I think in about 1 year we’ll begin to see a pick up in EOS leasing. Right now we have only lenders (Folks who own EOS looking to submit loans), no borrowers (very small developer community currently) and the price is too low ($5.80 at the time of this writing) so there’s no need to rent when the price to own is so affordable. However, for folks who do decide to lease today, they will not be leasing at 1-5% or higher because again, dapp developers can just go buy and own EOS for less than $6 per token.

Leasing will be in HUGE demand when we start to see more dapp’s migrate from other platforms and find success on the EOS platform. Here’s what I mean. We need to see more dapps like “EOS Bet”, which was once on Ethereum dapp, migrate over to EOS given what that they see EOS as “the platform” that will maximize the potential of their dapp . Sure, we will see more and more original dapp’s be developed and come directly to EOS the EOS blockchain, but we have to think outside of the EOS-system.

There are currently around 1,000 dapps built on, but not really running on,  the Ethereum blockchain. The problem is, every dapp on the network is currently sharing a blockchain with a max TPS (Transactions Per Second) of around 15TPS. That’s 1,000 different dapps, many of them requiring the ability to register transactions consistently if established, will have to share a blockchain that can only process 15 TPS. But even if ETH provided the proper TPS, we have to take gas into consideration, which can kill many dapps (such as betting or gambling dapps) that require the ability for the user to be able to make small bets on the network without being charged a fee outside of the crypto they actually bet. Similarly so, dapps like TenX, also built on ETH, will need the ability to make transactions quickly for their customers and without the added gas-fee just for operating on the network.

Once these individual dapps begin to migrate over in an effort to maximize their potential on the EOS network, there will be a sudden “shift” and there will be dozens, even hundreds of dapps migrating over to EOS simultaneously….from a multitude of blockchains. Not just because of the chain itself, but because of the community and tools surrounding the chain. That is when I believe Chintai will explode. Think about it,  These projects have their own community that they will also migrate over to EOS through that transition. A community that have supported that project, probably purchased during the ICO phase and were simply waiting for the opportunity for the project to establish their use-case, a use-case that has been limited by current chains.

Developers migrating over will need EOS in order to access the network. This will cause the price to rise due to supply/demand. There will be a moment in time (I am not sure what price an EOS token must be) where Developers will seriously consider if renting in the beginning will be a more viable option to begin in order to get their project off of the ground. Once this happens, then the Chintai and REX leasing market will explode.

Furthermore, Chintai is in a very unique situation. While REX will be a Dan Larimer creation, that will more than likely be exclusive to the EOS blockchain. Chintai on the other hand will not only be able to establish a leasing market for EOS, but we must also remember that any blockchain created using the EOSIO software has the ability to create a token that has built-in utility, meaning that the token represents resources on the network…such as the Sister-Chain “Worbli” which their founder & CEO, Domenic Thomas, has already confirmed that there is a relationship between the Worbli blockchain and Chintai. We also have the EOS forked project, TELOS which is another blockchain that will add utility to the tokens that represent their blockchain. This is incredibly bullish for the future of Chintai because unlike with REX, Chintai will have the ability to implement a leasing market for every single blockchain using the EOSIO software.

How I believe the leasing market will be established on the EOS side-chains is rather simple. The EOS market will be the first to really experience the leasing boom. However, EOS will get to a price per token that even renting could be a bit expensive. New developers will begin looking into alternative side-chains, such as Telos to develop on for example, given that Telos Tokens will be much cheaper. And instead of renting borrowing EOS tokens to build on the EOS chain, they could take that same amount of funds and buy Telos tokens, and own a portion of the network outright.  Let me stop and clarify…this possibility will be based directly on if Telos (or any other side-chain/sister-chain) can establish a strong community and tools for their chain. A blockchain is only as good as the tools available to developers, speed and free transactions are great options to entice developers, but if you dont have tools that can compete then some devs will pay a premium to build on EOS knowing that they will have proper resources and blockchain support. Moving forward, this will be bullish for the Telos token price, and could set the top for the leasing of EOS tokens. Speaking again of EOS, there will be a price point within EOS that will force consideration from developers to actually rent the tokens, then consider building on another EOSIO chain that has established a community and tools in order to be a viable option. Folks who are holding EOS/Telos/Worbli and every other EOSIO software-based token released down the road, will have the incredible opportunity in the near future to have multiple passive income opportunities, from airdrops on those particular chains to also leasing their resources to those developers.

In the next 5 years I see EOS having a real opportunity establishing its self as a top 2-top 3 token in the world, with ideas that promote mass adoption such as URI (Universal Resource Inheritance), a blockchain with virtually limitless TPS and  the removal of gas-fees for Dapps to reach their full potential and for EOS holders to loan out their resources to the developer community similar to Real Estate, which will dry up the amount of of actual EOS tokens being traded on the crypto market.

