Remember soulbound tokens? Good for you if you do, read one of our last articles if you don’t. Anyways, lockable NFTs are somewhat resembling the idea of those, while also introducing even more unusual and absolutely new use cases, that we are about to discuss. 🚀
What is a lockable NFT?
An essential question with a very simple answer. 🤓
A lockable NFT is a non-fungible-token that can be locked on a certain wallet by the token’s creator or a smart-contract, attached to that token.
What are the advantages?
Even though, soulbound tokens and lockable NFTs share a similar idea, the purposes and use cases they have are vastly different.
The current NFT token standards like the ERC-721 for example can not give you the opportunity to safely lend your NFT to someone, unless you invent some gimmicky smart-contract or make a contract signed in blood. 🩸
The solution lockable NFTs provide is simply in their name - they are lockable. That means the creator’s complete possession (if needed) of the token with the ability to temporarily send the token to a user and easily return it back afterwards - no need for collaterals, just as simple as that. 😉
Another scenario implementing loans and lockable NFTs is an installment plan. Some tokens are now being sold for 10+ ETH which sounds like quite a heavy sum, when paid all at once. However, when divided into smaller parts and paid periodically, the price does not seem that high anymore. 🙌
You could even create a “Buy now - pay later” mint, which would not technically be buying now and paying later, but would still work. A smart contract, sending the token to the buyer once the loan is repaid will be attached to the token itself, making the procedure safe for both sides - the buyer and the seller.
More on safety
And it isn’t just about fishing (even though there still are cases of people being scammed by an email, who would’ve thought 😆). Your Metamask wallet isn’t actually as safe as you think it is and reaching your private key might not be a problem for some young coding genius.
There is an option of holding your NFTs on a cold wallet (an article about the different types of wallets for anyone wondering what a cold wallet is), but that would definitely cause major inconvenience with using the token itself.
The solution is once again lockable NFTs. Your highly valuable JPEG can be sitting on the Metamask wallet, while being locked to it with the cold wallet acting as an unlock key. 🔑 That way any operation except transferring the token can be done, whereas the later requires you to approve the transaction with the cold wallet.
No matter how good and smart the invader is, a cold wallet can not be hacked. 🙅♂️
Is it actually worth it?
Even though, those two arguments might not sound too convincing, once we remind ourselves the two major issues connected with trading NFTs it all starts to make sense:
- Affording to buy any token, anytime you need it even if there isn’t enough money for investment at the moment.
- Keeping that token safe until you find a buyer and reach an arrangement with the further deal. 🤝
The only issue now is popularising the technology, because once again every innovation needs time for settlement. Keep your eyes out there and wait for those new tokens, waiting for you to lock them. 😏
Stay tuned 📻