Lending digital goods opens the Web3 to mass adoption

Lending digital goods opens the Web3 to mass adoption

NFT Rental: Digital asset rental is the next evolution on the Web3, he says Jake StottExecutive Director Hype.

Earlier this week, streaming behemoth Netflix entered the metaverse with its latest movie release The gray manstarring Ryan Gosling and Chris Evans.

To promote the new title, the streamer worked with Decentralized recreate a scene from the movie in its metaverse — an engaging experience the company calls a “metaverse mission.” In the experience, users can virtually act out a scene from The gray man and receive rewards such as free wearables for their avatars if they complete it.

More interestingly, however, Netflix has tapped into a new Web3 trend that may fundamentally disrupt the digital goods economy: virtual rentals.

A potentially game-changing technology

Typically, brands would need to own a virtual land to stage experiences in blockchain-based metaverses such as Decentralized and The Sandbox. Gucci and Adidasfor example, earlier this year he brought the country together in The Sandbox metaverse to introduce virtual experiences for his NFT campaigns.

Unlike the two fashion giants, Netflix chose to build The gray man experience on land it temporary rented from Decentraland. The move makes it easier for the brand to experiment with a new trend without the added cost of buying virtual plots of land.

While Web3 is all about ownership, renting can have huge implications for how brands and users experience and interact with the metaverse – especially if the trend takes off.

It is currently impossible to rent Ethereum-based on assets without placing your trust in third parties. But thanks to the upcoming Ethereum token standard — ERC-4907 — all of that could soon change.

If the new standard is approved, it will allow the construction of smart contracts that allow for the temporary lending of blockchain-based assets such as NFTs, without giving up ownership of those assets.

This means that anyone will soon be able to lend and rent NFTs such as land, wearables and PFPs without fear of losing them.

This development has the potential to drastically change the current metaverse and Web3 landscapes. The fact that giants like Netflix have already shown a willingness to experiment with virtual rentals to launch activations and campaigns is a testament to the technology’s promise.

NFT Rentals: Why Brands Need to Get in on the Trend

A recent VICE survey found that 57% of Gen Z think it’s easier to express themselves in the metaverse. Much of that self-expression was through virtual indulgence in real brands. Additionally, respondents indicated that 15% of their entertainment budget was allocated to digital goods and the metaverse.

These insights point to a huge opportunity for brands to increase brand recognition and engagement with digital goods. Virtual rental can play a central role in their strategies.

Data shows that over $37 billion was spent on NFTs between January and May 2022. But despite the massive volume, a fraction of internet users have yet to acquire their first NFTs. Rentals could be an easy introduction to the wonders of NFTs and their various utilities, including PFPs, wearables and maps.

Instead of directly selling digital goods and NFTs (the prices of which can often be quite high, especially for beginners), brands will be able to offer the experience of owning such assets through rentals. Similar to a return policy, this will give consumers the convenience of trying out such digital goods before committing to a purchase.

The key to adapting Web3 and the metaverse to the mainstream is lowering the barrier to entry for brands and consumers. Virtual renting has the potential to do just that.

Think about it. We’re already used to renting and borrowing clothes and accessories IRL, and we’ll probably do the same when we start spending more time in the metaverse. Before you know it, you’ll be attending virtual weddings in a virtual rental tuxedo and a virtual rental car.

about the author

Lending digital goods opens the Web3 to mass adoption

Jake Stott He is the co-founder and CEO of Web3 Super Agency Hype. When he’s not helping leading blockchain companies and iconic brands accelerate their growth, he likes to think about the future of Web3 and the metaverse.

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