Proposal for a new Aavegotchi Rental Protocol

Gm Everyone!

Today, I’m super excited to come here on behalf of Orium Network to unveil a Proposal we have been working on for the past few months: A new Aavegotchi Rental Protocol :tada: :partying_face:

The complete proposal documentation is here, but I will also leave the main points below.

Why does the DAO need a new Rental Protocol?

The current Rental Protocol was specifically made for the Aavegotchi use case. It will take a great deal of time to add support for other NFTs, which would have to be implemented one at a time with much customisation.

Moreover, the DAO does not benefit from Rental activity. 100% of the $GHST generated goes straight to the lender, meaning token holders are not rewarded even when the marketplace bursts with usage.

Finally, the DAO needs a standard interface to list new NFTs when they are launched. There are many unexplored use cases for lending Wearables, Tiles, and Installations, and by providing a standard interface, the DAO will have an easy path to list these new assets.

Proposed Solution

We propose to create a custom implementation of EIP-7432, including a contract that stores all role assignments for all NFTs of the Aavegotchi ecosystem. This approach will tremendously simplify how utility delegation is implemented since all logic will be centralised in a single contract owned by the DAO.

However, it’s important to highlight that this proposal only covers Aavegotchis, Land Parcels, and Wearables. Other NFTs can still be listed, but we must review their current functionality to ensure they will work as expected.

In addition to the rental functionality users are already familiar with, this proposal includes the following features: Royalties, Non-Custodial Rentals, Direct Rentals, and Automatic Expiration.

Royalties

Currently, the DAO does not benefit from Rental activity. This proposal aims to change that by introducing royalties: a collection-based fee implemented by the new Rental Marketplace. With royalties, the DAO can decide through governance how much should be charged and where the funds should go.

Non-Custodial Rentals

Unlike conventional models where NFTs are transferred to the borrower’s wallet, Non-Custodial Rentals enable users to delegate utility while retaining the asset. This approach represents an important security feature since the ownership and utility are implemented separately. Furthermore, this functionality allows users to sell their NFTs even when rented.

Direct Rentals

There is no need for a marketplace when NFT Owners rent their assets without charging any tokens. Direct Rentals cover this scenario by allowing anyone to grant a role (delegate utility) without a marketplace listing.

Automatic Expiration

To end an Aavegotchi Rental, users must submit a “Claim” transaction after the expiration date. With EIP-7432, rentals will expire automatically, meaning users will not spend additional gas to reclaim their assets.

Deliverables & Timeline

Here is a complete list of all the deliverables included in this Proposal:

  • Smart Contracts:
    • Aavegotchi Diamond contract update.
    • Land Parcel Diamond contract update.
    • Wearables Diamond contract update.
    • New Contract: Roles Registry (EIP-7432).
  • Subgraphs:
    • Roles & Marketplace.
  • Front-End & Back-End:
    • UI for Direct Rentals.
    • UI for Marketplace.
    • API to parse Subgraph data.

All deliverables will be transferred to the DAO control, except for the Front-End & Back-End. After consulting with the Pixelcraft team, we concluded that it might take too much back and forth between teams to design the Front-End according to the Aavegotchi guidelines. For this reason, the Front-End will initially be available at orium.network, and the DAO will incorporate it into the aavegotchi website on its own time.

It’s also important to add that the Marketplace contract was not included in the deliverables. This contract will be open-source and will never hold Aavegotchi tokens. However, since this contract is deeply associated with the Front-End, the team will have to support it long-term. When the DAO adds the Front-End to the aavegotchi website, they will also redeploy this contract. Just like ERC-721, anyone can deploy their marketplace for EIP-7432.

Cost Breakdown

The team working on this project contains five full-time developers: three Solidity Engineers, and 2 Full-Stack developers. Since we will spend four months developing the project, and with an average compensation of 5,000 DAI per developer per month, the team is requesting a budget of 80,000 DAI to deliver this project.

We also suggest a payment schedule of three tranches:

  1. 20,000 DAI when the proposal is approved.
  2. 30,000 DAI when the Smart Contracts are delivered.
  3. 30,000 DAI when the Subgraphs and UI are delivered.

ROI (Return on Investment)

The ROI assessment of this Proposal can be evaluated through various metrics. Nevertheless, considering a purely financial ROI, the result would depend on the marketplace volume and the royalties established by the DAO. The following table estimates the financial ROI of this Proposal using a 3.5% royalty (which is the same as the Baazaar):

Yearly Volume Royalty Yearly ROI
$500,000 3.5% 21.88%
$750,000 3.5% 32.81%
$1,000,000 3.5% 43.75%
$2,000,000 3.5% 87.50%

As demonstrated by the table above, the DAO would still earn a substantial return even in a low-volume year. However, many essential metrics were not included in this simulation. For example:

  • New use cases are unlocked by allowing users to borrow Land and Wearables.
  • User onboarding friction should decrease.
  • Crucial infrastructure will be created to enable more assets to be listed.

Why Orium?

Orium has been actively building on the Gotchiverse since 2021. We maintain the most popular Petting Operator in the space and manage hundreds of Rentals through our Scholarship Platform.

The team is doxxed, has a track record of delivering high-quality open-source projects, and firmly believes in the mission of Aavegotchi.

8 Likes

This is a huge win win for everyone, DAO generates new revenue, wearables, tiles, land parcels will be able to be rented directly!!!

2 Likes

This is most excellent.

Roles are one of the three things we need for a modern directory structure. The others are groups(guilds) and player accounts(cartridges)

With these components we leave web3 v1 in the dust and can do modern gaming/domains

The renting part is great too, just thought a lot of people might not see what this enables to be built on top of it.

1 Like

Hi everyone!

For those interested in the progress of ERC-7432, we now have it under the official ethereum website: ERC-7432: Non-Fungible Token Roles

Slowly, but surely :rocket:

1 Like

Sig prop is live frens: Snapshot

For VLT holders, the proposal is also under vote in the GotchiVault: Snapshot

Hi Everyone,

The Core Proposal is now live!

Aavegotchi DAO: Snapshot
GotchiVault DAO: Snapshot

1 Like