Utility NFTs and rentals: An interview with Double Protocol co-founder Shrug
After the “NFT summer”, NFT assets with a variety of functions and utility began to emerge, such as the financial NFTs and game asset NFTs. These NFT assets with intrinsic value are of greater chance to withstand the bull and bear market cycles than those avatar NFTs, thus taking over the trend to go mainstream.
As the owner and user of an NFT asset are often different, the demands for a “utility NFT” based rental market are expected to be exploded. The NFT rental market, which is currently in its infancy, has already attracted great attention from VCs.
Double Protocol, an NFT rental platform, recently closed a seed round funding at a $30 million valuation from Matrixport, Shima Capital, Youbi Capital, RB Capital, LucidBlue Ventures, PlanckerDAO, Capital 6 Eagle, Loopring CEO Steve Guo, Tony Gu from NGC.
AMBCrypto spoke with Shrug, the co-founder of Double Protocol, to learn more about this promising field.
1. Congratulations on the new round of funding! What is Double’s recent business focus?
At the current stage, Double is focusing on optimizing the accessing process for partners to enable 0-code and permissionless access.
The alpha version of Double’s rental marketplace has been live and supported virtual land rentals on Decentraland, which has already seen transactions made. Now, we are expanding the use cases of gaming and subscription-based NFT. Last week, we announced a partnership with Warena to support rentals of their game prop NFTs in mid-April.
2. What are your thoughts on the NFT rental market?
As you should have noticed, the concept of web3 has introduced three years ago, but it was not until last year that it was recognized on a large scale. A very important turning point in this is the rise of NFT. Almost at the same time when NFT was widely mentioned, web3 began to be brought into the public eye. It’s because NFT is the cornerstone of web3.
The biggest difference between NFT and FT is utility. We believe that utility is the future of NFT. Although the NFT boom was started by avatars, just like BYAC and other active avatar-based NFTs, they are still looking for use cases, such as games, to make their NFTs usable if they want to achieve more significant growth.
Rental is the way to maximize NFT utility. By separating the ownership and usage rights for NFT, multiple transactions of usage rights can be realized, which will greatly facilitate the use cases of NFT. Therefore, NFT rental will become one of the most dynamic markets in the NFT field. We are very confident about it.
3. What are the types of items available for rental and use cases on the Double platform?
Essentially, scenarios, where usage rights can be transferred for a specific period of time, are all applicable. In addition to the common metaverse virtual space (estate, advertising), in-game assets (gold farming for incomes), Double Protocol is also applicable to sharing economy (Airbnb, Uber), subscription services (Spotify, Netflix), licensing services (Disney), and many other scenarios.
4. What makes Double unique compared to similar projects?
- Separation of ownership and usage rights
Double Protocol achieves the separation of ownership and usage rights by introducing the dual-role standard. By upgrading or wrapping the NFT, the holding of the original NFT evolves from single-role (owner) to dual role (owner and user). This will greatly simplify the process of rental implementation.
- Auto-expiration of NFT
In the double protocol, we introduced a parameter called “expires” to implement the automatic expiration of NFT. This design is currently the first of its kind and is essential for NFT leasing, which frees the lender from any active on-chain operations.
- Easy integration with partners
Unlike the common integration approach of documenting NFT usage rights in the registry, Double Protocol adopts the doNFT mechanism to build rental agreements into other partners’ products and applications. DoNFT has the following advantages over the registry.
- Easy for the partners to read the user information on-chain.
- Easy to extend the functionality of the dApp, e.g. sublet, reservation functions, etc.
- Easy for creating derivatives, e.g. finance leases, leveraged leases, etc.
5. Can you tell us how doNFT works?
The doNFT mainly records two parts of data: the ID of the original NFT, which can easily access the information of the original NFT; and the start and end time. Any ERC721 token can be mapped to doNFT.
When the renter pays rent, he/she will receive a doNFT, which represents the right to use the land for a specific period of time. For example, you rented a parcel of land in Decentraland for three months. The corresponding doNFT represents your right to use the land for that lease period.
The doNFT can be further split into multiple shorter-period doNFTs, or combined with new doNFTs to form longer durations, for lending and renting. This effectively addresses the common problem of illiquidity for NFT and brings greater flexibility to the development of derivative financial products such as installment payments.
6. How can partners use Double’s rental integration technology?
It’s very easy for partners to integrate with Double Protocol. It is even possible to achieve integration without any extra coding if adopting the Dual Role standard (EIP-4907) recommended by Double. Even without using the recommended standard, the integration can be done with about 30 lines of code, for which we have published a code demo.
7. Could you please tell us about the team?
Double’s core team includes developers, game product experts, tokenomics designers, and marketers who have been in the crypto space since before 2018 and have extensive experience in their respective fields.
Some of the team members had developed the game LoserChick in the Polygon ecosystem, which was ranked No. 1 in the Dappradar game category in July and August 2021, and ranked No. 4 worldwide in Dapp.com’s social trending list for blockchain games one week after launch.
8. What are the other medium- and long-term goals and possibilities for Double?
Double’s long-term goals will focus on two major directions. One is to massively lower the threshold for web3 users to enter the metaverse or gamefi through rental and at the same time increase the liquidity of NFTs. The second is to extend the functionality of NFTs. doNFT is our first attempt in this direction, and we will continue to unlock functional scenarios for NFTs in the future.
Disclaimer: This is a paid post and should not be treated as news/advice.