Key Takeaways
- Majority of users in the Web3 gaming space come from several top games.
- 7% of Games have adopted NFT Rental and 18% plan to adopt it among the Top 100 Games.
- The Main Reason for Gamers to Use Rentals is to Reduce Costs, Either by Using or Combining NFTs to Increase the Winning Chance in NFT Games.
- The barriers for game developers to adopt their own rental marketplace include Technical Obstacles, Lack of Priority or Unintuitive.
The mission of web3 gaming is to enable you to truly be able to own and sell in-game assets frictionlessly, but it doesn’t stop there. As digital assets become more like real-world assets, you will be able to do all sorts of other financial transactions on them, starting with renting.
In this article, we explore the questions:
1) How many games have already adopted, want to adopt, or plan to adopt NFT rentals as a feature?
2) What is the rationale behind making these game assets rentable?
3) What are the barriers for game developers to adopt their own rental marketplace?
Majority of Users come from Several Top Games
Our data set of choice is metadata.io’s ranking of games with the highest 30-day daily average of unique active users, taken on 12–06–2022. Before taking a look at the rental numbers in these games, we should look at the attributes of these games.
From these data points, it’s clear that, when it comes to users, its winner takes all for GameFi projects, with the users of the top three games making up more than half of the total user pool. By looking at the discrepancy between the median and the mean, we can see that the majority of users come from a small percentage of top games.
Blockchain Representation
For ecosystem representation, there doesn’t seem to be any dominance by any player, but WAX, BNB, Polygon and ETH seem to be the leading GameFi chains in the pool.
7% of Games Have Adopted NFT Rental and 18% Plan to Adopt It Among the Top 100 Games.
We then investigated whether the games in the data set have a rental feature for their NFTs and, if they do not, whether they have plans to implement one, documented in their roadmap, whitepaper, etc. They can therefore be separated into three categories:
1. Have their own rental market/feature: 7
2. Has not implemented NFT rentals but has expressed public interest or commitment in doing so in the future: 18
3. Has not implemented NFT rentals and has not expressed public interest or commitment in doing so: 75
While games with rental appear to be in the minority, we also looked at the share of players each of these categories has amassed. The games with rental also have a disproportionately large share of the player base (20.4%), relative to how many of them exist.
One possible explanation is that rental may make the in-game asset NFTs more accessible to newer players who are otherwise unwilling to buy one outright in order to play the game. Another one is that once the player base of the game reaches a certain level, the developers become more motivated or enabled to build a rental market.
The Main Reason for Gamers to Use Rentals is to Reduce Costs, Either by Using or Combining NFTs to Increase the Winning Chance in NFT Games.
1. Splinterlands
Overview
Splinterlands is an online collectible card game using blockchain technology. Every card in the game is owned as a tradable NFT. Players can earn income in the game through tournaments, ranked play, and quests. The game’s cards are available to buy and rent through third-party online marketplaces.
The Advantages of Renting over Buying/Trading in the Game
- Daily quests have requirements to play different factions (Water, Fire, Earth, etc), Rather than having to own enough cards to play each faction, players have the option to rent cards to complete the quests.
- Brawl Rentals — The brawl (guild fighting ) feature can have certain restrictions for their fights that require niche cards that the player could be less inclined to purchase. In order to participate in these events.
- Experimentation — Players have the opportunity to try out new builds and combos with cards they don’t own before committing to a purchase.
References (1,2)
https://docs.splinterlands.com/cards/rentals-and-delegations
https://support.splinterlands.com/hc/en-us/articles/5574634792468-How-to-Rent-Cards-
2. DeFi Kingdoms
Overview
DeFi Kingdoms (DFK) is a browser-based pixel art game that integrates DeFi functionality with game elements, built on the Harmony Network. Its DEX uses the Uniswap V2 Protocol that enables users to swap tokens and provide liquidity to earn fees.
The Advantages of Renting over Buying/Trading in the Game
- Summoning: Two heroes are required for summoning a hero. Players can own them but are also able to rent them in order to summon a new hero.
