Right now, one of the hottest scenes around Ethereum behind DeFi is the NFT sector.
NFTs, for non-fungible tokens, are specially designed so as to be ideal digital collectibles, gaming pieces, and beyond.
Accordingly, some of the most promising projects in the NFT arena lately have been NFT marketplaces. One of those marketplaces has been Rarible, which has gained considerable steam after the project recently announced it would pivot into a community-owned marketplace.
Today, let’s dive into this upstart marketplace to see what the buzz is about and to get a better look at the makings of a rising NFT project.
How Does Rarible Work?
Launched in the beginning of 2020 by Alexei Falin and Alex Salnikov, Rarible offers a straightforward, non-custodial marketplace experience for Ethereum users. To start, you’ll navigate to the Rarible site and connect your wallet (support for MetaMask, Fortmatic, WalletConnect, and WalletLink is offered).
Once you have your wallet linked, you’ll be able to start minting NFTs and browsing the Rarible marketplace for pieces to collect. The marketplace’s main advantages include:
- Being open to anyone to use; some other popular NFT platforms only let approved applicants mint NFTs. In this sense, Rarible is DIY and for the little guy and up.
- A simple, easy to navigate UI. This is big when UX can be tough in the cryptoeconomy.
The Rarible Marketplace
Introduction of $RARI Spikes Interest
Back in July, Rarible went where no NFT project has gone before in unveiling $RARI, the NFT economy’s first governance token effort. The team explained at the time:
“Driven by the will to give our community the power to influence decisions and incentivize active participation, we are launching our own governance token. This new project-management model has proven to be efficient within DeFi industry, and we’re excited to launch the first governance token in the NFT space.”
As for the distribution of $RARI, a portion of the token supply was initially airdropped to NFT collectors in general, while Rarible users can earn the token going forward by making buys and sales on the platform’s marketplace. Buyers and sellers receive 50% of their Rarible volume back in $RARI tokens weekly, so the platform is essentially paying its early users to bootstrap its growth.
Moreover, in the future users will be able to use their $RARI tokens to vote on the direction of Rarible’s roadmap and parameters via the Rarible DAO.
Tackling the Wash Trading Problem
Rarible’s $RARI distribution incentivizes regular users, but it also incentivizes wash traders, ie folks deceptively buying art from themselves in order to earn as much $RARI as possible.
For example, in late July the NFT economy analytics site NonFungible.com announced it was delisting Rarible data as a result of the breakout of wash trading efforts on the platform.
On the plus side, Rarible has since increased its efforts to blacklist wash traders from its platform. It can be a bit of a whack-a-mole problem, so these efforts will surely be ongoing, but the platform’s leadership is actively monitoring the situation and are poised to continue to optimize their defenses.
On September 8th, blockchain tech investments firm CoinFund offered its investment thesis on the NFT economy and accordingly announced it had invested an undisclosed sum in Rarible.
As for why Rarible ticked the boxes for the firm, CoinFund’s Jake Brukhman — a noted NFT analysts in his own right — explained:
“The Rarible team has continued to raise the bar on user experiences for both cryptonatives and mainstream users. Today, Rarible comes with state-of-the-art features and experience for NFT creation: ERC-721 and ERC-1155 standards support, multi-edition mining, custom on-chain collections, and creator verification and moderation. On the demand side, top notch tools are in the works in the areas of discovery, engagement, and displaying works. Users new to blockchain should find friendly user experiences with Magic and Zerion integration, as well as upcoming credit card support.”
Beyond The LAO’s investment into NFT art platform SuperRare earlier this year, CoinFund’s Rarible investment is one of the most significant in the NFT ecosystem in 2020 because 1) it’s one of the first investments of its kind, and 2) it foreshadows other similar investments to come. Moreover, it was an acute spark that sent a surge of interest and attention in Rarible’s direction.
$RARI Starts to Liftoff This Week
The price of the $RARI token was $2.10 at the beginning of September 8th, per CoinGecko. Then the CoinFund announcement happened, and an exodus of new users and traders started paying attention, which in turn translated into a spike of buy pressure.
That gust of buy pressure last for two days, pushing the $RARI price to an all-time high of $10.91 on September 10th. Trading around the token has started to calm down a bit since; at the time of this post’s writing on Friday, $RARI was hovering around $7.89.
Even still, the +3x price run this week shows just how much excitement and buzz is pent up around the NFT sector right now. More and more folks are paying attention, and capital is flowing in as such.
The yInsure Angle
One of the most beloved projects in DeFi currently is yEarn, a yield aggregator project built by Andre Cronje that puts Ethereum’s money lego projects to dazzling and imaginative uses.
yEarn releases new products at a stunning rate, which is why it was no surprise the project rolled out yInsure last month. In short, yInsure lets users take out tokenized insurance on various DeFi activities.
The neat part is these insurance policies are tokenized as NFTs, which means they’re easily tradable on platforms like Rarible. And that’s precisely what users have started doing.
In fact, traders started listing yInsure NFTs on Rarible so fast that the marketplace optimized its support for the assets within hours. And the upside? These users can earn $RARI rewards on top of selling these NFTs as an added bonus. A win-win cryptoeconomy situation if there ever was one!
Today we’re releasing support for NFT #yinsurance, launched last week by @iearnfinance and underwritten by @nexusmutual to cover DeFi protocols risks.
Example: this contract is covering 200 ETH worth of @BalancerLabs smart contract risk valid until 27 October 2020 pic.twitter.com/REHkD7Txko
— Rarible (@rariblecom) September 9, 2020
NFT DeFi Melds Hot, Rarible Helped That
The synergy taking place between the Rarible and yEarn communities presently has catalyzed a bridge between the NFT and DeFi communities, the members of which are learning about the other side sometimes for the first time ever.
This dynamic has already caused an array of other projects to play closer attention to NFT-DeFi melds like yInsure NFTs arriving on Rarible. In extension, you can bet that these kinds of mutualistic relationships are going to bloom as both the DeFi and NFT ecosystems keep growing toward each other. So as this growing continues, we can look back on Rarible as a key early trailblazer.
A Gravity Well for NFTs?
One of the most interesting aspects of the $RARI distribution scheme is that it incentivizes folks to list their NFTs on Rarible.
This is an intriguing wrinkles, because there are other NFT marketplaces around like OpenSea and Cargo. But these platforms don’t have reward token schemes at the moment, so what we’ve seen over the past week is more users taking their NFTs minted on other platforms and moving them over to be sold on Rarible, ie where $RARI can be earned.
This gravity well dynamic could draw in enough activity to make Rarible a tour de force in the NFT economy for years to come.