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Wallet enables NFT owners to retain ownership while transferring assets for loan or rental purposes
The NFT lending protocol NFTfi and digital asset manager Safe, formerly Gnosis Safe, partnered to develop a new product for non-fungible token owners intended to provide added value to digital assets.
Usually, an NFT owner’s rights — to display an NFT, access token-gated content, sign transactions with it or receive an airdrop, for example — are tied to the blockchain address associated with the wallet holding the NFT.
When that digital asset is transferred out of that wallet, such as in the case of an NFT-collateralized loan or NFT rental, the holder may essentially be giving up physical ownership.
The challenge is to improve NFT rights efficiency. The solution proposed by NFTfi and Safe is an NFT Rights Management Wallet to allow Safe Ethereum wallet users to segregate and delegate certain rights and permissions associated with an NFT to other Ethereum addresses.
As part of the partnership, Safe announced an investment of an undisclosed amount in NFTfi, which will become part of the Safe product suite. Gnosis Safe recently rebranded to Safe following a community vote to spin-off and a $100 million injection of capital led by 1kx crypto fund.
Web3 development studio BootNode led the technical implementation of the open-source NFT Rights Management Wallet product.
Stephen Young, CEO of NFTfi, told Blockworks that the Rights Management Wallet is not use case specific, and that the long-term vision is to “usher in a new era of utility” and “unlock tremendous value for the entire NFT space.”
The immediate benefit for NFTfi, according to Young, is that it makes loans more convenient and cheap. If an NFT is used as collateral in a secured NFT loan, it is moved to an escrow third party wallet for the duration of the loan.
Programmable NFT assets plus rights management technology, on the other hand, would permit the NFT owner to delegate transfer rights to NFTfi, instead of transferring the asset for the loan period, while still retaining full NFT ownership.
As NFT financial products such as loans, liquidity tools and derivatives become more robust, NFTfi aspires to become the leading settlement layer for NFT financial transactions, added Young.
“It pursues a platform strategy in which external developers and teams can build agreement types, such as rentals or options, and use NFTfi’s existing distribution and liquidity to build profitable services on top” Young said.
Lukas Schor, the co-Founder of Safe, confirmed that the investment in NFTfi was not financed through the recent funding round because it occurred before the official spin-off from Gnosis and before the funding round was concluded.
When asked why Safe is focusing on NFT rights management, Schor said that Safe has already “gained significant traction with big treasuries” and that NFTs are an “important driver for retail users to adopt more secure self-custody setups.”
“With NFTs we think the awareness of retail to seek out more robust options is much higher. Besides the monetary value, NFTs also have emotional, sentimental and cultural value which make them irreplaceable in case they’d get lost,” Schor added.
In a statement shared with Blockworks, Manu Garcia, the CEO and co-founder of BootNode said that the project will enable rights efficiency, “which is to NFTs what capital efficiency is to DeFi.”
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DATE
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