Non-fungible tokens (NFTs) have become common in the online world. Many companies have come forward that allow investors to buy and sell digital collectibles. Consequently, the competition in the industry has also increased significantly. Rarible is one of those companies that has become active in the NFT market. It is an NFT marketplace that allows trading digital collectibles without technical knowledge.
What is Rarible?
Rarible is an NFT platform built on the Ethereum blockchain and utilizes two NFT token standards. The company operates as a digital company and does not have any formal headquarters. Initially, it started its operations in 2019 under Alexander Salnikov, Alexei Falina and Ilya Komolkin. The founders have years of experience behind them in the crypto industry. Specifically, Salnikov has significant knowledge in the field.
Salnikov worked with Falin and Kmolkin on various blockchain projects. In 2019, Salnikov wanted to start a new project. At the time, the three founders came together to work on a new project. Later, they came across the NFT market, where they saw substantial potential. They saw how other companies had succeeded in this industry and wanted to replicate it.
After working on a project for six months, the trio released the first version of the Rarible marketplace in January 2020. In February, they were deep in challenges due to their platform. One of the significant issues was a designer’s work being available on the platform without permission. Although Rarible banned the seller, the platform came under criticism. It also exposed the problems with the NFT marketplace industry as a whole.
However, that did not stop the company from expanding its operations further. In the same year, the founders came up with the RARI governance token. This token gave the community the option to vote on the platform’s future development. In September, the founders also raised their first round of funding through CoinFund. At the time, the interest in NFT trading increased, boosting Rarible.
While OpenSea was the most prominent name in the NFT market then, Rarible wasn’t far behind either. The company was competing with many big names while also attracting customers worldwide. Similarly, Rarible was responsible for processing millions in the NFT market at the time. In June 2021, the company also raised millions in Series A funding.
Though the NFT market hasn’t achieved the same high as then, it has become a stable industry. Although the interest in the NFT marketplace decreased over time, Rarible has continued to be a prevalent name. The company also continues its trend toward future expansion and keeps increasing in popularity. Over time, Rarible has also integrated other blockchains, namely Flow and Tezos, into its open-source protocol.
How does Rarible work?
Rarible is an online tool that allows digital artists and creators to issue and sell custom crypto assets. These assets represent ownership in their digital work. Similarly, Rarible is a marketplace for those assets and a distributed network built on Ethereum. This platform enables trade without an intermediary. The tokens generated by users on the Rarible marketplace falls under NFTs. Each NFT is unique and not interchangeable.
Rarible also provides a marketplace for sellers to link with those creators. However, the first step for the platform is for creators to offer their work through it. This process requires them to “mint” a token using Rarible’s software. Consequently, they must fill out a form on the website and attach their image and other data. Once it has that data, the Rarible platform creates a new token on the Ethereum blockchain.
Rarible leverages Ethereum blockchain to embed within an NFT’s code some data. This data includes the full history of its owners and transactions. Similarly, it provides sellers with the platform to view and acquire the digital asset offered by creators. The software facilitates transactions between both parties. During this process, Rarible also makes money from those transactions.
Getting started on the Rarible platform is straightforward. However, it requires users to create an account through a cryptocurrency wallet. This wallet can be any wallet of their choice and must support one of the blockchains on which Rarible operates. Users can base this process on the MetaMask wallet, among others. Once users create a Rarible account, they can trade NFTs.
There are various ways to trade NFTs on the Rarible platform. However, it depends on where users mint their tokens and the underlying platform. There are two ways to buy an NFT on the platform, fixed price and auction. The blockchain supported by Rarible also dictates this process. Usually, users can use their debit and credit cards to buy NFTs. However, not all wallets and blockchains may allow it. Once users acquire an NFT, they can list them on their profile for display and sale.c
What is the Rarible business model?
Rarible uses a similar business model as other NFT marketplaces. One of its primary competitors includes OpenSea, which also uses the same business model. Primarily, Rarible works through a decentralized platform model. For this platform, the primary revenue source comes from commissions collected from users. As an online platform, Rarible operates through the e-commerce business model.
Rarible also uses an NFT business model, which has become more prevalent. Through this model, the company acts as an online marketplace for NFTs. Essentially, NFTs are digital certificates to ownership of a digital asset. This certificate is unique and non-duplicable. Currently, the NFT business model does not come with significant competition due to its specific nature.
Rarible business model’s primary income source is the money from every transaction. The company uses a commission-based business model to earn revenues for every sale. However, these rates are low and competitive with other platforms like OpenSea. The company uses a similar business model as other decentralized NFT marketplaces. The primary tool offered by Rarible is its platform through which users operate.
Overall, the primary business model operated by Rarible is a commission-based model. The company makes money from its NFT transactions. Although it does not contribute to those transactions, Rarible makes money from every sale. The company earns revenues from every user that buys or sells a digital asset through its platform. Its RARI governance token can also be a source of income for the platform.
How does Rarible make money?
The primary source of income for Rarible, as mentioned above, is commissions. The platform makes money from every transaction. Usually, it includes a 2.5% fee on every sale. The company operates an NFT marketplace business model. Under this model, Rarible offers various services. However, these services accumulate to allow investors to buy and sell NFTs using the online marketplace.
Rarible has also adopted a multi-chain strategy. The company introduced its Rarible Protocol, which is an open-source API. Primarily, it allows it to onboard various blockchains. While other NFT marketplaces focus on the Ethereum blockchain, Rarible has also gone beyond that. The company expanded its accepted blockchains with the addition of Flow and Tezos.
However, it does not increase its total addressable market. On top of that, it also makes it cheaper for users to mint and purchase NFTs. The gas fees on the platform are also significantly lower. However, the company does not disclose how much these fees are. Apart from its open-source protocol, Rarible also facilities adoption by issuing RARI governance tokens.
The platform distributes its RARI token to buyers and sellers. These tokens allow them to trade NFTs through the Rarible marketplace. Similarly, Rarible verifies sellers on its platform through its Adobe partnership. This feature enhances the trust placed in the platform by its users. While it does not help Rarible make money directly, it improves the future earning potential for the company.
Conclusion
Rarible is an online marketplace that facilitates buying and selling NFTs. The company started its operations in 2019, although it got introduced in 2020. Since then, it has ridden the NFT popularity wave to attract many users worldwide. Currently, Rarible competes with OpenSea through its business model. The marketplace makes money from the commissions charged on every transaction.
