NFT rental platform “Double Protocol” is a perfect example aiming to solve the growing problems in NFT sector through its newly launched Dual-Role NFT Standard (EIP-4907).
Despite gaining exposure just a few years ago, non-fungible tokens (NFTs) continue attracting many institutions, organizations, investors, and celebrities. Its underlying potential and technology have also increased beyond profile pictures (PFP), attracting more use cases from play-to-earn (P2E) gaming to real estate investment in the Metaverse.
Unfortunately, acquiring some NFTs and in-game items has gone too high amid the current global hyperinflation, among other factors, making these digital assets less accessible to average mainstream users. The market action has attracted the emergence of NFTs rental platforms to cushion the cost of accessing NFTs.
NFT rental platform “Double Protocol” is a perfect example aiming to solve these growing problems through its newly launched Dual-Role NFT Standard (EIP-4907). The new model could be the game-changer for the NFT rental market.
Double Protocol Overview
Double Protocol is described as a decentralized NFT rental platform operating on Ethereum and BNB Chain. The platform supports the renting services of virtual land in Decentraland and in-game assets in the popular GameFi project “Warena.”
Unlike acquiring in-game items, the idea behind NFT renting is simple. Double Protocol allows people to rent luxury homes and cars for a short period without necessarily owning them.
The NFT rental marketplace offers its users access to a wide range of in-game items they can choose from, including in-game assets, virtual assets, digital arts, and financial NFTs, among other collectibles.
Double Protocol has gone further to lower the minimum threshold for users to enter the virtual world “Metaverse or GameFi” through simple and inexpensive NFT rental services while attending to the liquidity and functionality of NFTs.
The New Dual-Role Standard (EIP-4907) For NFT Rental
In April 2022, Double Protocol launched the Dual-Role NFT Standard (EIP-4907), a component for NFT lending, allowing the project to separate NFT ownership and usage using the Dual-Role mechanism. The new model allows NFT owner to rent their digital assets without transferring ownership.
Notably, it would take about 30 lines of coding for any GameFi project to integrate the Double Protocol in the previous versions. But, with the new functionality “EIP-4907,” development integration can be done faster with no coding even required.
It is not the first time for the Double Protocol NFT rental platform to utilize the Dual-Role model to separate the usage and ownership of NFTs. Double has used the “Dual-Role mechanism” before, shifting due to a lack of naming consensus, making its collaboration more difficult. That is why Double Protocol proposed the EIP-4907 model.
The new model will allow Double Protocol to easily extract the user rights from the ownership if applied to the smart contract, which is the key to enabling successful rental services. Moreover, the dual-role standard has an expiry feature, allowing the borrower’s right to expire on time without an extra on-chain transaction.
Double starts with applying the dual-role contract to separate the underlying in-game assets or any other NFT into two roles, the owner and the user. Once separated, Double Protocol automatically creates a unique doNFT that corresponds with the original NFTs.
Subsequently, the NFT rental marketplace mints the doNFTs after the borrowers pay the rent and issue them to the renter as per the doNFT contract. The rental platform offers renters several usage rights during this period, including subleasing, splitting, merging, and financial derivatives.
Once the rental period expires, the doNFTs smart contract automatically revokes the usage rights of the borrower. The new dual-role model removes the barrier to entry into the NFTs space, offering collateral-free asset lending and risk-free services.
The Wrapped Dual-Roles NFT
Some existing products cannot automatically update their smart contract to achieve dual role functionality. Double Protocol has the solution for them, introducing Wrapped Dual-Roles NFTs.
Double Protocol automatically mints a new NFT featuring user information and wraps it over the original. This process is similar to the renowned Ethereum wrap into ERC-20 compliant wETH and the wNFT that eliminates the risk of double-spending as it corresponds “1:1” with an underlying NFT.
The doNFTs Functionalities
Double Protocol creates a new form of NFT called doNFTs after separating underlying in-game assets into two roles, representing a certificate for the right to use an NFT. These NFTs also ensure that the underlying NFT usage right expires as the rental period ends.
Notably, the market contract mint the doNFTs once the renter pays rent, giving them temporary usage right for a specific period until the rent expires. Interestingly, these tokens can be further splinted into multiple shorter-period doNFTs or combined with new doNFTs to form a longer duration for lending and renting.
Remarkably, the utility of doNFTs has solved many prevalent issues of illiquidities in the NFT space, creating opportunities for the development of derivative financial products such as installment payment and interoperability with other NFT financial protocols.
In the meantime, Double Protocol will continue leveraging the EIP-4907 Dual-Role NFT Standard to provide more new opportunities. The adoption will allow the renting platform to extract user rights from ownership, which is a vital element for NFT rentals.
If the dual-role gains mainstream adoption, it will serve as the optimal choice to boost innovation in the NFT ecosystem.
