Thu. Nov 24th, 2022

In case rent-seeking:

  • artificially inflated digital assets designed to privatise the internet for profit, weren’t already two of the worst symptoms of late capitalism — now they’re married!

On January 24, 2022, Fortune magazine posted an article (or perhaps a dreadful omen?)

with the headline “The next major trend in NFTs is to rent them out, and crypto landlords are making a killing,” which explores how Hell has been released upon the Earth so the meek might suffer more:

Play-to-earn gaming is the newest craze in the crypto world, but unless you have thousands of dollars, you probably won’t be able to participate.

Enter a concept called scholarships—a way for players to rent the non-fungible tokens used in games as tools, creatures, or skins. These NFTs, for short, are often required for playing or they give players an advantage. In exchange for renting the NFTs, players pay the lenders a cut of whatever cryptocurrency they earn while battling, farming, or racing online. Essentially, NFTs are already maturing to the point where they have de facto landlords.

This, sadly, is neither unexpected:

nor necessarily new. In August 2021, HypeBeast reported that people were renting out their CryptoPunk Avatars — fucking pixelated cartoon profile pics that trade for 6 or 7 digits — through a “new NFT rentals protocol called reNFT.” reNFT has created a licencing service that allows CryptoPunk owners to sign a transaction giving borrowers the right to display the CryptoPunk avatar as their own for a specified time period of up to 99 days.

“This transaction follows the tenant rights protocol which gives sole permission to display the CryptoPunk as your Avatar for a fixed period of time up to 99 days:

CryptoPunk.rent wrote in its FAQ section. “Tenants may display as an avatar their rented punk on Twitter, Discord, NFT marketplaces, and any other social platform where punk users congregate.” And in October 2021, CoinDesk reported that a number of venture capitalists were indeed investing in the venture of NFT rentals, wth the ReNFT protocol securing $1.5 million in a seed funding round from Lattice Capital, Play Ventures, MetaCartel Ventures, Scalar Capital, LongHash Ventures, SkyVision Capital, Fedora Capital and Maeve Ventures. Because I guess capital breeds innovation or something, IDK.

ReNFT tried to explain the appeal of NFT rentals different mediums in a post on, well, Medium, while also acknowledging that:

Currently, there are no income generation methods for NFTs except for the potential speculative price increase over time. reNFT aims to revolutionise the ever-expanding NFT market by enabling owners to generate revenue off their otherwise stale assets, and renters to use a variety of NFTs in experiences without having to be tied to owning a single one. The lender defines the rental price, collateral, and the maximum rental period. The renter specifies the rental duration, pays the collateral plus the rental price, and receives the NFT in full custody. Depending on the value of the respective NFT, the amount of collateral required can sometimes be very high, so that renting is no longer an option for most people despite the possibly low rental fees. This is why we have developed our collateral-free integration tools to allow fully trustless NFT rentals for any project!

In other words, it’s the most depressing literal manifestation of “rent seeking” imaginable:

  • And somehow people are still making money off of it. The next major trend in NFTs is to rent them out, and crypto landlords are making a killing [Marco Quiroz-Gutierrez / Fortune]

By Adam

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