🤔 What is Rarible ?
Rarible is a decentralized NFT marketplace that connects NFT sellers and buyers.
The platform can also be used by artists to mint NFTs and later sell them on Rarible marketplace.
What is an NFT ?
NFT stands for non-fungible token. A non-fungible token is unique and there cannot exist another token like it. For example, a plane ticket is unique — it specifies a specific seat, on a particular flight, at a specific time.
Whereas fungibility translates to the ability of a token to be replaced by an identical token. For example, Money is fungible because it doesn’t matter what physical dollar bill you have. Every dollar bill is worth $1, every five-dollar bill is worth $5, and so on. No matter where the bill was printed or where you got the money from.
NFTs are a form of digital nonfungible tokens.
NFTs have value because:
- Scarcity: NFTs, are distinct pieces of digital media that are verifiably scarce.
- Unique: No two NFTs are the same — they’re not interchangeable. The metadata of each NFT is an unalterable record that gives it the certificate of authenticity.
- Ownership: NFTs have an associated blockchain account.
- Transparency: Complete history(minting, issuance, transfers etc) of NFT is recorded on decentralized, immutable, censorship-resistant blockchains. Buyers can verify the authenticity of NFT before buying.
NFTs are not just limited to crazy artwork. They can be used to represent other assets such as:
- Blockchain domains
- In-game items
- Ownership of real-world assets like houses etc.
All these NFTs can be sold/bought on Rarible
💡 What role does RARI token play ?
RARI is ERC 20 token. It is the governance token of Rarible ecosystem. RARI holders are entitled to:
- Submit proposals to upgrade Rarible.
- Vote on proposals.
- Moderate content on Rarible.
- Curate NFTs on Rarible.
Currently, Rarible DAO is under development. Hence the votes are advisory and not binding in nature.
📝 Origin of Rarible
- Alex Salnikov and Alexei Falin founded Rarible in Moscow in 2020.
- The project raised over $16 million over three funding rounds in 2020.
- The project issued its governance token – RARI in July 2020.
- Alexei Falin:
- Alexei is alumni of the Higher School of Economics, Russia.
- He founded sticker.place, a marketplace for iOS 10 sticker packs in 2016.
- Alexei co-founded Rarible in 2020.
- Alex Salnikov:
- Alex has Bachelor’s degree in computer science and Masters’s degree in Data Science from Higher school of economics, Russia.
- He cofounded Coinoffering and Zenome in 2016 and 2017.
- He also has experience working as chief product officer at Humaniq and department manager at Zipal.ru
- He cofounded Rarible in 2020 and currently works as head of product at Rarible
😌 What problems does it solve ?
- Artists have to pay a large cut to middlemen and centralized market makers for organizing auctions for their work.
- Artists are not paid royalties and cannot track their artwork being sold in secondary markets.
- Buyers do not have a platform where they can browse, filter, compare and sort art to find the most suitable artwork before purchaseing. Current system makes it difficult for buyers to identify an original painting from a fake.
- Artists can use Rarible platform to mint NFTs. Whereas buyers have the option to organize all their NFT collections in one place.
- Unlike physical art which stays locked inside some room, buyers have the option to show off their NFTs at various places like galleries at Decentraland, etc.
- NFTs do not require care, maintenance, cannot be damaged and do not require physical security.
- Various features can be coded in NFT smart contract:
- Unlockable content: Content only becomes accessible once NFT is bought. For example – secret message to buyer, access to high-resolution picture etc.
- Royalty: Developers can program NFT to pay a share of every sale whenever it is sold in the future.
⚙️ Working Demo
Rarible has a many competitors:
😨 Risks and challenges
- Competition: There are large number of projects competing to create decentralized NFT marketplace.
- No profit model: Rarible received initial funding and has RARI tokens in Rarible fund. However, the project does not have any ongoing source of revenue. Rarible is a long-term project. The team may find it difficult to sponsor future developments and lose interest once they run out of funds.
- No USP-Unique selling point: Sellers would want to sell their NFT where there are large number of buyers and can get the maximum price. Similarly, buyers would want to buy from a place where they have many options to choose from. It is difficult for Rarible to differentiate itself and offer something unique that other competing projects cannot provide.
- Fraud: Many sellers create multiple accounts and buy/sell their NFT to create a false history and a false perception of value. This type of manipulation will become even more widespread as Etherium solves gas fees issues.
- Etherium: RARI is ERC 20 token. It is struck with high gas fees on Etherium network, till the time the issue is resolved.
RARI has max supply of 25 million tokens. They have been distributed as follows:
- Investors and team: 30%
- Airdrop: 10% of supply was airdropped to all Rarible users and people holding NFTs regardless of platform.
- Marketplace minning: 60% of tokens are reserved for users of Rarible platform. Every week 75,000 tokens are airdropped to users who bought/sold NFT on Rarible. This encourages active participation and bootstraps initial liquidity till the time market takes off.
RARI is a governance token and the project is distributing the tokens to individuals actively involved in NFTs and Rarible which will prove beneficial in the long run.
RARI tokens have a fixed maximum supply. However, every week 75,000 new RARI tokens are airdropped to Rarible users. This inflation will reduce over time as all the RARI tokens earmarked for marketplace minning are released.
Token’s price increases due to demand pressure.
Demand pressure on RARI token will come from:
- Governance: Users willing to participate in Rarible governance will acquire RARI token.
- Speculators: They will buy RARI tokens for future price appreciation.
Token’s price decreases due to supply pressure.
Supply pressure on RARI token will come from:
- Marketplace minning: 75,000 RARI tokens are being distributed to users of Rarible every week. Some of them, who are not interested in taking part in Rarible governance will sell their holdings.
NFT markets have multi-billion sales volume which is increasing exponentially.
Today NFTs represent artwork and in-game items. Imagine the market cap once ownership of real-world assets like land, house, car etc is tokenized.
Holding RARI token is not the same as holding a share in a company. However, it grants voting rights to holders who get to decide fate of Rarible project. Price of RARI token will rise as long as the project keeps growing.
🧐 Indicators to watch out for
- Google trends for “non fungible token”:
- Their Youtube channel is growing:
- Their Twitter following is growing:
- Monthly users are increasing:
- Artists are minting NFTs on Rarible:
- Most of the NFTs are minted on Rarible:
Most of the big projects like Enjin and Decentraland will make their own marketplace. However, Rarible NFT marketplaces will be used by artists and small projects.
There is no doubt that NFTs will play a major part in the future. But it is very difficult to pick up winner projects from such a large number of competitors.
😊 Do further research
You can continue your research by using following resources: