ReNFT: Building the Web3 Sharing Economy
What is ReNFT?
ReNFT is a multi-chain NFT rental protocol and platform that can be whitelabel integrated into any Web3 project to enable collateral-free in-house renting, lending, and reward sharing (scholarship automation).
In March 2021, before the initial launch, we connected with Nick Vale, Founder of reNFT labs, the team behind the ReNFT platform. We were quickly impressed with the user-centric and execution-focused culture of ReNFT. The team aggregates experience from Sandbox, Rarible, MetaCartel DAO, Gitcoin bounties, across gaming, finance, design, and smart contracts.
This conviction led us to introduce them to Gabby from YGG, who has since become an angel investor. YGG itself also inked a partnership with ReNFT for scholarship automation. We later invested in the funding round, led by Animoca Brands.
Over the past year, reNFT shipped collateral-free integrations (native rentals), went multi-chain across Polygon, Solana, and Avalanche, and built a steady pipeline of notable users and partners such as Rarible, MetaSoccer, Animetas, and Galaxy Fight Club.
Along the way, the team has always been open to feedback, responsive to introductions, and professional in communication. So it was a natural decision for us to double down in this investment round, led by Mechanism Capital.
The problem: What irritates NFT holders and how reNFT might help:
NFT communities and Web3 games face a dilemma. On one hand, PFPs and games want as many people as possible to join the community. On the other hand, there is the upfront capital cost required of buying NFT assets and limited yield generating utilities associated with these assets precludes long tail of community participants.
This particular pain point led to the creation of NFT gaming guilds with billion dollar market capitalization. These guilds own NFT assets, and rely on scholarship managers to share access with scholars, then share in the revenue from the play-to-earn economics. This process is currently done manually by sharing accounts and passwords, and poses potential operational security risk, which limits the growth potential.
In order to scale up, the most straightforward solution is to enable the rental or leasing of NFTs natively within games, which creates a “free to play” or “pay per use” experience, while maintaining private ownership with upside. Potentially this allows the long tail owners of NFT assets to participate in the yield generating opportunities.
ReNFT’s vision is to integrate NFTs lending and renting seamlessly. This covers assets from gaming items to P2E assets, to IP rights and potentially to physical / digital real estate.
This will allow asset owners to rent assets out directly in-game. Of course, guilds can potentially also make use of this solution to streamline their scholarship management. But beyond that, a few other possibilities are unlocked:
- Guilds are no longer constrained by their own capital, and can now focus on recruiting and training scholars, which supercharges the scaling potential of guilds
- The long tail of asset owners can earn yield without managing scholars, turning gaming NFTs into passive productive assets
- Gaming projects themselves gain a new revenue stream, and can even become “buyers of last resort” to guilds or investors because they are able to monetize these assets directly
Further projecting into the future, native rentals complement emerging ideas that can transform the economics of NFTs. For example, an NFT mortgage that pays itself off the more you play the game, which could unlock the supply constraint from breeding or initial sales. Rentals are the primitive for a sharing economy, or for NFTs like PFPs which function as entry tickets into events, or for metaverse assets such as clothing and virtual spaces.
ReNFT’s Rental Solutions and Core Features
ReNFT plans to support 3 different types of rental solutions: traditional rentals（upfront payment, collateral-free, reward share(coming soon) and collateralized rentals.
- Traditional rentals (upfront payments) work in a similar way to how people would have rented a DVD or movie. It’s done by escrowing an NFT into the protocol’s registry smart contract. For a project to make use of this, they are required to support a collateral-free solution to load in rented assets which can be done by integrating the reNFT SDK.
- Reward share (Scholarship Automation) is an automated and trustless solution to distribute in-game rewards.NFT holders are able to lend NFTs to others with a pre-defined revenue share split for that specific asset. The protocol will automatically distribute earnings.Scholarship automation is the most exciting feature for utility NFTs holders and can be found in more detail on reNFT’s educational post.
- Collateralized rental solution gives the renter full custody of the NFTs throughout the rental period. The NFTs will be transferred to the renter’s wallet in exchange for a collateral deposit and more information can be found on doc.
According to Dune Analytics data, the total amount of NFTs lent out by reNFT has significantly increased over the last year, the amount of NFTs lent using the reNFT protocol in the previous year hit 700, and monthly lending volume reached a record high in August 2022.
At the same time, reNFT’s user community is expanding. Twitter followers have increased 5x since the last fundraise while Discord community members increased 2x, making it one of the most popular NFTs rental platforms in crypto.
Furthermore, diverse use cases are made possible with leverage of composability for the builders community, reNFT as the NFT infrastructure layer is open to integrations or partnerships to unlock the full potential of utility NFTs.
For metaverse/ games:
- Holders of virtual land and P2E game assets can generate revenue by lending to branding agencies and P2E players.
For liquidity mining / APY Multiplier:
- With integration with Charged Particle (NFT’s yielding protocol) ,NFT artists can convert their NFT collections into “nested NFTs” to generate interest and earn higher APYs on reNFT.
For community gated access.
- Provide a rental ecosystem for NFTs tickets that grant access to fan clubs.
For DeFi insurance / loan for NFTs:
- Exploring the potential of fixed rate NFT lending and insurance.
With multi-chain support and fully customized whitelabel solution, more and more exciting functionality are yet to be discovered.
What about other NFT rental solutions?
In the existing market landscape, there are several approaches to attempting to tackle the NFT rentals problem for different verticals. Both reNFT and Rentable are more generalized focus rent marketplace,also there is growing space for specialized rental platforms such as Double Protocol and IQ protocol for gaming utility NFTs renting and LandWorks(EnterDAO) for virtual land lending in metaverse.
LandWorks team has submitted and finalized a new token standard ERC-4400 as an official extension to the ERC-721 standard. It is a separate standardized consumer role which is an actor that does not have transfer permissions, but has rights for “consuming” the NFT. Recently Double Protofol (EmojiDAO) has finalized the ERC-4907 standard that can split between ownership and the right to use of NFTs, enabling the renter to use the utility NFT until it expires, then automatically sending it back to the original owner without collateral requirement.
We will continue to invest in the NFT infrastructure as a web3 native VC and provide a solid foundation for the community.
How LongHash Ventures can help
At LongHash Ventures, we continuously engage early stage teams, even pre-product, through our fund and accelerator. Guided by a Web3 native thesis, an inclusive multichain ethos, and an infrastructure-focused lens, we take pride in our track record of being hands-on early investors across the Web3 stack: from Layer 0s like Polkadot to DeFi pillars like Instadapp and Balancer to DAO infrastructure like Snapshot to NFT infrastructure players like reNFT.
We are excited to create a Web3 sharing economy with reNFT, and welcome you to reach out and join us!
P.S. Wen token? Alpha leak: Airdrops are earmarked for contributors and Astrocat community NFT holders, so come and help out! 😉