NFT gaming has arrived. What was barely recognized as a sub-industry within crypto just two years ago, is now a standalone industry. The perception quickly changed with the arrival of Axie Infinity in 2021. By Q3 of the same year, the game was red hot – reflected in the growing user base, the rising value of its underlying tokens and NFTs, and stories coming out of Southeast Asia of players were games to supplement, or in some cases, replace their real-life incomes completely.
Since then, several other blockchain-based play2earn games have launched and made their mark. Splinterlands, and Gods Unchained, have proven to be quite popular, challenging the throne Axie Infinity established for itself during the previous year.
How will these experiences change the gaming industry in the years to come? How do NFT rentals connect to all this?
Let's dive deeper and see why.
Why Can NFTs Make Gaming Better?
For decades, the "transacting value" for users and games has been well understood. Users bring money and time and get a fun experience and excitement. Whether depositing coins at the local arcade or buying a video game, users have exchanged their currency and spare time to battle monsters, complete quests, and solve complex puzzles.
This experience is now evolving.
NFT games change the value proposition. Players are not only rewarded with time and experience but also with cryptocurrencies and digital assets. These digital assets are owned by the users, which they can often exchange for value at their merit. But playing to earn is not the only way the game experience transforms.
With NFT rentals, digital asset owners can monetize their assets by lending their NFTs. In addition, players who want to leverage an in-game asset may experience it by taking advantage of NFT renting capabilities. New economic models are being written by the day as new rental economies arise off NFTs.
One of the leading protocols behind this new rental economy is the IQ Protocol, a DeFi solution for gaming projects to facilitate the rental of NFTs on their platform. Using the IQ Protocol, players and NFT owners will find a gaming experience that has never been possible before.
NFT Owners And Digital Assets
In traditional games, users earn assets within the game over time. After completing a level or conquest, a player is rewarded with in-game currencies and in-game assets. These currencies and assets were previously not transferrable off-platform. Possibly, these were even non-transferrable even within the game itself. With NFTs, players who spent time accumulating these digital assets finally have a way to leverage what they've earned besides using them in the game.
With NFT renting capabilities now available through IQ Protocol, NFT owners can deposit their digital assets into the protocol and make them available for rent. From NFT game characters to in-game assets such as swords, shields, skins, and more. As long as the asset is an NFT, the owner can make them available for rent.
The upsides of this model are enormous. First, players rarely use all of their digital assets. Even if they do, they rarely use them year-round. With IQ Protocol, asset owners can agree on a set of NFT renting parameters with the renter of the asset (e.g., for a fixed amount of days) so that if the asset holder eventually needs to use it for their own needs, they can play an active role in defining when that is.
In the meantime, digital assets which would otherwise be sitting idle in crypto wallets can be deployed into the game as a utility for another player. The asset owner can earn passive income on their assets while the NFT is locked in the protocol. The renter can leverage that asset as needed for the time it is rented.
NFT Renters & The Digital Assets They Need
To get started, blockchain games often require players to hold NFT characters to begin playing. Unfortunately, these NFTs can be costly to acquire and may be out of reach for would-be players who do not have sufficient capital at their disposal.
The game in question may be of significant interest to the player – whether from a play2earn perspective or a pure fun and curiosity point of view.
Leveraging IQ Protocol and the possibilities of NFT renting, interested parties can now rent NFT characters who have been made available through the protocol. This provides a level of exposure to the game that they otherwise may not have been able to obtain – and also allows the players to earn an income within the game, thereby providing them some financial means towards getting their digital assets within the game day.
Outside of game characters, NFT renting allows traditional players to rent in-game assets that might otherwise be unavailable to them. Whether trying out a new skin or using new armor, renting an NFT for a limited time allows players a new type of experience – which could help them further decide whether they want to work towards earning a particular asset for themselves.
The Future of NFT Games & NFT Renting
NFT games have arrived, but they are still just at the beginning. A recent report highlighted a 2,000% growth in the gaming industry in the last year alone, and the number of unique active wallets participating is just over one million.
With a gaming industry population of over 2 billion, there is potential astronomical growth in store for the industry.
The IQ Protocol and the capabilities it enables through NFT rentals will play a significant role in that growth. By capitalizing on new incentive models for games and players alike, and providing a unique gaming experience and takeaway that could not exist without NFTs, the industry and what NFT renting enables within it will surely be a core component of games in the years to come.