Unlocking the Value of Temporary Ownership: Exploring NFT Rentals on Sui

Authors: Georgios Sextos (Twitter, Linkedin), Andreas Xydas (Twitter, Linkedin)

Imagine you have a rare digital item, like a powerful sword in a video game or a ticket to a VIP virtual event. But what if you don’t need it all the time? Instead of just holding onto it, you could let someone else use it for a while—and that’s exactly what NFT renting allows you to do.

NFT renting introduces the idea of temporary ownership. Instead of buying an NFT (Non-Fungible Token) outright, you can rent it for a set period, enjoying all the perks of ownership during that time. From special in-game items to exclusive digital art, this system lets you access premium content in a flexible, cost-effective way. Meanwhile, creators and owners can earn extra revenue by renting out their assets.

Let’s break it down:

How NFT Renting Works

• Lender lists the item: If you own an NFT, you can offer it for rent. This could be anything from a digital artwork to a rare gaming item.
• Borrower rents the item: Someone who needs that item for a short time can rent it, paying a fee for the rental period.
• Access control: The borrower might only be able to look at it (read-only), or they could use it fully (like equipping that game sword in a battle).
• Return the item: Once the rental period is over, the item automatically returns to the lender. The owner can then rent it again, sell it, or just keep it.

Why Rent NFTs?

Renting NFTs brings a new layer of flexibility to the digital world, benefiting both owners and renters. It’s similar to borrowing a book from the library instead of purchasing it, offering a cost-effective way to access premium content.

For renters, this means gaining affordable access to high-value digital assets. You can enjoy perks like a special in-game skin or a VIP event pass without the need for a long-term investment. It allows you to experience ownership temporarily, but without the ongoing responsibility of permanently holding the asset. For owners, NFT rentals offer a way to earn passive income by monetizing assets that would otherwise sit unused. Instead of selling, you can rent your NFTs out, maximizing their value while retaining ownership. In real-world applications, NFT rentals are transforming several industries by introducing new opportunities for both users and asset holders.

Gaming

In gaming, for instance, players can rent rare in-game items such as weapons, skins, or characters. These items may offer strategic advantages or aesthetic customization but might be expensive or difficult to obtain through traditional means. Renting them allows players to temporarily enhance their experience during specific events or challenges without committing to a long-term investment. Once the rental period expires, the item returns to the original owner, who can continue to generate income by renting it to other players.

Events

In the event industry, NFT rentals are changing the way people experience entertainment. Imagine you hold an NFT ticket to a highly anticipated virtual concert or conference, but you can’t attend. Instead of letting the opportunity go to waste, you can rent the NFT to someone else. This not only helps you earn passive income but also ensures that the event has a full audience, maximizing engagement for organizers and participants. As events increasingly move into the digital and hybrid space, NFT ticket rentals could become a standard practice, giving people more flexibility in managing their schedules while creating new revenue streams for ticket holders.

Metaverse

The concept of renting NFTs is also revolutionizing virtual real estate within the metaverse. Virtual worlds allow users to own land, which can be developed into spaces for businesses, events, or social gatherings. For those who want to temporarily use prime locations for a specific event or a pop-up shop but cannot afford to purchase land, renting offers a practical solution. Virtual landowners can monetize their property by leasing it for short-term use, such as hosting conferences, art galleries, or virtual parties, without relinquishing ownership. This creates a dynamic digital economy where the value of virtual real estate continues to grow through rentals.

Subscriptions

Another growing use case is in digital subscriptions and exclusive content access. By renting NFTs that represent access to premium services, such as virtual fashion, in-game bonuses, or exclusive membership to online clubs, users can enjoy short-term access to content they may want to try out without committing to long-term ownership. For example, a user might rent an NFT that unlocks premium features within an app for a limited time or a rare virtual outfit to wear during a specific event. This type of rental system allows creators and companies to monetize their content multiple times while offering consumers flexibility in how they engage with digital services.

As the NFT space evolves, the potential for rentals to expand into more industries grows. Whether it's for entertainment, business, education, or social experiences, NFT rentals open up a world of possibilities, enabling more fluid and accessible participation in the digital economy.

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New Ways for Creators to Monetize

For content creators, NFT rentals open up exciting possibilities. Instead of just selling NFTs once, creators can now:

• Earn recurring revenue: Rent out the same NFT multiple times, collecting fees for each rental.
• Explore new pricing models: Creators can offer both short-term rentals and long-term ownership, allowing them to reach different types of consumers.
• Earn royalties: With smart contracts, creators can earn a portion of each rental transaction, ensuring they continue to benefit from their work.

The Tech Behind NFT Rentals on Sui

NFT rentals are made possible through move smart contracts—self-executing code that lives on the blockchain. This ensures that everything is automated and transparent:

• Secure rentals: The rental process is handled by a smart contract, which manages everything from rental payments to the automatic return of the asset after the rental period.
• Protected ownership: Even while someone else is using the NFT, the original owner still retains full ownership rights. The asset is only temporarily "borrowed" and returned without issues.

Blockchain Makes it Transparent and Safe

One of the best parts about renting NFTs is that the blockchain ensures everything is transparent and secure. Every transaction—whether it’s listing, renting, or returning an item—is recorded on the blockchain. This means that users can trust the process, knowing there’s no risk of tampering or fraud.

