Welcome $RARI: the first governance token in the NFT space, designed to reward active creators and collectors with a voice in Rarible's future. Make proposals, vote, curate, moderate –– the power is in your hands now.
— Rarible (@rariblecom) July 15, 2020
As one of the first to tokenize governance rights in the NFT sector, Rarible is rolling out a unique marketplace liquidity mining scheme to reward its collectors for usage.
“Over half of RARI’s total supply is reserved for sellers and buyers on Rarible marketplace, who will receive RARI through weekly distribution according to weekly purchases and sales volumes.”
This unique integration of DeFi’s hottest trend integrated into a more consumer-friendly fashion put Rarible on our radar as they look to introduce a suite of well designed incentives to spur marketplace growth. Best of all, RARI is not being sold in an Initial DEX Offering, a strong signal that the company has all the best intentions in mind for the rollout of their new token.
What’s to Know?
Rarible is set to issue 25,000,000 RARI in total, starting at an initial value of $0.34/token. This valuation comes on the back of the marketplaces $2.5M preseed valuation and is set to issue 75,000 RARI or roughly $25,500 in rewards each week through marketplace mining. Here’s a look at how the supply breaks down.
Just as with Compound‘s even split to lenders and borowers, Rarible will allocate the 75,000 RARI weekly reward pool evenly between buyers and sellers. Rarible has made it clear that the marketplace liquidity mining process can be amended as necessary, and this in and of itself is one of the key areas where RARI governance is likely to come into play.
Over time, Rarible will look to transition to a DAO for the decentralized governance of future protocol decisions. In the meantime, RARI will act as soft signalling for important protocol decisions like fees, features and reserve pool allocation. Rarible has hinted they will be looking into something like Aragon Court for mediation, suggesting that the DAO will likely be Aragon-based.
To kickstart this initiative, Rarible will be hosting two airdrops to reward both new and existing users for their support of the platform. Here’s who it’s set to shape up:
- July 15th (today) — Existing Rarible users will receive 2% of the total RARI supply according to past marketplace mining activity split evenly between buyers and sellers.
- By July 20th (Monday) — Documented NFT holders/buyers will receive 4% of the RARI supply for owning NFTs with documented sales on Dune Analytics.
- Future Airdrops— Rarible will look to airdrop RARI to all NFT owners, including those which are not listed on the Dune Analystics dashboard being used for the first two airdrops.
All in all, this airdrop dynamic sets a fascinating retroactive precedent where those who were most active prior to the airdrop being announced receive the most upside. Plus, for any NFT owners who happened to come into possession of a Rarible NFT, there might be an unexpected residual benefit stemming as a result.
Governance Tokens Heat Up
After a multi-year drought in which utility tokens were laughed out of the building, it’s truly amazing to see all the ways in which different crypto-based products are leveraging governance tokens to highlight the best and brightest aspects of web 3 technology.
As someone who has only used Rarible a very select few amount of times, this new incentive program immediately makes me want to dive deeper – a sure signal that many others are likely to do the same.
While it’s unclear if NFT-based governance will be as hot a topic as DeFi governance, there’s no denying the two are closely intertwined. With this, we’ll be sure to keep a close eye on the project as the distribution pans out of the coming months.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.