- Reduce the cost of summoning a new hero: The cost of summoning is linked to the generation. For this reason, if you have heroes of higher generations, you can always use one of your heroes, rent a hero with a lower generation and reduce the summoning cost. On many occasions, even if you pay an amount of JEWEL to the owner of the hero you rent, it is more economical to rent a hero of lower generations than to use a hero with a high generation, for example, a hero of generation 5.
- Maximize the odds of getting a good hero: Players can rent a premium hero that, used with yours, can give you a better chance to get a higher quality one.
3. MOBOX: NFT Farmer
Overview
MOBOX: NFT farmer arrived on the BNB chain at the start of April 2021. It described itself as a unique infrastructure that builds on the thriving DeFi ecosystem and combines it with gaming through NFTs. Using liquidity pools, yield farming, and NFTs, the GameFi infrastructure finds the best yield strategies for users and also generates unique NFTs that can be used across multiple games. This gives MOBOX users the ability to play for free and earn in a single process.
Moreover, MOBOX is a game DApp where players can stake liquidity provider (LP) tokens or stablecoins to obtain rewards in the form of yield farming tokens called KEYs. KEYs can later be used to unlock NFTs and, thus, be used as playing characters or staking assets in the MOBOX platform. MOBOX is the true representative of the GameFi movement. NFTs play an essential role in this ecosystem, as users need the MoMo NFTs to become active in the MOBOX ecosystem.
The Advantages of Renting over Buying/Trading in the Game
- Players can get gold coins by putting MOMOs in the MOMO library. Ordinary quality MOMOs generate low yield, while rare quality MOMOs’ gold coin collecting speed is generally above 100/min. If there is a shortage of gold coins, then renting a MOMO is considered the fastest and most stable method.
- Players can participate in the plunder feature, similar to Clash of Clans. Rented MOMOs generally have relatively high stats. If a player is a novice and wants to win plunder steadily, renting MOMO is a great option.
4. Thetan Arena
Overview
Thetan Arena was launched in December 2021 by Wolffun, a leading Vietnamese gaming company. It has received investment from VCs such as Animoca Brands and is backed by the gaming guild YGG. It is one of the largest MOBA games on BSC (multiplayer online battle arena), which combines the Free-to-Play and Play-to-Earn models. Thetan Arena has two types of tokens, Thetan Coin (THC) and The Gem (THG). Players earn THC or THG by participating in battles or completing other tasks.
The Advantages of Renting over Buying/Trading in the Game
(1) Gaining gTHC through daily battles trophies
(2) Earning Power Points to upgrade your NFTs
(3) Chance to join upcoming special events
Reference (1)
5. Aavegotchi
Overview
Aavegotchi is a DeFi-enabled crypto collectibles game developed by Singapore-based Pixelcraft Studios that allows players to stake Non-fungible tokens (NFTs) avatars with interest-generating tokens and interact with the Aavegotchi metaverse. It is a unique combination of Decentralized Finance (DeFi) and NFTs.
Aavegotchis are pixelated ghosts living on the Ethereum blockchain, backed by the ERC-721 standard. Their value is determined by rarity level, which is calculated via multiple factors, such as base traits, amount of staked collateral/aTokens, and equipped wearables.
To level up their Aavegotchis, players can participate in a variety of activities including mini-games, governance, and meetups. Aavegotchis can also increase their rarity level by equipping in-game wearables and leveling up.
The Advantages of Renting over Buying/Trading in the Game
(1) Players can collect tokens in the game to mint golden altars. Players without ghost NFTs can find them from the rental market to enter the game.
(2) Buying an Aavegotchi usually costs around 400 GHST, while renting it costs only a small amount, less than 1 GHST.
Aavegotchi trade and rental data
Reference (1)
6. DracooMaster
Overview
Dracoo Master is a strategic roguelike deck-building game on BSC. Dracoo’s card arrangement achieves the limitless possibilities of real-time multiplayer online competitive games in players’ adventure to the Sacred Peak. There are BAS, the function token, and DRA, the governance currency, in Dracoo Master. Players can breed Dracoos and build summoner equipment with BAS tokens. Dracoo Master is a new game where players collect DRA tokens through adventures and battles in the game. Meanwhile, players could collect and evolve different kinds of Dracoos to earn DRA tokens through battle. Dracoo NFT could be traded on the NFT market.
