Implementing Smart Contracts: The case of NFT-rental with pay-per-like

TL;DR

This paper presents a blockchain-based NFT rental system using a pay-per-like model, highlighting benefits and challenges such as high fees, fairness issues, and trust tradeoffs in digital art sharing.

Contribution

It introduces a novel NFT rental framework with smart contracts on Ethereum, addressing economic and trust issues in digital art rentals.

Findings

Blockchain offers advantages like transparency and automation.

High transaction fees can hinder adoption for niche artists.

Trust-cost tradeoffs are necessary to prevent manipulation.

Abstract

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