The year of 2021 no doubt will be remembered as the year of NFT in the crypto world, but NFT still has some main challenges towards mass adoption. Currently, the transfer of NFT from one owner to another normally happens at sales which is basically a one-way ownership transfer, this greatly limits the liquidity of NFTs and the utility of NFTs in real life.

What it does

We are building a POND Protocol that enables each owner to grant other users (timedOwner) to own the NFTs for an agreed specific time. It provides the seamless integration for third party app because theownerOf function will return the timedOwner during the grant period.

  1. When transfer happens

    In addition to the current ERC721 transferFrom function, we proposed a new function called timedTransferFrom. When this action is called, the agreement is registered on Chainlink keeper which will trigger the transfer back action when the agreed time is due.

  2. When ownerOf is called during the timedOwnership period

    The ownerOf returns the timedOwner instead of the Owner during the period. We intentionally do this so that third party integration becomes seamless. They can just call ownerOf function (probably is what they are already doing today) on the ERC721. Unlike other solutions on market, with Pond, third parties don't have to do any new integration! They don't have to call new functions or to integrate with new SDK to validate the current owner of the NFT.

  3. Restriction on the timedOwner

    During the temporary ownership, the timedOwner can't do any other operation (approve, burn, transfer.. etc) on the token except the ownerOf returning the timedOwner.

Challenges we ran into

Web 3.0 is about decentralization AND ownership, and NFT is no exception, currently the ownerOf() function under ERC721 for example will only return the current owner of the asset, to transfer the ownership from one to the other generally is permanent. To facilitate a temporary ownership transfer for a minimal cost and to lower the barrier to allow more users to enter this sector, the main challenge is to ensure the safety of the ownership without requiring any collateral. For example, the timedOwner CAN NOT transfer the token to others. The Chainlink Keeper on the other hand fully guarantees the decentralization of our POND protocol.

Future improvement

Currently the timedOwner data registering on Chainlink Keeper is embedded in the ERC721 contract. We do this for Chainlink hackathon as this is the fastest way to show how it works. However, this is probably not perfectly scalable and highly coupled. We are continuously investigating and trying potential ways to improve it.

Accomplishments that we're proud of

We are the first to realize the temporary transfer of NFT ownership from one owner to another user in a truely trustless, non-custodian, and collateral-less manner. The NFT will be returned to the original owner automatically after the timed ownership expires. This will help create numerous use scenarios for NFTs, i.e. an NFT 2.0 era.

What we learned

Building up a smart contract from scratch and at the same time opened the door to utility based NFT app.

What's next for POND

POND hopes to pivot away from the current focus of NFTs to more utility oriented, i.e., NFT 2.0, with the timed ownership NFT, we aim to promote a more inclusive community and help bring more use cases and promote digital sharing economy in Web 3.0.

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