What is NFT Renting and How does it work?

NFT Renting Explained

There are a lot of different token offerings when you dig deeper into the NFT space. Even though each of these token offerings is different and unique, the majority of them all have high prices in common.

NFTs are definitely not cheap to buy or collect. Even the cheapest NFTs from well-known projects like Bored Apes and Cryptopunks cannot be purchased at a price that is within the means of the average person. In this scenario, NFT rental enters the picture. It means exactly what you might think: tokens are rented out to customers so they can get a taste of what it’s like to own an NFT and use its services.

What is NFT Renting?

A particular NFT can be rented out to someone else who needs it for a short time by the owner. Defi-like blockchain technologies are used in NFT rental marketplaces to ensure that the NFT is returned to the owner at the end of the rental period.

Now that most of us know how NFTs work, we can all agree that they make great business ideas possible. However, innovation is developing at such a rapid rate that it is becoming increasingly difficult to keep up.

How to rent NFTs?

NFTs can be rented out in two general ways: collateralized renting and collateral-less renting.

Collateralized renting

Owners can list their NFTs on a marketplace with built-in lending and borrowing features. The borrowing procedure, which would involve incorporating the NFT into a smart contract, would then begin for renters interested in the NFT. The conditions of the smart contract would then be agreed upon by the renter and lender. After the terms have been agreed upon, the rental process begins.

To protect the lender’s interests, the renter must deposit collateral worth more than the NFT. The renter is also responsible for paying a rental fee. After the contract expires, the borrower will receive their collateral back and the NFT will be returned to the original owner.

Collateral-less renting

The process of renting without collateral is similar to renting with collateral. The only difference is that, unlike collateral renting, the renter never receives the initial NFT. Instead, a wrapped NFT with the same features as the original asset and backing from the actual asset is created for the renter. When the contract comes to an end, the wrapped NFT is burned. Neither the owner nor the renter is required to provide collateral in this scenario. As a result, both parties reduce their financial risk.

Why would an individual rent an NFT?

The utility is present in the majority of NFTs. This utility almost always has a market price. This means that the NFT owner might not always want to or be able to use this utility. Instead, they might rent out the NFT to make passive money from their assets.

Renting from the NFT is a cheap way to use some of the NFT’s services without having to pay hundreds or thousands of dollars for them, like access to exclusive content for members. Look at Stoner Cats, for instance. This NFT project, which was developed by American actress Mila Kunis, grants access to the associated animated television program to holders. By renting the Stoner Cat NFT, the renter, who may have seen all of the released content, could make money from their holdings. You watch the content and then return it, just like when you rent a DVD or movie from an online library.

Where can I get NFTs to rent (NFT Rental platforms)?

NFT rentals still have a relatively small rental market. This is why there aren’t many NFT rental marketplaces yet.

Still, Here are three NFT renting platforms to know about.

  1. reNFT
  2. UnitBox DAO
  3. IQ Protocol


The primary objective of reNFT is to make it easier to rent NFTs. As the first NFT marketplace with fully integrated reNFT renting protocols, the platform even signed a partnership agreement with Rarible.

reNFT primarily provides a protocol layer for renting ERC-721 and ERC-1155 NFTs from one another on the Ethereum mainnet.

Technically, you must add your NFT to their listings in order to lend NFTs using reNFT. These listings are compatible with smart contracts. The NFT price, which is provided by the borrower as collateral, the rental period’s duration, and the rental price are all determined by the lender.

The borrower’s collateral and the lender’s NFT are held by the reNFT smart contract, which serves as a guarantor. After the NFT has been returned to the smart contract, the borrower receives the collateral. However, the lender may seize the collateral if the NFT is not returned.

UnitBox DAO

A blockchain startup called UnitBox DAO believes that NFT renting can make it simpler for more people to join the GameFi universe’s play-to-earn ecosystem. The platform demonstrates that the concept of NFT renting, character skins and equipment, and in-game land plots can all function effectively together.

Although UnitBox’s rental system is still being tested, the DAO plans to let people rent without having to provide collateral. A protocol that produces “wrapped” versions of the NFT that the lender can call back at any time will be used to accomplish this.

The DAO says it is working with some of the biggest NFT companies, but it doesn’t say much about these companies.

IQ Protocol

Another NFT renting startup, IQ Protocol, plans to produce wrapped, collateral-free NFT rentals. However, the rental duration will be fixed by their smart contracts with an expiration date. Similar to UnitBox, the marketplace for IQ Protocol rentals is still in the beta stage and has not yet been fully operational.

There is a long way to go for both Unit Box and IQ Protocol, as well as the DAOs and protocols that use them before they can convince the rest of the NFT ecosystem that this project is worthwhile. The idea is both intriguing and tentative, as with many things that originated on Web3.

Can NFT Rental Be Profitable?

If you own assets that are in high demand, renting your NFTs can help you earn money passively. Due to the fact that many games in the NFT industry require significant initial investment before you can begin earning money from them, the idea is very popular among people who play games for money. This can cost anywhere from $1,000 to $10,000 or more.

You can borrow the NFTs needed for these games from gamers who can’t afford them but still want to play them. In most cases, these NFTs are in-game tools, characters, skins, or even land plots that give players an advantage over rivals. Players give you, the lender, a portion of the cryptocurrency they earn from online combat, farming, or racing in exchange for renting the NFTs.

Final words

It seems odd that you could rent out your NFTs or rent them to someone else. You are borrowing a digital asset for any reason, including to play a game or make money. Be that as it may, as a general rule, is it any not the same as getting a game or book from a companion and afterward returning it later?