On June 28, the rentable NFT standard “EIP-4907” submitted by the NFT rental marketplace Double Protocol, passed the final review by the Ethereum development team and became the 30th ERC standard with the status of “Final”.
An extension of ERC-721, the standard ERC-4907 implements the time-limited role of ‘user’ and authorizes automatic expiration through the innovative ‘expires’ function. The addition of the ‘expires’ feature is integral to the process of NFT rentals, no longer requiring NFT owners to manually withdraw user rights – complicated by the multiple simultaneous leasing of NFT assets – resulting in reduced gas costs.
Why was a standard needed and what does it mean for users?
The surge in popularity of NFTs saw a demand for its acquisition, with the introduction of the metaverse and play-to-earn (P2E) establishing unprecedented functionality and utility of the assets. Gamefi, currently priced at $21 billion dollars in the $170+ billion gaming industry, requires unparalleled contributions from NFTs while in the metaverse, NFTs aid in the creation of virtual communities and digital economies, further increasing NFT usability.
However, exorbitant costs for purchase and hyperinflation decreased accessibility for the mainstream user. The evidence of asset value and usage value quickly made NFT rental platforms an inevitable necessity, having the additional ability to sway the liquidity of the NFT market.
The critical conflict to ensuring a risk-free seamless rental experience was the need for separation of ownership and usage rights of the NFT. Although various solutions existed, such as the use of collateral to protect lenders from NFT-loss, the lack of distribution of property rights made the models ineffective, and large mandatory deposits failed to increase access to NFTs.
Dual-Role, through ERC-4907 poised to become one of the most important token standards, proved itself to be the best architecture in separating the rights of the owner and user due to its easy implementation, security, and a high degree of composability. The ‘user’ role permits access to addresses, allowing usage within a period without being granted the right to transfer the NFT. The adoption of this model as the standard for NFT building will see faster innovation and growth in the NFT ecosystem.
Without the standard, Gamefi projects require long codes for the integration of Double Protocol. With ERC-4907, no coding is required and the timer feature allows for the elimination of yet another on-chain transaction.
ERC and EIP
Ethereum Request for Comment (ERC) is a specialized subtype of EIP – Ethereum Improvement Proposal, relating to application-level changes that do not affect the Ethereum protocol itself. Simply put, EIPs are drafts of ideas for new features or design functions put forward by any community member to be reviewed by stakeholders in the Ethereum ecosystem.
The life cycle of an EIP involves distinct stages. An ‘idea’ must first be ‘drafted,’ allowing the proposal to be put into the EIP repository by an EIP Editor. The proposal then enters the ‘review’ stage, during which an author requests a date for peer review. An Editor assigns the proposal a ‘last-call’ status at the end of which it must be granted a ‘final’ state, typically after 14 days.
Any EIP can be pushed into the ‘stagnant‘ state if left without progression for six months. A high level of technical competence is required for an EIP to be submitted, and a successful ERC is one that has not only entered a state of ‘final’ but is also in use by projects.
Some of the most important standards currently already in use are ERC-20, ERC-721, ERC-1155, ERC-4626, and ERC-777.
ERC- 20 enables the implementation of all fungible tokens based on the Ethereum network.
ERC-721 allows for non-fungible tokens (NFTs) while ERC-1155 is the standard by which bundled trades of multiple token types (both fungible and non-fungible) can occur.
ERC-4626 is the Tokenized Vault standard with high composability, facilitating all yield-bearing tokens.
ERC-777 is an extension of ERC-20 and increases its functionality by describing the interface of token contracts and permitting the holder to reject tokens or ban them from addresses.
Double Protocol’s objective
ERCs facilitate the realization of Ethereum’s cross-platform portfolio. The launch of ERC-4907 will simplify collaboration between all applications under yet another unified standard.
Double Protocol is building the infrastructure of GameFi and metaverse. It has been their objective to give partners 0-code license-free access through continuous optimization of the partner access process. ERC-4907 enables smooth integration without the need for code, enhancing interactions between all partners adopting the standard.
For Double Protocol, the application of this latest ERC is feasible due to unfinished NFT contracts. However, projects that can not similarly upgrade their own contracts can utilize ‘Wrapped Dual-Roles’, a comparably sophisticated ERC-20-compliant resolution, where new NFTs are minted with the user information “wrapping over the original”.
The approval of the rental NFT standard marks the beginning of further mainstream applications of the Ethereum network, with Double Protocol as a forerunner.
Photo by Markus Spiske on Unsplash
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