nftrentals.btc

A smart contract that provides a way for NFT owners to rent out their NFTs to others. No trust is required between the owner and renter and no collateral is required from the renter.

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Inspiration

As more and more use cases of NFTs are imagined and built by web 3 developers, owning an NFT temporarily for some set period of time seems like it will be useful in many different scenarios. That super weapon that you can't afford to buy in your favorite game... maybe you could rent it for an hour so that you can defeat that big boss. That new smartlock you got for your scooter... maybe you could rent it out, trustlessly, by connecting it to a smart contract. There are so many potential uses for NFT rentals in the future, many that we can't even imagine yet.

What it does

This project defines a smart contract to provide a way for NFT owners to rent out their NFTs to others. There are many different scenarios in which this could be useful, including NFTs used in online games, NFTs providing access to a physical item (e.g. using NFT to unlock a property), or NFTs with any other functionality which provides access to some benefit to the holder of the NFT.

I have seen projects on other blockchains which enable renting by actually transferring the original NFT to the renter, and requiring collateral from the renter that covers more than the full value of the NFT. This is bad for the owner of the NFT - because of the risk that the NFT will go up in value while rented and the renter will decide to keep it and sacrifice their collateral. It is also bad for the renter of the NFT - because they need to put up a significant amount of collateral, just to rent an NFT for some potentially short amount of time.

This smart contract solves that problem by creating an intermediate holder of the NFT, the contract itself, while it is rented out. This enables the renter to only pay an amount that is reasonable for the rental period, with no collateral required. It also removes the risk to the owner of the NFT. There is zero chance that a renter can just never return the NFT, since the contract holds the NFT and never transfers it to the renter. When the rental contract term is up, the rental NFT can be burned, and the original NFT is available to be returned to the owner, no matter what the renter does.

The downside of this is that since the contract holds the original NFT and mints a rental NFT for the renter, the end users of the NFT will need to support the rented NFT. It should be possible to standardize this rental relationship and handle it generically. The key to making it work is that it is easy to verify that the rental contract owns the NFT that is being rented.

Smart Contract Details

offer-nft

Offer an NFT for rent in the marketplace.

Parameters:

  • collection: Principal specifying the NFT collection
  • nft-id: ID of the NFT within the collection
  • end-height: Block height at which the NFT will no longer be available to rent
  • price: Price to rent the NFT for the specified length of time
  • rental-length: Number of blocks for one rental period

delist-nft

Delist an NFT from the marketplace.

Parameters:

  • collection: Principal specifying the NFT collection
  • nft-id: ID of the NFT within the collection

rent-nft

Rent an NFT.

Parameters:

  • collection: Principal specifying the NFT collection
  • nft-id: ID of the NFT within the collection
  • price: Price offered for one rental period

return-nft

Return a rented NFT. Note that this can be called by anyone, not just the renter or owner. This allows for a new renter to force the last renter whose term has expired to return the item so that it may be rented again. What actually happens is that the rental NFT is burned by the contract and it is removed from the internal map of rented items.

Parameters:

  • collection: Principal specifying the NFT collection
  • nft-id: ID of the NFT within the collection

nftrentals NFT

The NFT rental contract defines a new NFT, nftrentals, which is used to define a rental. This NFT is minted each time a rental is initiated. It is held by the renter for the duration of the rental period, and then is burned by someone "returning" the rented NFT. This return may be performed by the renter (though there is currently no incentive for them to do so), by the owner (incentivized to return the item so that it may be rented again), or by another user (incentivized to return the item so that they may rent it themselves).

Nothing prevents a renter from "sub-leasing" a rented NFT if they think that the rental price is lower than the current market price for the item, and this could be a common occurence which would help to stabilize the price of rentals.

Frontend

For this hackathon, I was unable to complete any frontend for this smart contract, but the intention was to put a simple page up and have nftrentals.btc.us redirect to it. There would be a marketplace of NFTs available for rent, showing the rental length and the price. Users could click a button to rent an NFT, which would prompt them to approve the transaction to pay the rental fee and mint the rental NFT. The NFTs available for rent should be searchable and also organized into collections, similar to the way that StacksArt or STXNFT are organized for NFT sales.

When a user has their wallet connected, they would be able to enter a view which shows all of their NFTs, and showing a button to offer each NFT as a rental, prompting for the rental length and price. Any existing rentals would show the current status (rented or not rented), block height ending the current rental (if applicable), a button to delist the item, and another button to show historic data on an NFT (how many rentals, how much in fees, cycles rented vs. unrented, etc.).

Since a call to the smart contract is required to "return" a rented NFT, there will need to be a button to return a rental which has expired. As described above, this burns the rental NFT and clears the data from the map of rented items. To ensure that this happens in a timely fashion, to avoid giving the renter bonus time, the marketplace could offer a paid service to automate calling this return-nft function.

How I built it

I focused on designing and testing the smart contract. The repository contains a full set of unit tests for the contract and tries to catch all potential errors.

Challenges I ran into

The biggest challenge for this project was iterating over the smart contract functions to ensure that owners and renters would be protected from any wrong-doing. There are many scenarios to cover in any smart contract with more than the minimal functionality, and it is important to get it right on the first try.

Accomplishments that I'm proud of

I am proud of the simplicity of the code. It is clean, concise, and easy to understand.

What I learned

I learned many lessons about how to use clarity effectively. I studied the book, documentation, and other published contracts to get a feel for best-practices and tried to implement them into this work. I started the work to learn how to integrate the smart contract into a web frontend, and intend to continue that investigation when time permits.

What's next for nftrentals.btc

I recently began working at Hiro, with a focus on improving the Clarity developer tools. I plan to use this project as a way of "dog-fooding" the tools -- giving me a real world experience to understand what are the pain points, what features are missing, and what could use some more polishing. I will cover both the smart contract development as well as the frontend integration. Eventually, nftrentals.btc will be up and running.

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