Proposal for decreasing the weekly release of tokens in the market

Hello,

I would like to propose a decrease of weekly tokens in the market. The weekly amount of RARI is affecting the holders. From my experience with holding a bag of RARI is that the value of the project is decreasing because the inflation and people will not be interested to get in because of this.

I get the idea behind RARIBLE, but artists should stop dump so much coins on the market on investors.

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I agree, especially since the price of rari has increased by a lot since December, it makes sense to reduce the weekly rewards as rari price increases. Also, if inflation stays like this, it will create a future problem when staking is introduced, who will want to stake a token that is getting more inflated as price increases?

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@eric this is the proposal we discussed during the governance call right? To briefly reiterate, I suspect a function defining rewards may be appropraite. Rather than a fixed absolute number, it may be better to substitute a fixed absolute number with a function. The function would include key elements that vary over time. An obvious variable is RARI’s token price. As RARI’s token price changes, so should the number of RARI rewarded to a given purchase/sales transaction. Another relevant variable that changes over time is the cost of minting for creators. A function that, for example, that calculates the number of RARI to cover gas costs is simple. Put simply, give as many RARi as cover gas costs. In other words: (USD_price_of_1_transaction_on_Rarible) / (USD_price_of_1_RARI) = number_of_RARI_to_reward_people_with . In practice this can be a moving average etc–the point here is merely to replace a fixed number of RARI with a function. The funds saved could be diverted towards the DAO treasury to further development of new features and utility of Rarible itself.

Note: This is a comment done as a member of Brain Trust DAO

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Based on the call earlier today, the amount going to buyers and sellers is quite high when they could still be incentivized to buy and sell with a lesser amount. I think the suggestion to test behavior with a lower amount and see the results is a good idea. The point about some of the leftover allocation going to dev work makes sense in order for Rarible to stay competitive as new ideas for how to mint, price, and exchange NFTs or integrate them with DeFi are developed.

Buyers and sellers are of course important, but if the platform is built better than any other with the most valuable features for buyers and sellers then why would they go elsewhere. So incentivizing more builders to create innovative contracts and explore unique ideas by building on Rarible would be highly valuable and may only need a relatively modest reduction in the current weekly release to create a dev fund to test the efficacy.

I think the real issue is inflation though. I’m not really sure if there is currently a “sink” or burning event/mechanism for all the tokens in circulation, but there will certainly need to be if the same amount of Rari is being introduced into the market regularly. And I don’t believe staking alone will be enough to counteract this since staking is an optional behavior, and if the return is in Rari we’re ultimately just inflating the token further and only deferring the time horizon when the inflation will hit as stakes end. Not to mention if Rari is already easy to get and decreasing in value as more is generated, then staking for more doesn’t seem like a very strong incentive.

For these reasons, I think it would be prudent to reduce the amount of tokens released into the market as an initial step, and/or explore burning events that could be introduced on the platform for creators or partners to reduce the rate of inflation while also giving the token additional utility. Maybe an example could be burning Rari to mint NFTs as an alternative to paying gas. In the backend Rari could be sold through a dex for Eth to cover gas costs for users who choose this option. It could be taken a step further and Rarible could just do this for creators by taking the amount needed out of the weekly release and then introduce free minting on the platform as a result of this.

The issues here would be ensuring there’s always sufficient liquidity to facilitate this though. Plus the Rari isn’t really being removed from circulation, so it may not be effective for mitigating inflation. But just an initial thought.

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My suggestion is holders albeit of loss in value of their holding, should refrain from buying additional RARI until there is a clearer picture as to its tokenomics.