We are at a point in time where “NFT” is a household term. According to DappRadar, NFT market capitalization has passed $22 billion, a 22,000% growth compared to the same period a year ago. So as digital asset ownership seems to be reaching a peak, the question now is – what’s the next big thing for NFTs?
In the immediate future, the leasing and borrowing of NFTs as a source for generating passive income for owners and gaining added value for borrowers will take the center stage in the industry.
NFT leasing has been already starting to gain traction, mainly via closed environment scholarships on P2E games such as Axie or virtual land within specific metaworlds such as The Sandbox. These initial examples of NFT leasing functionalities, pushed by some of the top crypto projects in the industry, help solidify and direct the rise of an upcoming robust economy revolving around broader NFT use cases and utilities.
While these closed-environment NFT leasing protocols introduce a viable business model that provides appealing passive revenue streams, there is a bigger picture and a much higher potential for massive gains generated through leasing of NFT ownership rights, and this is where nFLARE DAO enters the frame: a self-governed marketplace for NFT asset rentals. A ®evolutionary new model of NFT marketplaces
As social creatures, humans care about where they stand in the social hierarchy and how others perceive them, so when you give someone the impression that you have a lot of money, most likely they will have a different opinion of you. In the real world, some individuals hire a Ferrari for the weekend so that they can appear more affluent, which in turn opens opportunities and broadens their connections. On social media, this form of “peacocking” is very common. People pay a lot to have a high-priced NFT as their profile picture for a week, especially now that Twitter NFT validation has made it more relevant than ever before, or simply as a marketing ploy to boost the credibility of their commercial profile.
But if we step aside the digital social ladder, the pure financial logic of making leasing NFT rights available on a large scale is outstanding in its potential for generating value, financial or otherwise, and has a wide reach across niches. The use cases
Unlike most assets in crypto that don’t fulfill a real utility, if used as intended, NFTs offer real valuable use cases for gamers, investors, content creators/artists, and of course, traders looking to generate passive income deriving from their specific niche of interest or work. Some of the examples of NFT leasing we will see include: In-game leveled up characters, assets, gear, and future skins
Metaverse real estate investments
Copyrighted collectibles available as online and offline merchandise
Copyrighted content that can be used as creative in audio and video for royalties or as consignment inventory in galleries and exhibitions
Limited access to venues
Play-to-Earn (P2E) gaming is and will be a vertical operating independently of market sentiment, as it doesn’t matter if the crypto market as a whole is bullish or bearish, gamers will do what they do – play games and earn rewards while doing it. Making this niche of the industry, which is already huge, an easy target for borrowing NFTs in P2E gaming.
Some stats to understand the market share:
There are roughly 3.1 billion gamers across the globe, with around 1.42 billion in Asia, 383 million in Latin America, 261 million in North America, and approximately 668 million across Europe. Oh, and the Gaming industry revenue reached $175.8 billion in 2021.
Today, there are farms where NFT gaming characters and gear are professionally built, leveled up, and sold. The problem is that the owner of the NFT is losing on the appreciation value of the asset in the long run. Leasing NFTs on the other hand, which also function as a multiplier of the potential yield on the original investment, solves this problem and introduces a win-win scenario for both the lessor and the lessee of the NFT asset.
Through NFT leasing, gamers, as borrowers, can rent NFTs they can’t afford to buy or that are already leveled-up and use them to access restricted areas or as tools for boosting their in-game rewards. Lenders (the NFT owners leasing out the asset) will receive a cut, through a revenue-share model, of whatever cryptocurrency the borrower earns while playing, similar to scholarships, but across different projects and different assets. Looking to collect royalties?
source nFLARE Technology Shines a Spotlight on a Unique Model of NFT Marketplaces