Thread by @thirdweb_

Last week a new smart contract standard was approved which will unlock a powerful new use case for NFTs.

Here's everything you need to know about rentable NFTs and ERC-4907:

• What the contract does
• What you can build with it
• How you can build with it

Let's dive in. 🧵

Many NFTs have utility.

They can be used in video games or other digital experiences to change or improve the experience.

For example a 'Sword NFT' can be equipped which inflicts more damage and improves the performance of the player.

People often want to access the utility of certain NFTs without making the commitment to purchase them.

'Renting' NFTs lets people pay a fraction of the price to hold the NFT in their wallet temporarily, using the NFT to unlock utility or digitial experiences.

There are existing projects which enable this functionality:

They work by assigning two different roles to holders of the NFT: An 'owner' and a 'user.'

Owner: Owns the NFT, can sell or transfer to another wallet.

User: Holds the NFT in their wallet, cannot sell or transfer.

The role of 'user' is assigned temporarily to the wallet renting the NFT.

This means the owner needs to submit two on-chain transactions, one to list a new address as the new user role at the start of the duration and one to reclaim the user role at the end.

Requiring two transactions is inefficient in both time and gas.

ERC-4907 solves this:

The ERC-4907 smart contract standard introduces an “expires” function which facilitates the automatic end of a usage term without the need of a second transaction.

This greatly reduces the integration cost of utility NFT rentals.

The ERC-4907 standard is an extension of the ERC-721 standard, which means it is backwards compatible with any ERC-721 contract.

This means any existing ERC-721 smart contract can implement the renting feature via a contract extension.

ERC-4907 unlocks some interesting potential applications:

• Video game NFT rentals
• Temporary membership of a token gated club
• Temporary usage of token gated software
• NFTs as collatoral for loans.
• NFTs which represent real world rentable assets, (ie. vacation home.)

There are already some incredibly useful resources which teach you how to build an application with ERC-4907

This guide from @dhaiwat10 will show you how to build a rentable NFT collection and deploy it to Optimism. (or any other blockchain)

ankr.hashnode.dev/build-and-depl…

@dhaiwat10 You can also read the full EIP proposal from the @DoubleProtocol team for deeper context on the new standard:

github.com/ethereum/EIPs/…