As the ‘Airbnb of the Metaverse,’ NFT Rental has a lot of room for growth, according to analysts

According to a recent research by Asian digital asset platform Matrixport, the non-fungible token (NFT) rental sector is displaying significant development potential, meriting close attention as the “Airbnb of the metaverse.”
According to the paper, NFT financialization is “distinctively split into the five verticals of fractionalization, renting, pricing, lending, and aggregation,” based on the existing scenario.
It claims that “these critical primitives must be constructed for the financial layer to work efficiently and scale” in order for NFTs to provide liquidity and yields.
According to the study, NFT rental can take the following forms:
Renters pay rent and receive a wrapped NFT, while their lenders lock the tokens into the protocol and secure rent; expirable dual-role NFT, which allows renters to take on the role of users and the NFT expires automatically once the rental period has ended.
The authors of the paper argue that the NFT rental market will continue to be a hot topic as blockchain games, guilds, and the metaverse become more widely adopted. The rapid development of virtual experiences is likely to result in a huge number of idle NFTs held by users, guilds, and projects.
According to Matrixport, “it is critical to have an active rental market available to lower the cost of participation and improve existing users’ engagement through rental income.”

“In this market, we believe that a collateral-free rental model with a product design that separates ownership and utility of an NFT will win.”

However, the authors acknowledge that, because there are no uniform minting rules created around NFTs in terms of the separation of ownership and utility, NFT rental protocols in this arena will need to work closely with projects to build a reputation and trust around their services.
Projects including Double Protocol, reNFT, IQ Protocol, and Pine Loans are aiming to provide answers to this problem using diverse architectures, according to the paper.
It came to the conclusion that

“In addition to the separation of ownership and utility of NFTs, we can expect new use cases like reserving or subletting NFTs (i.e. the Airbnb model in NFTs), instalment loans, and buy-now-pay-later options to be developed, which will open up a new range of applications for games, guilds, metaverses, and NFT projects for users to use.”

 

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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