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An emerging Web3 trend can thoroughly disrupt the digital goods economy: virtual renting.
This development has the potential to drastically change the current metaverse and Web3 landscapes
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NFT rentals: Digital good rentals are the next evolution on Web3, says Jake Stott, CEO of Hype.
Earlier this week, streaming colossus Netflix entered the metaverse with its latest film release The Gray Man, starring Ryan Gosling and Chris Evans.
To promote the new title, the streamer worked with Decentraland to recreate a scene from the movie in its metaverse — an engaging experience the company calls a “metaverse mission.” In the experience, users can virtually play out a scene from The Gray Man and receive rewards like free wearables for their avatars for completing it.
More interestingly, though, Netflix tapped into an emerging Web3 trend that can thoroughly disrupt the digital goods economy: virtual renting.
Usually, brands would have to own virtual land to stage experiences in blockchain-based metaverses like Decentraland and The Sandbox. Gucci and Adidas, for instance, snapped up land in The Sandbox metaverse earlier this year to roll out virtual experiences for their NFT campaigns.
Unlike the two fashion giants, Netflix decided to build The Gray Man experience on land it temporarily rented from Decentraland. The move makes it easy for the brand to experiment with a new trend without the extra costs of purchasing virtual parcels of land.
While Web3 is all about ownership, renting can have massive implications for how brands and users experience and interact with the metaverse — especially if the trend takes off.
For now, it’s impossible to rent Ethereum-based assets without putting all your trust in third parties. But thanks to an upcoming Ethereum Token Standard — ERC-4907 — this could all soon change.
If the new standard gets approved, it’ll make it possible to build smart contracts that enable temporary lending out of blockchain-based assets like NFTs, without giving up ownership of those assets.
This means that anyone could soon be able to lend out and rent NFTs like land, wearables, and PFPs without the 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 readiness to experiment with virtual renting for launch activations and campaigns is a testament to the technology’s promise.
A recent survey by VICE found that 57% of Gen Z felt it’s easier to express themselves in the metaverse. A large part of that self-expression was through indulging in real brands virtually. In addition to that, those surveyed indicated that 15% of their fun budget was allocated to digital goods and the metaverse.
These insights point to a massive opportunity for brands to boost brand recognition and engagement with digital goods. Virtual renting can play a central role in their strategies.
Data shows that over $37 billion had been spent on NFTs between January and May of 2022. But despite the massive volume, swaths of netizens have yet to acquire their first NFTs. Renting could be an easy introduction to the wonders of NFTs and their various utilities, including PFPs, wearables and tickets.
Instead of straight-up selling digital goods and NFTs (the prices of which can often be quite steep, especially for newbies), brands will be able to offer the experience of owning such assets through renting. Similar to return policies, this will give consumers the comfort of trying out such digital goods before committing to the purchase.
The key to making Web3 and the metaverse mainstream-friendly is lowering the entry barrier for both 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’re likely to do the same once we start spending more time in the metaverse. Long before you know it, you’ll be attending virtual weddings in a virtually rented tux and a virtually rented car.
Jake Stott is the co-founder and CEO of Web3 Super Agency Hype. When he’s not helping leading blockchain companies and iconic brands supercharge their growth, he likes to ruminate over the future of Web3 and the metaverse.
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