NFTfi partners with Safe To Create First NFT Rights Management Wallet

NFT lending protocol NFTfi and digital asset manager Safe, formerly Gnosis Safe, teamed up to develop a new product for non-fungible token holders that would add value to digital assets.

Typically, the rights of an NFT owner – to display an NFT, access token-gated content, sign transactions with it or receive an airdrop, for example – are tied to the blockchain address associated with the wallet containing the NFT.

When the digital asset is transferred from that wallet, such as in the case of an NFT collateral loan or NFT rental, the holder can essentially give up physical ownership.

The challenge is to improve NFT rights efficiency. The solution proposed by NFTfi and Safe is an NFT Rights Management Wallet to allow Safe Ethereum wallet users to segregate and delegate certain rights and permissions associated with an NFT to other Ethereum addresses.

As part of the partnership, Safe announced an investment of an undisclosed amount in NFTfi, which will become part of the Safe product suite. Gnosis Safe recently changed to Safe after a spin-off community vote and a $100 million capital injection led by 1kx crypto fund.

Web3 development studio BootNode led the technical implementation of the open source NFT Rights Management Wallet product.

What are the benefits of an NFTfi NFT wallet?

Stephen Young, CEO of NFTfi, told Blockworks that the Rights Management Wallet is not application-specific, and that the long-term vision is to “usher in a new era of utility” and “to unlock enormous value for the entire NFT space.”

The immediate benefit of NFTfi, according to Young, is that it makes borrowing more convenient and cheap. If an NFT is used as collateral in a secured NFT loan, it is moved to an escrow third-party wallet for the duration of the loan.

Programmable NFT assets plus rights management technology, on the other hand, will allow the NFT owner to delegate transfer rights to NFTfi, rather than transferring the asset for the loan period, while still retaining full NFT ownership.

As NFT financial products such as loans, liquidity tools and derivatives become more robust, NFTfi wants to become the leading settlement layer for NFT financial transactions, Young added.

“It follows a platform strategy where external developers and teams can build deal types, such as rentals or options, and use NFTfi’s existing distribution and liquidity to build profitable services on top,” Young said.

Lukas Schor, the co-founder of Safe, confirmed that the investment in NFTfi was not funded through the recent funding round because it happened before the official spin-off from Gnosis and before the funding round closed.

Asked why Safe is focusing on NFT rights management, Schor said Safe has already “gained significant traction with large treasuries” and that NFTs are a “key driver for retail users to adopt more secure self-custody setups.”

“With NFTs, we believe retail awareness to find more robust alternatives is much higher. Besides the monetary value, NFTs also have emotional, sentimental and cultural value that make them irreplaceable in case they get lost,” Schor added.

In a statement shared with Blockworks, Manu Garcia, CEO and co-founder of BootNode, said the project will enable rights efficiency, “which is to NFTs what capital efficiency is to DeFi.”

Get today’s best crypto news and insights delivered to your inbox every night. Subscribe to Blockworks’ free newsletter now.