Rent-to-earn: Unlocking NFT rentals without collateral for GameFi and DeFi

Renting NFTs This innovative approach to renting NFTs is set to become integral to the DeFi and GameFi sectors by effectively minimizing entry barriers and expensive transaction fees. According to a report by ReportLinker, the GameFi market is projected to exceed $74.2 billion by 2031, attracting more players who are eager to monetize their gaming experiences.

Unitbox In an engaging discussion with Metaverse Post, CEO Anton Link elaborated on how the introduction of wrapped NFTs and rent-to-earn models will revolutionize the play-to-earn gaming landscape. The company believes that NFT rentals will emerge as a fundamental resource within GameFi and DeFi.

Unitbox emerges as a trailblazer as the first protocol enabling NFT rentals without collateral. This marks a pioneering application of NFT technology and introduces a groundbreaking profit-sharing model. Their platform equips gamers (scholars) with the ability to 'rent' NFTs without charge and subsequently share profits with the respective owners.

According to Link, \"We regard rent-to-earn as a transparent investment avenue, constructed upon open-source blockchain technology. Our aim is to attract participants from the decentralized finance scene and the broader crypto landscape, while also appealing to gamers and scholars alike.\"

The challenge with conventional NFT rentals

A notable shortcoming of current rental platforms, including several forthcoming options, is their failure to address the inherent volatility of the NFT market. Furthermore, the ever-changing nature of these assets complicates the establishment of fixed rental rates or terms. crypto market and GameFi projects \"Determining a suitable rental price for various NFTs is nearly impossible due to their fluctuating values: the profitability linked to a GameFi project can alter not just daily, but even hourly,\" Link remarked. \"As a player, you cannot foresee the rental cost, nor can you predict your potential earnings from renting the asset.\"

Tackling the challenges with rent-to-earn and wNFTs

The rent-to-earn model has the potential to resolve two critical issues within the NFT marketplace, notably the daunting entry barriers. Primarily, the collateral-free nature of the protocol opens doors for players seeking funding. Secondly, it can effectively harmonize the current demand and supply dynamics present in the marketplace.

"This profit-sharing framework allows for the aggregation of the existing supply and demand between scholars, investors, and guilds,\" stated the founder of Unitbox.

The Unitbox team has introduced the wNFT solution in collaboration with the cross-chain protocol, Envelop. Co-founder Alexander Kuzin provided insight into the intricacies of wNFTs, noting that this technology enables users to set specific time frames, values, transfer locks, unwrapping locks, and even callback functionalities. The wNFT remains wrapped for the duration of the rental period and is reverted back to its original NFT status once the rental concludes, facilitated through smart contracts.

"The only viable approach to implement a rental mechanism for NFTs that features revenue sharing and operates without collateral is through wNFT, as it allows for comprehensive engagement within the GameFi sector,\" remarked Link.

NFT owners can retrieve their assets anytime

Under the revenue-sharing arrangement, NFT owners maintain the ability to reclaim their assets whenever they wish. If an owner is dissatisfied with a player’s performance, they can instantaneously terminate the agreement, as no custodial obligations exist. This contrasts significantly with conventional rental processes currently in use, where fixed terms prevent owners from reclaiming their collectibles prematurely. With revenue sharing, returning the NFT is an option that's always available.

Link emphasized, \"Adaptability is crucial within this market. Existing NFT rental options often fall short because most users don’t require fixed terms or set payments.\"

Players can use NFTs without incurring fees or confronting deadlines, while NFT owners retain the liberty to reclaim their assets whenever they see fit.

Unitbox’s CEO highlighted that now is an optimal moment to engage with the GameFi sector, which is in need of fresh investment instruments that are insulated from asset price fluctuations, thereby enabling both players and NFT holders to accrue profits. As previously stated, the technology underpinning GameFi ventures remains in its nascent stages. Even amidst bearish trends in the cryptocurrency market, the play-to-earn domain is slated for ongoing growth.

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