Revamp the Aavegotchi Rental Protocol to support Parcels and Wearables

Author: ernani.eth Gotchi ID: #19417 Quorum requirement: 20% (9M) Vote Duration: 8 days XP reward: 20 XP to each AAvegotchi that is in the voter’s wallet Discussion link: https://discord.com/channels/732491344970383370/1142228456491458652

Gm Everyone!

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

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 ERC-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 ERC-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 (ERC-7432).
• Subgraphs:
  • Roles & Marketplace.
• Front-End & Back-End:
  • UI for Direct Rentals.
  • UI for Marketplace.
  • API to parse Subgraph data.

After assessing the technical effort to implement the items above, the team estimated the development time in four months, which should be spent according to the image below:

Please note that it will take additional time to migrate the Rental Protocol once development is completed, which we will coordinate with Pixelcraft.

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 aavegotchi.com 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 aavegotchi.com, they will also redeploy this contract. Just like ERC-721, anyone can deploy their marketplace for ERC-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, 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.