Rental NFTs

5PM. Wednesday. You must be at the office. Oh wait.

We are at the end of July, there’s actually a high probability that you are in vacation in an AirBnb in the middle of the Mediterranean sea.

Or maybe at home, just chilling.

Be that as it may, it’s very likely that you’re currently reading this post in a place that you don’t own. Indeed, it’s highly relevant to notice than in the real world, we don’t need to be the owner of an object to be able to use it. Actually, the owner and the user are most of the time two different people, and our society precisely relies on their connexion - the former capture value from the latter.

Currently, NFTs focus way too hard on the ownership’s dimension, restricting opportunities in the space.

For example, someone could be able to invest in an NFTs with X or Y use cases - access to a fashion show or real estate in a Metaverse - might not have the time or the desire to use them, and be able to lend them.

AS. IN. THE. REAL. WORLD.

Imagine how boring the world would be if we could enjoy only stuff we own: no more music, movie, museum and the likes.

Thus, our way of consuming non-fungibility in the real world is rarely through the prism of "ownership", much more through “short-lived experience” (loan and services), so NFTs must be rentable to unlock interesting opportunities in the following months.

What could be done with rental NFTs?

As we developed in our latest post, useful features are the only way to make our industry highly attractive again.

At Kanji, we believe that rental NFTs could be highly disruptive as they could make Illiquid assets, like subscriptions or fidelity programs, more liquid.

• Subscription are a dead weight in our bank accounts: we have to pay them every months and it’s hard to cancel them.
• Imagine having your gym subscription as an NFT. You could easily earn a yield on it: when you go on holiday, you could rent it for the length of the travel to people who need it for fleeting necessity.
• One could argue that it’s not aligned with the gym incentives, but with royalties, even the gym would earn a cut on this mechanism, and it would create customer loyalty by letting them experience the gym for an extended range of time!

The gym recovers royalties and increase in attendance. The primary client takes a yield on a previously completely illiquid asset and does not unsubscribe. The secondary client is more inclined to attend this gym: he would never have taken a 1-year membership.

Subscription as an NFT allow this beautiful flywheel to exist, very efficiently.

(Check our article on NFTs x Newspaper to understand how it would be useful in the media industry, for example).

Is the NFT industry heading into this direction?

• Most of the initiative proposes you to supply your NFT as a collateral and to borrow some stable-coin against. It creates deep liquidity, but it’s not the idea we were defending. Plus, it puts your beloved NFT at a liquidation risk.

• Double One is the project that is the closest to what we have in mind: an open platform where you can lend your NFTs for a given period of time.

• Major problem: too little amount of NFTs accepted for now.

• Documentation: https://github.com/ethereum/EIPs/blob/master/EIPS/eip-4907.md

CONCLUSION

As we usually say, UTILITY COMES ABSOLUTELY FIRST IN THE HUMAN MIND! We strongly believe that being able to rent your NFTs will be the next leading narrative that will bring people back in our beloved industry thanks to the endless opportunities it creates.