Land rental is a significant business in the physical world. It allows those who can’t afford to buy land an opportunity to utilize one of the most important factors of production. Since the metaverse is an alternate version of our world, the same can be said of virtual lands.
Decentraland (DCL) is one of the early proponents of virtual real estate. Today, it is doing the most to remain relevant and actively increase the number of persons using its metaverse platform. The most recent development launched by Decentraland is an automated LAND rental system.
On December 8, Decentraland launched this renting system. This development is necessary to increase the number of persons using DCL LANDs. At the same time, it gives more value to those LANDs by driving more demand.
In this article, Sandstorm will discuss the benefits of the new Decentraland LAND rental system. Moreover, you will learn how to use the system as a landlord and a tenant.
Why LAND rental is necessary
There are two primary reasons for renting out virtual lands. First, not all LAND owners intend to create scenes or experiences on their LAND parcels. Rather, many people buy virtual lands as investments and hope to sell them for a profit.
It is common for real estate investment to last a few years before the price of such land increases exponentially. Therefore, it is only reasonable for investors to generate passive income from such land through rent or lease.
In our physical world, many can’t buy a house straight away, and they opt for a mortgage. Likewise, a vast majority can only afford to live in an apartment and pay rent. Similarly, virtual lands have become expensive assets and are out of reach for countless people.
Accordingly, DCL has created a LAND rental system to mitigate this need. In the past, Some brands might have bought LANDs because of a one-time metaverse event. However, through land rental, individuals and brands can now use virtual locations to meet an immediate need while sticking to an affordable budget.
In addition, Decentraland’s rental system is automated. It uses smart contracts to execute rental transactions. Thereby creating a trustless system in which a tenant cannot make away with someone else’s LAND, as this would be possible if the LAND rental were a peer-to-peer deal.
Decentraland land rental system for landowners
Landowners are virtual landlords. To Decentraland, Ethereum addresses or accounts that own a LAND parcel or estate represent land owners. The new renting system allows land owners to advertise their LANDs as available by listing such parcels on the DCL’s marketplace.
Likewise, it allows owners to set specific prices for which they want to rent out their LAND. This system also enforces the terms of the contract. For instance, it removes tenants’ content from the LAND as soon as the rent deal expires.
How to rent out your LAND
● List the LAND: start the rental process by listing your land on DCL’s marketplace. Only an owner can list his LAND because the Rent Smart Contract must receive a signature from the owner’s wallet before making it available for potential tenants. To list a parcel or estate, visit the marketplace, select My Assets and click LAND. Next, you will find an option to rent out your property.
● Set a fee: every LAND owner decides how much it will cost to rent his virtual property. After selecting the parcel you’re putting up for rent, enter the amount of MANA tokens tenants will pay per day for using the LAND. Note that the system will deduct 2.5% of this fee and transfer it to Decentraland DAO.
● Select the duration of rent: the final step to renting out your LAND is to set a rent period. This period can be 7, 30, 60, 90, 180, or 365 days. Remember to set multiple durations because users will need your LAND for various purposes.
Meanwhile, landowners can set an expiration date for a listing. This will return the permission to use a LAND to the owner since the marketplace will delist such LAND on the date its listing expires.
Decentraland land rental system for tenants
All Decentraland users can rent LAND on DCL’s marketplace. The new LAND renting system gives users straightforward access to available parcels or estates, allowing them to build scenes on the LAND.
To rent LAND, visit the marketplace and select “Land.” Next, click “Available to rent” so the platform does not display parcels or estates that are up for sale. After selecting a parcel, it will display the price per day (in MANA). Then, choose how long you will rent the LAND, and you will see the total fee.
Users will confirm the rent on the next page by typing the fee and choosing the operator’s address. If you are using the LAND, select “I will be the operator of this land.” However, when renting land for another user, enter the user’s wallet address. Finally, approve the payment on your crypto wallet, and you can now use a LAND in Decentraland metaverse until your rent expires.
Note: owners will pay gas fees in ETH when listing LAND, while tenants will pay gas fees in ETH and MANA as rent fees.
How does Decentraland ensure a trustless land rental system?
There are specific rules guiding the DCL land rental system. The following are some of those rules:
- Owners cannot use LANDs or cancel a listing after a user rent it.
- Tenants‘ contents or scenes are deleted from the LAND immediately after their rent expires.
- Owners retain the voting power or right associated with LAND parcels even after renting them out.
- When a rental deal is active, owners cannot sell them or receive bids from buyers.
- Tenants must pay upfront for the total number of days they are renting a parcel or an estate.
- Tenants will instantly receive Operator Permissions after paying for LAND.
- Owners must claim Operator Permissions at the end of a rent deal before they can use their LANDs or upload content.
The new LAND renting system allows all builders to create metaverse experiences. Therefore, brands and creators that cannot buy parcels or estates can now rent one to launch the immersive virtual scenes they have built.