upon by both parties.
The benefits of NFT renting are multifold. At the basic most level, the NFT rental industry lowers the barrier to entry for people interested in the asset class. This is important because, with the kind of buzz the NFT industry has created worldwide, an increasing number of people are looking to embrace the asset class or at the least, are looking to give it a shot.
However, if recent trends have taught us anything, NFTs can be filthy expensive sometimes — especially the popular ones generating a lot of hype. What NFT rental could possibly do is to make even these expensive NFTs — or any NFT, for that matter — accessible to a wider group of users who couldn’t otherwise afford them. Think of renting a luxury car for the weekend — it works pretty much the same way at the conceptual level.
Depending on their experience with a rented NFT, the renter may even consider purchasing it to have permanent ownership.
What is in it for NFT owners?
NFT rental platforms like IQ Protocol make it possible for NFT owners to lend their assets to third parties in a trustless and transparent manner. This is perhaps the safest and easiest way to leverage your NFT stash to generate a steady avenue for passive income.
Collateral-less NFT renting on these platforms allows NFT owners to rest assured knowing that their original assets would always remain safe in a smart contract. The ownership of the assets is never actually handed over to the borrower.
NFT renting in the age of the metaverse
It goes without saying that the metaverse is already taking off as the next big thing in the world of decentralized tech — much like DeFi did in 2020 and NFT in 2021. Most importantly, the rise of the Metaverse won’t come at the cost of either of the two preceding phenomena in the crypto space, i.e. the DeFi and NFT booms. In fact, there is logical and factual evidence to show that NFTs — NFT renting in particular — will feed into the metaverse’s growing popularity.
As you probably know, the metaverse in its current shape is mostly limited to the decentralized gaming ecosystem. Play-to-earn games such as Axie Infinity, Decentraland, The Sandbox etc. are currently the main forces driving the popularity and growth of the metaverse.
So where does NFT renting fit into the gaming industry and the ever-expanding metaverse?
Well, in conventional gaming, in-game assets never really had any value outside of the gameplay itself. However, that’s no longer the case with decentralized gaming leveraging the power of NFTs.
NFTs enable gamers to take their in-game assets to an NFT marketplace and sell them to other players or collectors. NFT rental platforms add an even more practical alternative to these users.
With NFT renting, while NFT owners can simply lend their assets and earn passive incomes, the borrowers also benefit by being able to access a particular NFT only for the period they intend to use or experience it.
Ana Nesterova, Head of Marketing at PARSIQ, explained this rather succinctly when she said, “Think about paying a small fee to borrow a special game weapon or skin you need, in order to unlock the badge that you’ve always wanted. You’re not interested in fully buying the weapon, which can be costly, but you’re willing to pay a fee to borrow it for one week.”
Before we move on to the next segment, note that play-to-earn games are just one avenue for NFT rental platforms like IQ Protocol to demonstrate their benefits and exert their growing prominence. Going beyond that, NFT renting could potentially emerge as an equally practical alternative for experiencing other types of NFTs including NFT music, NFT art, and what not!
NFT renting on IQ Protocol
For starters, IQ Protocol pitches itself as a comprehensive DeFi framework enabling everything from NFT renting to blockchain subscriptions. It is a decentralized multichain market for three main purposes including:
- NFT renting: For collateral-less renting of non-fungible tokens including in-game assets, collectibles, art, financial NFTs, etc. for a pre-defined limited period.
- Fungible Token Renting: For renting fungible tokens allowing specific utilities such as voting power, membership discounts, access to products or services, and so on.
- Blockchain subscriptions: IQ Protocol allows users to rent tokens that could be used for subscribing to software, media, or other content in a trustless way.
The beta launch of IQ Protocol took place on June 30, 2021, with the vision of helping the blockchain industry to adapt and cater to the Web3 world.
In less than six months since the beta launch, IQ Protocol had onboarded more than 30 projects that proceeded on to implementing IQ on their respective platforms including the likes of Coreto, Mysterium, Solcery and Sator, among others.
At launch, IQ Protocol was overseen by Binance-backed blockchain monitoring and workflow automation platform PARISQ. The IQ team claims to have generated 300,000+ PRQ to date.
Benefits of IQ Protocol
As you can see, IQ Protocol targets there three distinct groups of users. These are:
- NFT owners
- Gamers and NFT users
- Blockchain projects
Benefits of coming aboard on IQ Protocol for each group include:
For NFT owners
- IQ Protocol turns NFTs into much more than capital sitting idly in a wallet. It turns them into an investment that could also generate a passive income.
- NFT owners don’t have to worry about default risks. IQ Protocol deploys a smart contract that allows renters access to only a wrapped, expirable version of the original NFT. Therefore, the original asset is not spendable and the ownership of the original owner remains uncompromised.
- On IQ Protocol, NFT owners do not have to commit to a fixed term. So long as there is enough liquidity in the pool, they are free to withdraw all staked assets along with all rewards earned.
For gamers and NFT users
- Users don’t have to pay hefty amounts to use an NFT they only need it for a specific purpose and for a limited time.
- Users can rent an NFT without paying any collateral whatsoever.
- In the event that you are done using your rented NFT but still have some time left until the rental contract expires, IQ Protocol enables you to earn from such assets by making them available on secondary marketplaces. Note that this is a feature still in the making and will be implemented at some point.
- IQ Protocol enables GameFi, NFT marketplaces, as well as social and creator platforms to easily integrate IQ for NFT renting.
- Project developers can use IQ SDK to build a subscription economy for their products.
- Projects can incentivize token holders by offering them passive rewards if they stake their assets in IQ Renting Pools.
For more information, visit the IQ Protocol official website.