NFT rental is an interesting idea when it comes to blockchain gaming, says Anton Link, co-founder and CEO of UNITBOX DAO.
Play to Earn games are still a new phenomenon in both the crypto and gaming industries. The area has enormous growth potential, as it is a strong mix of two things that everyone desires: Entertainment and money.
With the increasing spread of NFT-Rental Service, the entry into the P2E area has become even easier. These services allow gamers to rent an NFT without much hassle, while the owners get a share of the income received. In turn, NFT owners have the opportunity to earn additional passive income.
So who is the target group of NFT rental services? What kind of value does this model create for market participants? And what is the market situation at the moment? Let’s get to the bottom of the matter…
Who rents NFTs?
The audience of the NFT-Rental Service is colorful and people use it for a variety of reasons. Some tenants who want to make a name for themselves in the NFT community are more interested in short-term flexible rental periods. So you can set the NFT as a profile picture in the social networks. Art installations and exhibitions, on the other hand, may rent NFTs to initiate their openings with exciting, imaginative art or to hold limited-time events with certain pieces of these virtual works.
A significant portion of the demand comes from gamers and a popular form of NFT rental is digital land. Financially powerful landlords invest in large amounts in land and apartments in play-to-earn games, in order to then lend them to players so that they have a livelihood in the game. Such an opportunity lures players into a world where they can call a safe space their own and makes them invest as well.
The second option is renting game characters, skins, equipment, weapons, pets and other items. In most GameFi titles, these NFT items are now either a prerequisite for playing or give players an advantage in the game. Many games offer several levels of NFTs, with rarer NFTs being more valuable for the gaming experience.
With the rental of NFTs and so-called scholarships, gamers who do not want to invest in an NFT or cannot afford the purchase price now have the opportunity to rent an NFT. If a player can only afford an ordinary NFT instead of a rare one, he has the opportunity to receive a rarer NFT via a scholarship.
NFT Rental: The new market is taking shape
The popularity of Play To Earn Games has given the new niche a lot of impetus and helped the NFT rental services and scholarship providers, some of which also work independently, to break through.
In this way, for example, two entrepreneurs from the Netherlands, Maxim de Clippelaar and Mick de Bock, raised $ 12,000 for their rental service Axie University in August 2021. They have 50 fellows – all in the Philippines – and make a lot of money by providing NFTs to the users. At the same time, the two receive a percentage of all funds that their scholarship holders use.
But this market is only just in its development. More and more players are looking for ways to participate and benefit from their invested time. However, there are a number of problems that still require a solution.
Some of these problems do not lie at the heart of the gaming sector, but concern the general NFT sector. As is so often the case with new niches, some projects are overvalued at first and then fail to be implemented in the end. And, unfortunately, there are also projects aimed at quickly generating wealth and scamming investors. Therefore, the latter should always be clear about where to invest.
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NFT Rental: Simplify Adoption
How can we tackle these problems? In my opinion, one of the most important steps is to build user-friendly platforms. You can merge lenders and offer NFT authentication and profitable rental models with automatic withdrawal. Such platforms can also provide data that serves as an aid in decision-making.
Such solutions will lower the entry threshold, satisfy user demand, create more trust and educate new market participants. NFT rentals will give a boost to the entire GameFi and NFT industry and drive the development of the industry. They will contribute to more investment and liquidity and create more opportunities for players and NFT holders.
Thousands of gamers are already enjoying passive income while playing some of their favorite titles. Scholarship programs with rentable NFTs are beginning to establish themselves. It will take some time and effort (on the part of the developers) for this concept to get around and more players will participate in it.