Ethereum is not just the world’s second most valuable cryptocurrency after Bitcoin, it’s also the go-to platform for decentralized apps, NFTs, and many popular crypto projects today. But with Ethereum’s high transaction volume comes steep NFT fees, which create a big barrier for newcomers to this blockchain ecosystem.
This is a tough problem to solve since most blockchains face the same challenge. Attracting more users means more transactions, which means higher fees, and that ultimately limits new users from joining the ecosystem.
But PARSIQ, a new blockchain platform, is offering a smart solution to this problem. Their approach significantly lowers NFT transaction fees while keeping apps attractive and functional. Beyond that, PARSIQ’s solution could open a whole new door for the NFT economy.
The “chicken or egg” dilemma in the NFT economy
Essentially, PARSIQ connects activities across multiple blockchains to unify apps, devices, legacy systems, and off-chain networks into one manageable system.
Taking it further, PARSIQ developed the IQ Protocol for NFT rentals. This lets blockchain projects build trustworthy NFT rental marketplaces without risks of loss or collateral requirements. IQ Protocol tackles a major crypto headache called “Token Not Needed”, the classic chicken-or-egg problem when raising funds for new crypto projects.
Even with great ideas, a crypto project needs wide promotion to succeed in fundraising. But to promote widely, it needs initial capital. This catch-22 traps many new crypto projects trying to launch.
And even if they raise funds, the problem isn’t over. Without practical use cases, like places accepting their tokens for payment, demand for those tokens drops. Many crypto projects still exist but their token prices crash and rarely recover.
The same issue applies to the NFT economy.
Developing play-to-earn games is costly because publishers must create their own NFTs. But gamers hesitate to join if the game isn’t popular, fearing their NFTs will lose value and trap their investment. This makes it harder for developers to attract players, risking the project’s failure even if the gameplay is great.
How PARSIQ’s IQ Protocol solves this
This is the “Token Not Needed” or chicken-and-egg problem in the NFT world. PARSIQ’s IQ Protocol could be the perfect fix by opening up NFT rentals.
IQ Protocol is an open-source, customizable protocol that lets borrowers rent NFTs without collateral. All rentals have a time limit, so lenders always get their NFTs back, eliminating risks of borrower default.
How does it work? Instead of handing over the original NFT, IQ Protocol creates a time-limited copy of the NFT for the renter. This guarantees the original NFT always returns to the lender. This makes NFT rentals risk-free and ensures rental fees are collected. Plus, smart contracts automatically enforce rental terms, preventing borrower default.
This allows play-to-earn game developers and crypto projects with weaker tokens to build a circular economy by lowering NFT development costs and reducing transaction fees, since the risk of losing NFTs is removed.
Gamers also benefit. For example, if a player owns a rare weapon but won’t use it over the weekend due to a trip, they can rent it out for a set time without worrying about losing it.
This simple example shows the huge potential of IQ Protocol and PARSIQ’s future. This model can help projects and NFT holders unlock a rental market never seen before, letting renters experience assets they don’t own.
Cryptocurrency information, often called “virtual money,” is not legally recognized in Vietnam. This article is for reference only and does not constitute investment advice.
GameFi (short for Game + Finance) refers to blockchain games that incorporate financial elements. This article is for reference only and does not constitute investment advice.
Source: hackernoon
