NFT Renting is the Future of Web3
With missing financial infrastructure around NFTs — NFT Renting is quickly changing the game.
With the increased accessibility and affordability — The possibilities enabled by this technology provide the industry with such a long and deep runway that predicting the size of this market is nearly impossible.
NFTs are everywhere these days, shilled from every corner of the globe and in endless streams of Twitter threads. Everyone wants in on the action, from Snoop Dogg to Grimes, all the way down to your local postman and barista. The consequences of the excitement are obvious.
Nansen published research that the market for NFTs is growing, while there were only 500 people minting NFTs at the start of 2021 and there are now a staggering 1.2M as of First Quarter end in 2022.
The current NFT ecosystem has no income generation mechanisms, only speculative price increases over time or trades. NFT renting allows you to enjoy the benefits of having an NFT without the financial commitment of purchasing one. But why rent or lend an NFT? For the renter, the answer is straightforward: to make money. Renting establishes a secondary economy in the NFT ecosystem, where NFTs are frequently left idle in the user’s wallet. It provides a source of income for the renter. For Instance, consider a Membership Access pass to a Web3 game. When the NFT holder’s membership is not in use, the Lender can rent it out to others and profit from it.
According to the borrower, NFT renting is a cheap way to enjoy some of the NFT’s utilities, such as access to exclusive members-only content, without spending hundreds or thousands of dollars to purchase them.
Typically, the renting model uses Collaterals. To protect the lender’s interests, the renter is required to deposit collateral worth more than the NFT. In addition, the renter must pay a rental fee. The NFT is returned to the original owner after the contract expires, and the borrower receives their collateral back. But this creates a large barrier in the form of owning enough Collateral. The alternative to this is Collateral Less Renting. But most of the solutions to this are wrapped NFTs which do not provide the needed level of security around it.
Deefy’s secure protocol allows for added safety via its smart wallet. When renting on Deefy’s protocol, both the asset lender and the renter benefit. Because the original NFT never enters the renter’s wallet, lenders can be confident in the security of their digital assets. Renters, on the other hand, are not required to put up any collateral, reducing the impact on their financial assets.
NFTs are not going away. In all likelihood, they will have varying degrees of impact on all industries in the coming years. As a result, the NFT rental industry is poised to take off, allowing all Web3 economy participants to gain access to virtually any NFT, regardless of the underlying value of the original asset.
From lenders to borrowers to the NFTs themselves, everyone stands to benefit.
Feel free to reach out if you want to know more about NFT rentals and how you can integrate our solution into your project.
Deefy is a decentralized protocol that enables financial utilities on NFTs such as Renting, Lending, and Pay Later.
Deefy’s vision is to create a revolutionary shift by introducing a truly decentralized ecosystem and creator-centric financial instrument for creators, influencers, Gen Z & micro-financiers.
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