Why NFTs Rental?

NFTs originated from CryptoKitties and provided for ERC-721 protocol standard. Most of the early NFTs started with artworks, and artists digitized physical artworks based on blockchain technologies, for example, oil paintings were minted into NFTs to address the problems such as authentication of artworks and artists’ income. However, what makes more people know NFTs is PFP (profile picture), which reflects holders’ identity. These two types of NFTs are of great value of collection and investment, but of low use value.

After continuous exploration, diverse application scenarios of NFTs gradually appear. At present, NFTs have been applied for crowdfunding. For example, a coffee shop issues 10,000 NFTs to raise project startup funds, based on which each NFT holder not only is a project investor, but has the right to get a cup of coffee every day during the coffee sales period. In this case, an NFT represents not only ownership value (i.e., project “equity”), but also use value (i.e., a cup of coffee every day). While holding an NFT, an NFT holder can lend the right to use NFT to any other user so that the holder can acquire the rental income, and the renter can get a cup of coffee every day. For another example, game characters and props are minted into NFTs in the game industry, in which case an NFT has both the ownership value of token appreciation and the use value of participating in the game.

When asset value and use value coexist, rental demand will emerge as a necessary supplement to the transaction scenario. More importantly, NFT rental will extend to application scenarios that are closer to business, such as blockchain game trial.