What is Rarible and how can you invest in it?
Rarible is a non-fungible token, or NFT, marketplace built on Ethereum with multi-chain ramping. It is part of the Rarible Protocol, a set of tools used to query, mint, list, buy, or sell NFTs.
Want more like the Rarible Guide? Scroll to the bottom to read more and a ready of other Blockworks investor guides.
A quick introduction to the NFT markets
There are many NFT markets, and while they all support the transfer of NFTs, each has its own primary purpose and audience. Some focus on event admission, others on GameFi, and still others on music and streaming. Rarible is primarily an art/collectible NFT marketplace, though it supports most NFT styles, including 3D iterations.
For more in-depth reading on other NFT applications and their markets, see the Investor’s Guide to Music NFTs.
What is rare?
Founded in 2020 by alex salnikov, the Rarible NFT market is one of the most popular markets in the crypto space. With roughly $16 million in venture capital from the likes of CoinFund and Coinbase Ventures, the platform has expanded to a user base of 1.6 million since its launch.
It is part of a protocol of the same name that is governed by the DAO and is open sourced and serves as a toolkit for developers and entrepreneurs to launch not only their own NFT collections, but also custom storefronts.
With Rarible Protocol’s RARI governance token, users can directly shape the evolution of the protocol and benefit from its success.
The Rarible case
With the market war in full effect and platforms like OpenSea under fire for centralized decisions, community platforms like Rarible are a compelling alternative.
However, while Rarible plans full decentralization in the future, RARI’s governance token is not yet binding: the core team still has the final say on all decisions. That said, multiple structures have been put in place to balance power and reward users in the meantime.
To generate revenue, Rarible splits a 5% fee equally between the buyer and seller on each transaction. There are no other charges.
Previously, platform users were rewarded every Sunday with an airdrop of 75,000 RARI tokens: 50% divided among buyers based on their activity and the other 50% divided among sellers in the same way. .
This airdrop distribution was intended to continue for approximately another 2 years, for a total run time of 4 years. However, RARI holders voted unanimously to end this weekly distribution on January 16, 2022, due to the model not working as an effective growth mechanism, as well as abuses by wash traders.
The total supply of RARI is capped at 25 million tokens. Ten percent of the total supply has been shipped from the air to users. Thirty percent is currently owned by the Rarible team and its venture capital investors. The remaining 60% was intended to be distributed in the now canceled weekly airdrop.
Due to the semi-decentralized nature of its DAO (decentralized autonomous organization), RARI tokenomics is flexible and constantly evolving. What this means for token distribution is unclear, as the RARI team has only suggested that “the DAO is shifting its focus to allocate more funds to next-generation web3 projects that are based on the Rarible Protocol and the long-term growth of space”.
As with all NFT markets, the platform’s primary use case is the transfer and collection of non-fungible tokens. However, the Rarible Protocol aims to expand to all kinds of NFT usage in the space and has brought the Flow and Tezos blockchains together to allow for greater interoperability.
With no mint fees, Rarible offers a low barrier to entry for creators and makes scaling the collection accessible to all.
Through the use of multiple token standards and smart contracts, including ERC-721 and ERC-1155, both private and public, almost all types of NFTs are supported. Users can decide to mint true NFTs that cannot be changed, or they can mint flexible NFTs that can use smart contracts to change values in the future, should a new utility be needed.
By allowing independent developers to build projects freely with the open source protocol, Rarible has fortified itself against the lack of speed with which centralized organizations tend to operate. Development happens quickly and more use cases are added frequently.
Currently, users can not only buy and sell, but also mint, store, display, send, and use their NFTs (depending on the utility of each NFT, of course) directly from the platform.
How to invest in Rarible
In the past, investing in Rarible was as simple as using the platform. Because users received airdropped tokens, participating was enough to win.
Now, however, the options for investors are more limited and traditional, at least for the time being.
As usual, the main way to invest in a project is by buying its token. You can buy RARI on any number of exchanges, including Coinbase (centralized) and Uniswap (decentralized).
Use Rarible to collect or sell NFT
Aside from venture capital funding (which the core team has not announced any further plans for), buying RARI is the only way to directly invest in the project. While you no longer receive RARI for using the platform, you may want to invest directly in NFTs. Buy NFTs from others to start a collection, or mint your own and build an audience, if your research helps you decide it’s the right platform for your needs.
Purchasing RARI grants you access to the Rarible DAO community and the ability to influence the future of the project. Some choose to buy and hold the token, some have created separate liquidity supply/yield farming protocols for the token (always beware of 3rd party groups), and others use them for governance.
Each investor must weigh their own goals and risk tolerance. Rarible is one of many NFT markets, each with its own strengths and weaknesses. Your goals and interests are the best guides.
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Find out. check The Investor’s Guide to Music NFTs, The investor’s guide to the avalanche, The Investor’s Guide to DeFi 2.0 and The Investor’s Guide to Yearn Finance.
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