Implementing Smart Contracts: The case of NFT-rental with pay-per-like
This addresses risks and costs in NFT lending for owners and renters, but it is incremental as it applies existing blockchain technology to a new use case.
The paper tackles the challenges of NFT rental by introducing a pay-per-like pricing model using Ethereum smart contracts, finding advantages but also issues like high fees and unfairness to niche artists.
Non-fungible tokens(NFTs) are on the rise. They can represent artworks exhibited for marketing purposes on webpages of companies or online stores -- analogously to physical artworks. Lending of NFTs is an attractive form of passive income for owners but comes with risks (e.g., items are not returned) and costs for escrow agents. Similarly, renters have difficulties in anticipating the impact of artworks, e.g., how spectators of NFTs perceive them. To address these challenges, we introduce an NFT rental solution based on a pay-per-like pricing model using blockchain technology, i.e., smart contracts based on the Ethereum chain. We find that blockchain solutions enjoy many advantages also reported for other applications, but interestingly, we also observe dark sides of (large) blockchain fees. Blockchain solutions appear unfair to niche artists and potentially hamper cultural diversity. Furthermore, a trust-cost tradeoff arises to handle fraud caused by manipulation from parties outside the blockchain. All code for the solution is publicly available at: https://github.com/asopi/rental-project