Rarible is software allowing digital artists and creators to issue and sell custom crypto assets that represent ownership in their digital work.
Of note, Rarible is both a marketplace for those assets, as well as a distributed network built on Ethereum that enables their trade without a middleman.
The tokens that creators generate on Rarible are known as non-fungible tokens (NFTs). Each NFT is unique, and unlike bitcoins (or other units of money), they are not interchangeable. This property is known as fungibility, which is why tokens on Rarible are called non-fungible.
The first and best-known example of NFTs is CryptoKitties, a game where virtual cats could be bought and sold. These NFTs could even “breed” with one another to create new cats with different attributes represented in their NFTs.
However, Rarible is proof NFTs have since grown beyond virtual cats. Examples of NFTs found on Rarible’s marketplace include digital artworks, memes, and even parcels of virtual land.
Central to the platform is RARI, Rarible’s cryptocurrency. By owning RARI tokens, users can vote on proposals that affect the platform, moderate creators, and curate featured artwork.
How does Rarible Work?
Rarible is a marketplace aiming to link sellers (typically content creators such as digital artists, model creators, or meme-makers) with buyers who can select pieces they wish to purchase.
To turn their work into an NFT, creators must first “mint” a token using Rarible’s software. To do so, they fill out a form on the website and attach their image and other data, such as a listing price, that represents their work.
The Rarible platform then creates a new token on the Ethereum blockchain. Similar to other tokens on Ethereum, the NFT can be transferred between wallets using Rarible’s software.
Rarible leverages the Ethereum blockchain to embed within an NFT’s code the full history of its owners and transactions. Of note, when a transaction goes through, both the buyer and the seller have to pay transaction fees that go to the Rarible network.
One interesting feature of NFTs is the ability to program royalties, or the rights to future cash flows, within these assets. This means that creators on Rarible can set a percentage of future sales and collect them automatically by issuing a token.
This is a major feature drawing creators to this technology because unlike with traditional content platforms, NFTs can be designed to pay out royalties immediately.
For instance, if a piece of digital art listed a 10% royalty, the creator would receive 10% of any consequent sale of that art.
How does RARI have value?
Rarible’s native cryptocurrency, RARI, plays a key role in maintaining and operating its platform.
Specifically, by owning RARI, users gain the ability to submit and vote on proposals to change its rules. This includes voting on possible fee changes, how those fees are spent and the rules governing creator promotion.
It is important to note that voting with RARI is non-binding, and that the Rarible company still needs to accept user decisions and implement them. However, Rarible’s goal is to eventually transfer power to a software-based system controlled by users called the Rarible DAO.
Like many other cryptocurrencies, the supply of RARI tokens is limited and, according to the software’s rules, there can only be a maximum of 25 million RARI.
Of note, 60% of all tokens are reserved for Rarible users and will be distributed to buyers and sellers over the first four years of the network’s operation. These tokens are distributed weekly to those who have either made a sale or a purchase on Rarible’s marketplace in the prior week.
Who Created Rarible?
Rarible is a company founded by Alex Salnikov and Alexei Falin and based in Moscow. Salnikov has worked in cryptocurrency since 2013, while Falin previously co-founded a marketplace for digital stickers that can be used on chat platforms, according to his LinkedIn profile.
In 2020, Rarible raised its first round of funding from the New York-based venture capital firm CoinFund, which has been one of the firms that are most confident about the growth of NFTs.
It argues that NFTs represent a new way to own digital content and that digital content will be a massive market in the years to come.