EXPLAINER: Understanding NFT renting and what it can offer to Web3.0 landscape

Investments around the non-fungible token (NFT) space seem to have upheld its price factor. While purchasing NFTs is not considered cheap, it’s believed that NFT renting can be a viable option for users. As the term suggests, NFT renting refers to obtaining an NFT for a specific timeline, in return for a fee to the owner. 

According to Medium, an online publishing platform, seven percent of Web3.0-based games have approved NFT renting, while 18% aim to adopt it for top 100 games. The platform further stated that NFT renting can make in-game asset tokens reachable to new players. “I believe platforms specialised in NFT renting use blockchain from decentralised finance (DeFi) space to support transactions. When the rental time expires, these systems ensure that the borrowed NFT is returned to its rightful owner,” Vijay Pravin Maharajan, founder and CEO, bitsCrunch, a data analytics company, told FE Blockchain.

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Upon further understanding, it’s been found that NFT renting can be done either with or without collateral. Market research has highlighted that NFT renting can generate passive income for users through risks and rewards. As stated by Supplain, a blockchain protocol, GameFi sector can be a benefitter of NFT renting as gamers can transfer their in-game assets to a marketplace and sell them for earnings. Through the feature of NFT land rentals, future users can develop the infrastructure required to gain benefits from their online time consumed. NFT renting is believed to be helpful for both lenders and borrowers who intend to gain profits from Web3.0 ecosystem.

“I think NFT renting has emerged as a trend in the NFT community. It can benefit investors, including income generation, diversifying their portfolio, and the opportunity to explore the world of NFTs. NFT renting has potential to benefit art and collectibles, gaming industry, and more,” Alankar Saxena, co-founder and CTO, Mudrex, a crypto-investing platform, mentioned.

Reportedly, platforms such as Vera, Defy, reNFT, among others, offer NFT renting-based services to users. For example, Defy, a decentralised platform, provides facilities such as NFT rental, lending, and mortgage. Furthermore, NFT renting is expected to drive liquidity through enhancement in NFT adoption. Insights from AirNFTs, an NFT marketplace, stated that NFT renting will be a boon for those who intend to associate themselves with Web3.0 landscape, even if they lack financial stability to buy digital assets. 

“We would have NFT investors who are intent on buying digital assets with the purpose of renting them out. On the other side of the equation, we also have a breed of gamers who understand that time, skill, and talents are investments and it does not have to be coupled with investing their money in a digital asset,” Kameshwaran Elangovan, co-founder and CEO, GuardianLink, an NFT marketplace, concluded.

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