The Future of Temporary Ownership

NFT rentals are transforming the way we think about digital ownership. They bring flexibility and new opportunities to both consumers and creators. For users, it’s a chance to access high-end content without the long-term commitment. For creators, it opens up new streams of revenue and allows for more innovative ways to share their work.

In a world where digital assets are becoming more important every day, NFT rentals represent the next step in democratizing access to exclusive content while empowering creators to make the most of their creations. Whether you're a gamer, artist, or just a tech enthusiast, this is a trend that’s here to stay.

Smart Contract Design for NFT Rentals on SUI

The rental smart contract is built on the Kiosk Apps standard, which governs the infrastructure for rental transactions. Both the lender and the borrower must install a Kiosk extension to participate. Additionally, the creator of the NFT (or the type of asset being rented) must establish a rental policy and a Protected Transfer Policy (ProtectedTP) object. This ProtectedTP facilitates the rental process while ensuring that creator royalties are properly enforced throughout. Implementation charges rental fees on a daily basis by default. However, the underlying logic can easily be adapted to support rental fees based on hours or even seconds, offering flexibility depending on the use case.

What is a Sui Kiosk?

Imagine a "Kiosk" on Sui like a digital marketplace that anyone can use to sell or trade items. Here’s how it works in a simple way:

1. Kiosk Objects: Think of these as digital store shelves. Each seller (like you or me) owns their own shelf where they can display their items (like game assets, NFTs, etc.) for sale or rent. You still own your items until someone buys or rent them.
2. Custom Rules: Sellers can set their own rules for each trade. For example, a rule might be that every time an item is sold, the original creator gets a small fee (a royalty), or something else happens, like triggering a special event.
3. Marketplaces: These are platforms that can track everything happening on the kiosks—what’s for sale, what’s been sold, what’s been rented etc. They get updates directly from the kiosks themselves, like getting notifications when a new item is listed or sold.
4. Built for Sui: The Kiosk system is native to the Sui blockchain, meaning it's built right into the system and available for everyone to use without needing to install anything extra.

So, the Kiosk lets you keep control over your assets, allows for custom trading rules, and ensures transparency through a system that marketplaces can easily track.

Move Modules for NFT Rental

The NFT Rental example is powered by a single Move module, nft_rental.move. The full source code for this module can be found in the Sui repository under the examples directory here. The source code includes detailed comments that explain the functionality and structure, making it easier to follow and customize for specific needs.

Key Functions in nft_rental

The nft_rental module provides a comprehensive API that supports the following operations for renting NFTs:

• List for renting: Allows the NFT owner to list their asset for rental, specifying rental terms.
• Delist from renting: Enables the owner to remove their asset from being available for rental.
• Rent: Facilitates the transaction where the borrower rents the NFT from the owner.
• Borrow by reference: Provides a way to lend the NFT while maintaining ownership and only allowing read access.
• Borrow by value: Allows the borrower to use the NFT with mutable access during the rental period.
• Reclaim for the lender: Enables the owner to reclaim the NFT once the rental period ends, restoring full control over the asset.

This smart contract architecture, built on Move, provides a robust and flexible foundation for managing NFT rentals while ensuring that creator royalties are respected and that assets are securely managed during the rental process.

More Resources for deploying your own contract:

• Sui NFT Rental Guide
• Sui NFT Rental Source Code
• Kiosk Standard
• nft_rental.move
• Sui Kiosk

Why This is an Improvement Over ERC-4907

While ERC-4907 (Ethereum's rental standard) laid the groundwork for NFT rentals, the NFT rental model on Sui, particularly using the Kiosk Apps standard, offers several advantages that improve on ERC-4907. Some of them:

• Faster and Cheaper Transactions: Sui’s high throughput and low-cost transaction model make rentals more efficient and affordable compared to Ethereum, where gas fees can be prohibitively high, especially during network congestion.
• Enhanced Flexibility: The Sui NFT rental framework is more flexible, allowing for custom rental durations, including per-hour or even per-second rentals. This level of granularity isn't as easily implemented in ERC-4907.
• Royalties and Transfer Policy Integration: Sui’s system includes built-in support for royalty enforcement through the ProtectedTP (Protected Transfer Policy) object. This ensures that creators always earn a share from rentals, providing better long-term revenue streams, while ERC-4907 primarily focuses on access control without as much emphasis on royalties.
• Improved Access Control: Sui’s Kiosk Apps standard provides more granular control over NFT access, including options for read-only or full-use permissions, making it easier for lenders to manage their assets securely and for borrowers to have clearer usage rights.

"Here’s a little secret you might not know!"

On most blockchains, when you buy an NFT, you're often just buying a reference or a link to where the actual asset (such as an image, file, or data) is stored elsewhere, typically off-chain. If that link becomes unavailable or the server goes down, access to your asset could be lost.

On Sui, it’s different. When you own an NFT, you directly own the asset itself on the blockchain, not just a link to it. This ensures the NFT stays secure and fully under your control, without relying on external servers or third parties, making ownership more direct and reliable.

In summary, Sui's approach expands on the principles of ERC-4907, offering greater flexibility, improved cost efficiency, and stronger support for creators through enforced royalties. This combination makes Sui a more compelling choice for developers and users seeking a seamless, cost-effective, true ownership solution for NFT rentals.

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