09 July 2022
2 min read
Understanding the concept: Rent-to-Earn

The world of traditional gaming was disrupted when the concept of Play-To-Earn Gaming came into the market. Play-to-earn video games offer a platform for players to earn rewards that have value in the real world. It enables players to cultivate or gather cryptocurrencies and NFTs for market sale. The idea of earning real money through gaming attracted a lot of gamers to the platform, and since then, there has been no going back.

But now, there’s a new concept in the market and the users are trying to understand more about what it offers.

What does Rent-To-Earn stand for?

Rent-To-Earn is another term for NFT renting. As the name suggests itself, it deals with people renting their NFTs. It is new and beneficial to people who do not possess a certain NFT but would like to use it or experience it for a short while, and can rent it from a platform that offers this service.

How does NFT Renting work?

So, through NFT renting, NFT owners can rent their NFTs to strangers for a definitive period and a set price. It doesn’t mean that they’re giving their NFTs away. It simply means that they’ll be renting it temporarily and will be entitled to a cut out of the earnings that the rentees make out of the NFTs.

There are usually two ways to rent your NFTs:

Collateralized Renting

  1. Owners can approach any online marketplace that allows NFT lending and borrowing and post their NFTs if they want to rent them out.

  2. If an interested party is willing to rent the NFT, the borrowing procedure starts immediately. The process is quite simple, both the parties, upon mutual agreement, deposit the NFT into a smart contract.

  3. The Smart Contract will contain all the essential details like the duration of the rental, collateral, and other conditions.

  4. Since this is collateralized renting we’re talking about, the borrower will be required to deposit collateral, which will probably exceed the value of the NFT, to maintain the safety of the lender and their assets. Other than this, the renter will also be responsible for paying a rental fee to cover the expense of renting the NFT.

  5. Post all these steps, the renter will receive the NFT and can avail of its benefits as per their requirements.

Collateral-less Renting/ Uncollateralized Renting****Bold

The process of collateral-less renting is pretty much the same as collateralized renting. The sole distinction is that, in contrast to collateral renting, the renter never receives the original NFT in this case. Instead, a wrapped NFT is created for the renter that has all the same features as the original asset, backed by the original assets.


The NFT space is expanding quickly, and with concepts like Rent-to-earn, more and more people are encouraged to enter the space without having to spend loads of money for buying an NFT. Although there are only a few rental marketplaces currently, the potential is ever thriving.

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