The NFT marketplace aiming to be a DAO: Rarible
NFT (Non-Fungible Tokens)s have recently been hyped as even well-known celebrities started minting their works (or tweets), putting them up for sale. While some suggest that the most significant hype is over, NFTs are most likely be remaining in some form or another.
Especially for digital art or items such as in-game collectibles, NFTs provide undeniable benefits, including a tamper-proof record of ownership, liquidity and trading on secondary markets.
Fuelled by the NFT boom, several marketplaces for these tokens have launched. Most famously opensea, but Rarible is one to note as the team follows an exciting approach attempting to turn its whole marketplace in the long-term into a decentralised autonomous organisation, which is controlled and upheld by tokenholders.
Rarible is an NFT platform that allows users to create and trade digital collectibles. It was founded in 2020 by Alex Salnikov and Alexei Falin, who had some previous involvement in blockchain and cryptocurrency. Users of the platform can create their own NFTs, which allows content creators to monetise their art. The process itself is pretty straightforward:
- Connect ETH wallet to Rarible
- Go to create, select if it’s a single NFT or an NFT with multiple editions
- Upload the art
- Specify name, description and other features
- Create Item
- The wallet is used to sign the transaction and to pay for gas.
When creating an NFT, artists can specify other features such as royalties. When setting a royalty, the original artist will receive a fixed percentage of each subsequent sale of his artwork. The Rarible platform creates a new NFT on the blockchain in the background, including a complete history of ownership and transaction embedded. Like most NFT platforms, Rarible is built on Ethereum, which can occasionally make it expensive for artists to mint their NFT at times of high network congestion.
While Rarible is currently still centralised in its setup, the long-term goal is to create an entirely community-owned marketplace. The Rarible token (RARI) will play a crucial role in putting users in charge of the platform. The maximum supply of RARI is 25 million — no more RARI will ever enter circulation. 10% of supply are used for airdrops, 30% are allocated to investors, and the remaining 60% will be fueling marketplace mining.
Marketplace liquidity mining describes the process of encouraging active participation in the Rarible platform by rewarding users with RARI. Users earn RARI through buying and selling on Rarible. Every week 75000 RARI are distributed among buyers and sellers on RARI equally for the first four years.
RARI can then be used for governance. RARI holders can vote on system upgrades, submit development proposals, create featured artworks or moderate platform curators. For now, voting is non-binding, and ultimately, the Rarible team will implement changes. Nevertheless, in the long-term, Rarible wants to be a transparent DAO.
As such, several governance principles are highlighted:
- Radical inclusion: every RARI holder can contribute to the platform and express ideas.
- Self-expression: as a base for most artist works, it’s only sensible that Rarible includes self-expression in its governance. However, this goes further than just artistic freedom and relates to anyone having the opportunity to bring their ideas on updates, new features, project ideas in front of the rest of the community.
- Positivity: At the end of the day, RARI holders will have a shared goal of making the platform successful. Nevertheless, by stressing the positivity, Rarible underlines the importance of holders to think through their proposals first before presenting them and carefully consider the impact changes can have on the platform. It goes without saying that all proposed changes should be to improve the platform.
- Responsibility: Every proposal has to include solid arguments in its favours and steps outlining the implementation process.
- Transparency: anyone can submit or comment on improvement proposals. Until a complete DAO status is reached, this should be done transparently, including the name of the person proposing and the amount of RARI they hold.
While Rarible is still behind opensea in terms of trading volume, the platform has made some headlines, with Lindsay Lohan auctioning off a tweet on it for $59,000 ETH. The team has been fighting wash-trading activities on their platform to ensure the safety of all their users. Another interesting development has been the creation of tokenised insurance for several DeFi activities by yEarn called yInsure. Insurance policies are created as NFTs and, as such, were soon listed on Rarible.
With an increasing interest in DeFi and digital art, Rarible is a player to keep an eye on. It’ll be fascinating to see if they can implement a complete, transparent DAO using their RARI token.
RARI is now trading on our exchange with BTC and USDT pairs.