Rarible wants to be the Google Flights of NFTs—and so much more

NFT marketplace Rarible is introducing a sweep of updates this week, including one that falls in line with industry-wide trends, and another that pioneers a newer path in Web3.

Rarible—which is one of the blue-chip NFT marketplaces, alongside OpenSea, Nifty Gateway, and SuperRare—on Monday rolled out an aggregator feature, and on Thursday revealed that its token governance board has voted to sweeten the perks for its users and investors, in a push from the company to luster up its appeal in an increasingly crowded crypto space.

An aggregator allows Rarible users to purchase NFTs from various online marketplaces across the web, in a single purchase within its own platform. Such a feature can greatly cut down the cost of NFT trading for digital asset speculators. Marketplaces often offer unique items based on the blockchains they support, and without aggregators, traders must make a patchwork of purchases across the different platforms—thus paying multiple so-called “gas” fees that accompany every blockchain transaction. For high-frequency traders, those fees can add up to a small fortune: Earlier this year, Protocol reported that gas on OpenSea was averaging $500 per transaction.

It’s a problem—and a solution—that hasn’t gone unnoticed. Aggregation is now a growing trend in NFT world. In April, industry giant OpenSea snapped up Gem, a leading stand-alone aggregator platform. Then in June, Uniswap Labs, a massive decentralized cryptocurrency exchange, acquired Genie, a rival of Gem in the aggregation field.

Rarible’s foray further signals the need for marketplaces to explore aggregation in order to stay competitive. According to the company, its aggregator will cull listings for NFTs hosted on the Ethereum blockchain, from marketplaces including OpenSea, LooksRare, X2Y2, and Sudoswap.

“If you want to buy an item now, checking every marketplace is a lot of work,” says Alex Salnikov, cofounder of Rarible. As he explains, Rarible’s aggregator will also scan the web for the best possible prices, much like Google Flights does for plane tickets.

Sustainable token incentives

But the other half of Rarible’s sweeping update—altogether, dubbed “Rarible 2?—could blaze a trail in forging token-based incentives for trading NFTs. Like most crypto institutions, Rarible mints its own cryptocurrency token, $RARI, which is governed by a decentralized autonomous organization, RARI DAO. The tokens were paid out as a reward for buying and listing NFTs on Rarible, and while they aren’t worth much at current prices (roughly $2 per coin, according to CoinGecko), they function as a sort of stake in the company, whose value will rise if the company prospers. They also give token holders a voice in deciding the company’s direction, as tokens can be used to cast votes on DAO governance proposals, which might encompass such tasks as curating artwork on the website or moderating the influx of creators.

The DAO’s most recent move is to approve a new process of “$RARI locking,” a so-called “vote-escrowed” system in which token holders must lock their tokens—meaning they cannot be withdrawn from the Rarible system or spent in any way—in exchange for voting power, as well as other perks like 0% trading fees on items listed on Rarible and an invite to a special Discord channel. It’s a way for Rarible to retain a steady stream of business with users—by binding their tokens in contract, but also simply by offering shinier fiscal incentives. And according to the company, it makes Rarible the first blue-chip marketplace to offer sustainable token incentives.

“The primary driver for this program,” explains Salnikov, “is that we want to have committed governors, ones that will bring real value to the platform”—not just those looking to cash their check and bounce.

Several NFT marketplaces have endeavored to lure users by paying out tokens, but that strategy has a limit. They cannot mint new coins forever. Rarible, for example, will only circulate a total of 25 million $RARI over the course of its first four years (it was founded in 2020)—it’s now at 15 million, says Salnikov. Meanwhile, LooksRare’s LOOKS token circulation is maxxed at one billion, although reports have suggested its rewards structure could be problematically gamed with a scheme akin to wash trading, where users buy and sell their own NFTs back to themselves in order to collect rewards.

While Rarible is the first major marketplace to adopt a vote-escrowed system, it wasn’t the first to toy with token-based incentives (LooksRare might win that credit), and it certainly won’t be the last, as the NFT world grows and traders demand better, smarter, and more lucrative markets for their craft.