So, the world of non-fungible tokens is weird and confusing, to say the least. And, with the recent changes in the market and web3 development, it’s even stranger than usual. Granted we’ve had fewer and fewer weird NFT projects emerging. But, this only made it harder for people to join and find a good NFT community. And so, this is where NFT renting comes into play!
Let’s ask you a few questions, shall we?
– Have you ever wanted to own an NFT but don’t have the funds for it
– Have you ever been in a situation where a new NFT dropped and you don’t have the patience to save up for it?
– Or, do you have commitment issues and can’t bring yourself into investing your money in buying a non-fungible token?
If any of these questions feel or sound relatable, then NFT renting is for you! It allows you to temporarily own certain non-fungible tokens without having to actually buy them. Let’s face it, even the cheapest of NFTs are expensive! But, what goes into the rental process and how does it work? Keep reading to find out!
And, if you’re interested in joining the NFT world in the near future, make sure to join our FREE hub. It has everything you need to know about non-fungible tokens and being part of the community. All for FREE! Click on the button below to join!
WHAT IS NFT RENTING?
So, NFT renting is borrowing out an NFT for a certain period of time. The way it works is that the smart contract acts as a deed with the conditions of the rental. Once the set time period is over, the NFT goes back to the original owner.
Purpose of NFT Renting:
– Making money online using NFTs
– Feeding into FOMO and fear of obsolescence
– Renting allows people to use NFTs for a specific purpose
– Allows you to try out an NFT before you decide to buy it
– Provide people who cannot afford NFTs the ability to enjoy them
TYPES OF NFT RENTING
– Collateral Renting
In this type of NFT renting, NFT owners put their tokens in a rental marketplace. A renter finds the NFT they want and rents the smart contract with the agreed-upon terms. The smart contract includes terms and conditions of the rental agreement including the set period. And, it includes providing collateral.
The collateral is a deposit of a higher price point than the NFT. Once the rental period is over, the owner gets his NFT back and the renter gets his collateral.
– Collateral-Free Renting
Also, the other type of NFT renting is collateral-free renting – aka, no collateral. This obviously means that the renter of the NFT does not have to deposit collateral. So, the owner lists their NFT on a rental marketplace. Once they find a renter, they agree on the smart contract terms including the rental fees and duration.
But, here’s the difference! The renter doesn’t actually get the original NFT, but a wrapped NFT instead! Once the renting period is over, the wrapped NFT returns to the smart contract where is it then burned!