New token standard will allow NFT rentals

New token standard will allow NFT rentals
Image Credits: CNBC

A new Ethereum token standard called ERC-4907, which reached the final stages of development in late June, adds a new NFT standard which will allow users to loan out their Non Fungible Tokens (NFTs) for a pre-designated price until a fixed date.

Lareina L., growth lead for Double Protocol, a startup building out rentable NFT infrastructure, and the developer of the new token standard, explains that the new standard offers new permissionless ways of splitting up ownership and usage rights: “Before the ERC-4907, every time you transferred the NFT, you lost your ownership.”

Where NFTs minted under the ERC-721 token standard require the holder to purchase the NFT, such as in the case of play-to-earn game Axie Infinity where you need to purchase an Axie to play, NFTs minted under the new ERC-4907 token standard allow you to use it for a limited time then give it back to its original owner, such as renting out a virtual property for a certain event.

Furthermore, the ERC-4907 token standard can be wrapped around existing NFTs minted under ERC-721 or other Ethereum standards, allowing it to be read by the smart contracts of rentable NFT marketplaces, and be loaned or rented as if it were originally minted under the ERC-4907 standard. 

Once built into smart contracts, rentable NFTs can be utilized for a variety of use cases, including metaverse real estate, blockchain gaming, free product trials and blockchain-based media platforms. 

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