in late June The new Ethereum token standard called ERC-4907 has reached its final stage of development. This allows users to borrow NFT tokens.
ERC-4907 adds a new role to the NFT standard, separating who is the owner and who is the user of the NFT, and makes it possible for a tenant to use the NFT until the lease term expires. NFT automatically returns to owner.
“Prior to ERC-4907, every time you transfer an NFT, you lose ownership,” said Lareina, growth leader of Double Protocol startup that creates leaseable NFT infrastructure and developer of the new token standard. But with the separation of ownership and use rights, the NFT will now be able to borrow and rent.
To ensure that rentable NFTs are not officially available yet, reaching the “final” means that Ethereum proposals or projects aimed at improving the Ethereum blockchain can no longer be updated. Other builders can integrate that offering with smart contracts without fear of developers changing it later.
When built into smart contracts, rentable NFTs have the potential to disrupt blockchain gaming, metaverse land sales, blockchain-based media platforms, and more.
How to make NFT for rent
Most NFTs, such as Bored Ape Yacht Club, CryptoPunks, and Azuki, are built or are in the ERC-721 token standard, which represents the ownership of a verified digital or physical asset on the Ethereum blockchain.
These token standards require NFT owners to have that NFT in your wallet, but NFTs created under the ERC-4907 token standard separate ownership and use rights with digital assets. The ERC-4907 token standard can wrapped existing NFTs that are completed under ERC-721 or other Ethereum standards, enabling the wrapped NFTs to be read with rentable NFT exchange smart contracts, and lending or renting virtual rails. that it was developed under the ERC-4907 standard
In addition, owners can set parameters for when individuals may use the leased NFT. The user will no longer be able to use that NFT and the leased NFT will be returned to the original owner. whereby the owner does not have to request the return of the property by himself
Where can the rentable NFT be used?
NFT license sharing is not new. Previously, there were Gaming guilds that bought expensive NFTs for most players and loaned them in exchange for a portion of their profits. by such guilds as Yield Guild Games (YGG) took place in late summer and early fall of last year for Axie Infinity When the popularity of the game is at its peak
“When the owner gives permission [ของ NFT] It’s very risky,” the creator of Double Protocol, which uses Shrug Newton, told The Block in an interview. “You have to trust the guild. If the guild disappears Shows that you have lost your property.”
However, ERC-4907 allows users to create do-it-yourself guilds from the precious NFTs they already have. where the lessor can charge the rent and the user can collect the profits earned by playing the game. and they can do so in a trustless and permissionless manner. Leveraging Ethereum smart contracts, Lareina said.
While this may seem like a threat to the guild business model, Double Protocol considers blockchain-based gaming guilds as market makers. And it often provides liquidity for rentable NFTs, and established guild organizations like YGG can take advantage of ERC-4907, making their guilds more decentralized.
Lareina added that Double Protocol considers gaming guilds to be a major stakeholder in the rentable NFT market. and want to satisfy them This could include creating tools where guild organizations can create new guilds with the click of a button. as well as how to control how game revenue is split between lenders and tenants.
In addition to gaming, rentable NFTs can also be complemented in the metaverse land use, with Lareina noting that metaverse landowners can rent their assets for various activities, and if an investor purchases a plot of land but lacks the ability to “lease” their assets. building on it They can lease the land to the other party to build it and earn the rental income instead.
The technology can also facilitate web3 library rentals or free product trials, Lareina added.
Overall, rentable NFTs unlock new markets for NFT licensing now that they have separated from ownership, Lareina said. “We are building our products with this philosophy.”
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