I believe Chintai will play a major role in the overall success of not just the EOS blockchain, but many side-chains, along with providing holders of multiple EOSIO-based tokens multiple opportunities at passive income via lending the resources that their tokens represent to developers who will also airdrop their project’s tokens to those same EOS token holders.

Speaking of airdrops, I would view it as imperative that Chintai figures out a way for users who are lending their tokens to still be able to vote for BP’s as well as earn those airdrops. Most importantly, figure out a way that when developers take screenshots of the network, EOS tokens holders who are lending on their platform are being properly represented. If they implement an airgrab system then Chintai users can simply use their own RAM to access those airdrops, saving Chintai 100’s of thousands, to even millions of dollars in RAM fees over time just to airdrop to customers directly. This must be solved, and here’s an example why.  If a person owns a land and a home, and they rent it to someone for a source of passive income. If they discover oil under that house while renting it out (equivalent to airdrops), doesnt the owner of the land and house also own the oil under that house? They shouldn’t lose the ability to that resource because they’re “renting”. If Chintai can figure that out within it’s first few months….sky is the limit for Chintai and for every EOS, Telos, Worbli and every future EOS side-chain token holder.

@EOSRelated on Twitter.

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Responses

    1. EOS Related Post author

      This is a very good question. It depends on how well their smart contract has been written. What I have heard is this, when a two entities agree to an exchange, the lender has their tokens staked by Chintai but the resources are available for the borrowers to use. The interest rate that the borrow pays in order to access the resource goes directly to the borrower. Since the tokens are “Staked” in order for them to be taken it would have to either be before the staking occurs or they must unstake, wait for those 3 days for the tokens to be available and then take them. In a scenario like that I would assume that Chintai or any other leasing platform will take full responsibility for tokens being stolen from them or an error or exploit in their code. I could be wrong about the specifics, but above is how I understand it. Great question.

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  1. CryptoBiker

    I enjoyed this article! I checked on their site on the first day and could see that demand was low for now. A year is ages in Crypto land, and it will be interesting to see what the demand will be in say, six months.
    You’re rightly raised concerns with voting, airdrops/screenshots, and yes, that would put me off as a lender if these issues aren’t fixed, they have time, so I’m confident they will, even after being a victim in the ETH DAO or should I say DOA? My first interaction with a “smart contact”, which left me bruised and wary.
    At least now we have the advantage of the EOS constitution, where funds can easily be returned without a fork. I’m bullish on everything working /using/building on EOS.

    Once again, thanks for the article.

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  2. Conceptskip

    Excellent thoughts! I do agree with most your considerations. Maybe there is a bit of potential for lending even right now, with rates being so low, if you want to experiment with a dapp you can get huge amounts of bandwith and CPU for practically no cost, still buying large amounts of EOS carries a risk.

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    1. EOS Related Post author

      There’s definitely potential at this point, especially for any dev looking to access resources dirt cheap. Right now they could pending orders on EOS resources at sub 1% interest rates I see as low as 0.03%. That’s because we only have EOS token holders. When there is little to no demand for renting, then rent fees are extremely cheap. For example, an early bird developer looking to build right now could either buy EOS cheaply right now, but say if they need 100,000 EOS to run their dapp. Instead of spending 600K to buy 100k EOS, they could possibly 100K worth of EOS resources for about $1000 today. Why? Demand is so low. So for a developer this is the golden age. As demand grows, the percentage will go up. It’ll take a few years before we get to percentages that will be viewed as respectable passive income.

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  3. Edgar Holla

    Very nice article. I’ve been having many of the same thoughts so you saved me some time in research and thinking.

    I’m really wondering if there aren’t more use cases for renting cpu than just developers needing it. If normal users would benefit from borrowing then I could also see the market take off significantly.

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    1. EOS Related Post author

      I would definitely assume that regular users who may need extra network resources would add to the use-case that is the leasing platform. I dont know how relevant it would be in comparison to dapp developers, but we are in the very early days of this experiment and I wouldnt try to predict the future. What I literally just learned is that in the future hardware upgrades will make a great impact on the network in terms of resource allocation. Right now EOS is running “Single-threaded”, but once multi threading is implemented on the network, then the level of efficiency and more importantly, availability of resources will be greatly improved. The future is bright with chain either way.

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  4. CryptosDecrypted

    A thoughtful and well-considered article on the potential of resource leasing throughout the EOS ecosystem. Importantly you’ve highlighted some of the current limitations and future possible issues that may arise with leasing. Security in terms of the Chintai Smart contract will also need to be examined. Cypherglas are tabling a proposal to allow holders to increase the staking timeframe which would mitigate potential smart contract vulnerabilities to some extent. Excellent article.

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