IQ Protocol is an ecosystem and decentralized peer-to-peer marketplace that offers a framework for digital asset rentals in the blockchain gaming space. It aims to empower game studios, developers, and NFT communities to diversify revenue streams and enhance the value of their assets through an on-chain NFT rental economy. The platform is designed to be accessible to both newcomers and veterans in the crypto space, introducing Web3 gaming items, real-world events, and a variety of experiences. ^[1]

Overview

IQ Protocol's ecosystem revolves around several key components, including the foundational IQ Protocol blockchain protocol, the IQ Market rental marketplace web app, the versatile IQ Warper SDK for custom integrations, and the IQ Data Lake, a developer tool for complex on-chain data querying. Noteworthy features of IQ Protocol include a trustless rental system, enabling guilds to share assets securely, and a straightforward integration process. The platform aims to be flexible and customizable, supporting various renting mechanics and listing strategies, with plans to extend support for additional collection standards in the future. IQ Protocol also introduces gasless renting options, in-game reward sharing, and control for asset owners, creating new possibilities for partnerships and collaborations within the evolving Web3 space. ^[2][3]

Core Concepts

Users

Renting with IQ Protocol involves three key parties:

1. Service Provider (IQVerse): Responsible for deciding which NFTs are rentable and determining eligibility for renters. The integration section covers service providers' roles, from model briefs to integration and usage overviews.
2. Asset Owner: The individual or entity seeking to rent out an asset. Guidelines for making an asset rentable, withdrawing an asset, and considering rental rules are covered in the asset owner section.
3. Renter: Refers to individuals interested in renting or who have already rented assets. Renters can find information on how to rent and locate or recall rented assets.

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Warpers

Warpers serve as the "wrapping" around the Original Asset Collection. This involves mimicking the visual behavior of the Original Asset Collection and carrying over its standards. All original assets are stored, and are the Warped Assets that physically transfer between IQ Protocol and renters. Warpers utilize a proxy mechanism, allowing internal calls to the Original Asset Collection's smart contract, simplifying support for external services. ^[5]

IQVerse

In the IQ Protocol, a service provider represented as an IQVerse, each configurable by its owner. IQVerses include parameters like name, rental fees, and a list of supported Original Asset Collections through pre-registered Warpers. This approach enables one listed asset to generate income across multiple IQVerses supporting it for various income streams. ^[6]

Trustless & Riskless Renting

The Metahub contract is used for managing listings, rented Warped Assets, and rental duration with the goal of ensuring trustlessness. Trustless renting is facilitated through seamless communication between the Warper and Metahub, with auto-expiration of rentals. ^[7]

Rental Fees

Rental fees within IQ Protocol comprise three main components:

1. IQ Protocol Fee: Set at the protocol level by the IQ Team.
2. IQVerse Fee: Configured by the Service Provider at the IQVerse level.
3. Lister's Fee: Determined by the asset lister, representing the amount they wish to receive for renting their asset for a specified period.

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Process of Renting NFTs

The IQ Protocol introduces Warpers to address the key challenge of ensuring asset owners' guarantees for the return of their assets. The process involves the original asset owner creating a listing, placing the asset inside a Vault contract, and making it available for rent. When rented, the user receives a Warped Asset, minted by IQ Protocol, and retains ownership until the rental period concludes. ^[9]

To avoid ambiguity, the protocol distinguishes between collections and instances. The Original Collection is a smart contract acting as a collection of digital assets (e.g., ERC721, ERC1155), while the Original Asset is a token of the Original Collection, created by minting. Warpers make Original Assets rentable, and Warped Assets inherit properties of the Original Asset being rented. ^[9]

The rental process involves three stakeholders: the lister, service provider, and IQ Protocol. Fees include the Lister Fee (set by the lister), IQVerse Fee (configured by the IQVerse owner based on the Lister Fee), and IQ Protocol Fee (set by the IQ Protocol). The total fee is presented to renters, and the fees collected are distributed among the stakeholders. ^[9]

Integration of IQ Protocol (by a service owner)

Service providers follow a five-step process, including planning, creating an IQVerse, optional whitelisting, Warper deployment and registration, providing eligibility, and introducing the IQ Market to users. ^[10]

Listing an Original Asset (by an asset owner)

Once a Warper is deployed, an asset owner can list the original asset on the IQ Market UI. Listing involves setting terms and parameters, such as price per time unit, and is executed by sending transactions. If the IQVerse is whitelisted, the owner can list directly; otherwise, they need to access the IQVerse’s page through a provided link. ^[10]

Renting a Warped Asset (by any user)

Renting a Warped Asset requires sufficient funds in the user's wallet to pay the fee. Users can do this through the IQ Market UI or a custom UI or integration. The eligibility process for rented assets is managed by the service provider, and once the rental period concludes, the user no longer owns the rented asset. Rentable assets are displayed on the IQVerse’s page, accessible either on the main page of the IQ Market or through a provided link. ^[10]

Business Cases

Increased Liquidity / Revenue Streams for Projects

By incorporating a customizable rental feature into ecosystems, projects gain the ability to implement royalty fees, fostering increased liquidity and unlocking an additional revenue stream. This approach is employed with the aim of cultivating a liquid market, engaging less active holders and speculators who can earn yield while holding assets for potential future sales. Notably, even in cases where a collection doesn't sell out, projects can mint and list remaining assets for rental, creating a yield-bearing leveraged position and generating cash flow for the treasury. ^[11]

Low Barrier for New Participants Entering the Ecosystem

IQ Protocol reduces entry barriers for new participants, allowing them to access ecosystems without purchasing the underlying assets. Through customizable rental features, participants can engage in 'reward-split' terms with no upfront rental costs, and rewards automatically distributed at the rental's end. The inclusion of 'gasless transactions' eliminates the need for users to bear transaction costs, providing access to the ecosystem with an empty wallet. This inclusive approach enables a global audience with varying financial backgrounds and blockchain literacy levels to participate. ^[11]

Incentivize Asset Ownership

The protocol establishes a non-inflationary yield for asset holders, offering incentives for active members to retain unused assets and presenting speculators with greater investment upside. This dynamic increases asset demand and enhances liquidity in the asset market as yields fluctuate. IQ Protocol's design encourages a balanced ecosystem where holding assets aligns with long-term value. ^[11]

Community Building and Cooperation

IQ Protocol fosters community growth as projects onboard onto the platform, providing opportunities for active community engagement. Leveraging the IQ Market, projects can orchestrate campaigns, tournaments, and promotions either individually or collaboratively with other communities, generating activity and exposure. Future developments in asset interoperability and cross-chain renting will enable projects to form cooperative and co-marketing initiatives for enhanced exposure, as a single asset can be rented for use across multiple platforms simultaneously. ^[11]