NFT rentals are an interesting idea when it comes to blockchain games, says Anton Link, co-founder and CEO of UNITBOX DAO.
Play-to-earn (P2E) video games are still a new phenomenon in both crypto and gaming. That said, the sphere has huge potential for growth, being a potent mix of two things that everyone desires: entertainment and money.
With the continued rise of NFT rental services, entering the P2E space has become even easier. They allow players to rent an NFT, with no virtual strings attached, and pay lenders a share of the revenue they generate. Owners of non-fungible assets in turn have the opportunity to generate additional passive income.
So who is the target audience for NFT rental services? What kind of value does this model create for market players? And how forward-looking is space right now? Let’s explore.
NFT tenants: who are they?
The audience for NFT rental services is diverse, with people coming for a variety of reasons. Some tenants looking to build their reputation within the NFT community are more interested in flexible short-term rent. This is how they can set the non-fungible as their profile picture on social media. Art installations and exhibitions, on the other hand, can rent non-fungible assets to start their openings with exciting and imaginative works of art or hold limited-time events with specific pieces.
A considerable part of the demand comes from gamers. A popular type of NFT rental is digital plots. Landlords with funding will invest in large amounts of property and housing in gambling games to earn, only to lend them to players as a form of in-game life. Such a prospect draws players into a world, offering them a safe space to own and invest them.
The second is to rent characters, skins, gear, weapons, pets, and other in-game items. In most GameFi titles, these non-fungibles are now required to play or give players an in-game advantage. Many games offer multiple tiers of NFTs, with rarer ones being more valuable to the gaming experience.
With NFT rentals and so-called exchanges, players who choose not to invest in an NFT or cannot afford the initial asking price now have the option of renting one. Or, if a player can afford a common but not rare NFT, they can opt for a purse to acquire the latter for good measure.
NFT rental: the market is taking shape
The popularity of play-to-earn games has created a lot of traction in the new niche. This has helped NFT rental services and scholarship providers take off. This gives rise to independent scholarship providers.
For example, two entrepreneurs from the Netherlands, Maxim de Clippelaar and Mick de Bock, launched their rental service, Axie University, with $12,000 in August 2021. They house 50 scholars – all based in the Philippines – and earn a good amount of money by providing NFT to users, while earning a percentage of all funds their seekers use.
At the same time, the market continues to take shape. More and more gamers are looking for ways to get involved and profit from their investment of time in the game. But there are a number of issues waiting to be addressed.
Some of these problems are not inherent to the game but to the NFT space as a whole. As is often the case with new niches, some projects are overhyped and end up failing. And, unfortunately, some hope to get rich quick and scam investors. They need to be aware of what they are investing their money in.
NFT rental: facilitating adoption
How do we approach these issues? I think one of the most important steps is to create user-friendly platforms. They can aggregate lenders, offer profitable rental models with automatic payments and NFT authenticity checks, and provide data that would help in decision-making. This is what we create at UNITBOX.
Such solutions will lower the entry threshold. They will meet user demand, create more trust and train new market players. NFT rentals will give a boost to the entire GameFi and NFT space, and contribute to the development of the industry. They will help bring in more investment and liquidity, creating more opportunities for players and NFT holders.
Thousands of gamers are already enjoying passive income by playing some of their favorite games. Scholarship programs with commendable NFTs are starting to take off. It will take time – and development effort – before word spreads and more players start to participate.
About the Author
Anton Link is the co-founder and CEO of UNITBOX DAO. UNITBOX is the first securityless leasing and rental protocol, and the first use case of award-winning wNFT technology. It relies on DeFi mechanics to bring together millions of investors, tenants (guilds, scholars) and crypto players to give them access to a high yield investment product.
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