The Advantages of Renting over Buying/Trading in the Game
(1) For users who are not blockchain players, they can rent Dracoo NFTs to play the game by using fiat currency at the in-app purchase.
(2) Renting NFTs with fiat currency not only lowers the threshold for playing blockchain games but also is a more economical way for users who can’t afford to buy NFTs in certain regions.
7. Pegaxy
Overview
Pegaxy is a play-to-earn PVP-style horse racing game where players compete for top 3 placement against 14 other racers. Each race has randomized elemental variables which include wind, water, fire, speed and more. Using strategic upgrades, food and skill, players must place in the top 3 to earn the platform’s utility token, VIS (Vigorus). Within the game, players are able to breed, merge, rent, sell, and race their Pega to earn VIS tokens. This system enables teams to build large guilds and scholarship programs or even provides solo players the opportunity to earn in-game tokens through daily racing.
The Advantages of Renting over Buying/Trading in the Game
(1) There are three types of renting inside the Pegaxy game, which is Fixed Renting, Profit Share and Direct Rental. In the Fixed Renting scenario, once the renter has accepted the agreement and the Pega is inside the escrow wallet, the owner will receive a fixed amount of PGX from the escrow account, however, will not be able to redeem their Pega for a fixed amount of time, guaranteeing the renters Pega for the fixed rental period. The Profit Share model incentivizes hard-working scholars/renters while reducing the workload on managers/owners. For a lower fee than the Fixed Renting option, scholars/renters can access the NFTs but share some of the profit with the managers/owners. The Direct Rental system is specifically designed for guilds, allowing a manager to create a rental contract which they then send directly to the Scholar for them to accept. Enabling large-scale rental programs and guild growth through the in-game economic model creates widespread opportunities for those wanting to access the game for free.
Reference (1)
What are the barriers for game developers to adopt their own rental marketplace?
While it’s clear that enabling your players to be able to rent NFTs in order to play your game instead of having them buy it, it’s clear from our observations that games that have this feature are still in the minority. Here are several possible explanations for why there aren’t more games that don’t implement their own rental market yet:
Technical Obstacles
NFTs that are based on the ERC-721 and ERC-1155 token standards are not typically rentable out of the box, they can only be transferred. While it’s possible to make them rentable without collateral, doing so can be tricky and development time intensive. For this reason, we’ve published new token standards ERC-4907 and ERC-5006, which are extensions to ERC-721 and ERC-1155 respectively, that simplify the process. If you are building a game, please feel free to check it out.
Lack of Priority
Virtually all of the games that use NFTs are relatively new projects with features that are coming out every month. With it, there are a million different tasks to be done: new gameplay, maintenance of servers, fixing bugs, etc. For some games, there are other priorities that the developers must handle before implementing something like a rental marketplace, especially when the benefits are not completely understood.
Unintuitive
The narrative for the role of NFTs and crypto in gaming is that “it enables true ownership of game assets”. With renting, there, of course, is no exchange in ownership and, so, for mainstream gamers and developers, while NFT- and blockchain-based ownership may be a leap from what is accustomed to, NFT-based renting is another one built on top of that. This can affect adoption.
Concluding Thoughts
Games that adopt rental typically have more user engagement and command a disproportionate share of the active users in our data set.
Because renting makes NFTs more accessible and affordable to new users who are not yet willing to commit significant amounts of money to a game’s digital assets before purchasing it.
Experienced users have the option to rent specific niches or power pieces for events. It could also be because renting also encourages experimentation by allowing players to try out certain combos and builds before committing to purchasing them.
In any case, we expect NFT rental adoption to grow steadily alongside NFT-based gaming itself.
Disclaimers
The contents of this report were co-created by Double Protocol and Winkrypto. The data source is provided by mymetadata.io.
Double is an NFT rental marketplace for Web3 gaming and metaverse assets. Double is also the team behind ERC-4907. As of now, Double has partnered with more than 100 games.
Winkrypto is the 1st crypto post-investment services agency in the APAC region. It focuses on branding and growth in the crypto space and has worked with hundreds of projects globally.
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