The first RARI Reform (RR1): Community Grants and Dev Funding

Nobody likes fees. But on Rarible, it’s different. With this proposal, we kick off the discussion about funding the platform development and community grants on Rarible. For a while now, we have been working as a self-funded entity; now that the platform and the demand grow, we want to level up the game for the community.

You might have noticed that we have already introduced 0% fees within the marketplace. The feature is developed & working: now, we need to decide on the amount. The fees are introduced as a step towards the final goal of creating Rarible DAO and decentralizing the platform.

The core goals are:

  • Dev funding
    Project development takes a lot of time & resources. Fees will let us speed up the development and make the platform better.
  • Community grants
    A part of the collected fees will be allocated for grants to support artists and active community members.
  • Reduced wash trading
    Fees will eliminate incentives for wash traders. If someone makes a fake trade for 100 ETH, once the fees are established, he will have to pay (e.g.) 2% buyers fee and 2% sellers fee which totals over 1,3k USD. As our community helps us identify wash traders, he won’t receive any $RARI –– but will pay a fee for his trick.

Rarible model is different from all other marketplaces and way more flexible, so let’s come up with it together! To give you an example: with the item that costs 100 ETH, if the buyer fee is set at 2%, and the seller fee at 2%, the collector will pay 102 ETH, and the creator will receive 98 ETH.

How do we want this discussion to roll?

  • Start with research! How other platforms do it? What fees & models are out there on the market? Collect and share this info with the community to support your ideas.
  • Spread the word about this RR1! We have just introduced governance process, so not everyone knows about it yet — and this is a very important decision to make for all Rarible users.
  • Suggest buyer flat fee & seller flat fee, based on the competitors and the market
    The fees should be competitive and reasonable. *Please note that for now we don’t support the differences between primary & secondary markets.
  • We will choose the most popular/frequently proposed options and launch the voting next week.

Let us know what your ideas are! :arrow_down:

11 Likes

Awesome! Love the platform and would be happy to support fees especially towards continual upgrades as well as grants to support growing artists! Most platforms that I’ve seen charge about 15%. This is why we decided to charge 9% at the auction house, to be competitive but still provide enough funds to keep our platform going!

Rarible sees significantly more volume though, and I believe many people love it because of the minimal fees and amazing experience. I think its critical to maintain this.

I think 5% would be fair especially considering the rapid growth and volume of the platform. In addition, the team still possesses ≈30% of RARI for purposes decided by the team. 5% is enough to provide a decent revenue while staying low enough to be completely competitive and not be an impediment to sales for growing artists!

tl;dr 5% is gucci

5 Likes

Gonna have to back Danil, here. 5% max imo, this still makes Rarible one of the best platforms for the creators and collectors out there.

4 Likes

(Wouldn’t let me type in OLD ROMAN SCRIPT). I am cool with 4-5% fee as well. This would stop the art from overtly repopulating and also possibly augment/compliment other nft upgrades and options.

4 Likes

A buyer flat fee of 2.5% and seller flat fee of 2.5% seems fair.

5 Likes

this just looks wrong ROB🤣 WE NEED THE CAPS BACK!

1 Like

agreed!! this is a fairly small price to pay on both parties!

I think A buyer flat fee of 2.5% and seller flat fee of 2.5% works well. But as it is Gov Model we would like to have as well transparence about what the money is spent on. It would be as well an interesting and unique move from a blockchain company to be transparent

4 Likes

Maybe, there can be a kind of a leverage system where if the collector is willing, they can pay the entire fee themselves, if not, it is shared between them and the creator. I don’t know if that is viable. Just an idea.

4 Likes

As already suggested by a few others, I think 2.5% for each party is very fair. That would be a total 5% per sale and if you take into account that Rarible has quickly grown to one of the biggest platforms with the highest volume that 5% will quickly add up to a large pot of funds, while having a very low impact on buyers/sellers.

2 Likes

Small clarification, I meant 5% TOTAL (2.5% buyer, 2.5% seller) this should be non intrusive for sales and still generate revenue

1 Like

When selling digital goods 1% fee is amazing- with option to lower it even more when volume reaches Opensea levels. 4-5% is too much!

I think a total of 5% with half on it on the buyer and half on the seller side is a good start. Especially as you also receive RARI which makes more than up for the fee on both ends.

2 Likes

5% seems high. I would say 3% with 1.5% from buyer and 1.5% seller seems fair.

1 Like

Hello Alex and Rarible Peeps

After reading through the comments it appears as though most folks are okay and/or are in agreement with a 5% seller/buyer fee, with the exception of a few of course.

Not only do I think 5% is fair, I feel it may be a little too fair for what you are trying to accomplish, especially when you take into consideration future growth and/or extra features that you and the team may want to add in the future to remain competitive.

Compared to other digital art platforms on the blockchain, platform fees range anywhere from 2%-40%.

For example: Platforms such as SuperRare (SR), KnownOrigin (KO), MakersPlace (MP), and PixEOS all have a 15% platform fee for primary sales.

Mintbase takes the cake with a 2% platform fee (only for items sold), however, additional work/fees are required on the artist/seller part, especially when having to create their own store front.
As self-explanatory as they may make it, it could still be difficult for those that are not as technically savvy and/or for those who do not have the time to manage or maintain their store.
Mintbase also has additional features that other platforms do not offer at the moment and they seem to have a fairly small team, however, they were able to do some fundraising in the beginning and they were also able to secure grants from the metacartel (same for KO), as well as a few other partnerships in Japan and Korea.
While they may only chagre 2% for items sold, there could also be hidden fees when selling their artwork through their store via OpenSea. (2.5% for OpenSea+2% Mintbase)
*sidenote: the same applies for the other art platforms for any art sold through OpenSea

BlockchainArtExchange (BAE) was a little difficult to read but from what I understand they range up to 20% in fees, 10% for the BAE platform and 10% for the DOA pot, with the exception of other fees through 3rd party sales.

ASYNC seems to be right on par with what I am suggesting at a 10% platform fee but it’s also worth noting that each artwork on their platform comes with a masters and additional layers and each bring a 10% platform fee, so this also helps their model.

R.A.R.E Art Labs was the most comical of them all, especially when visiting their team page. They have a 40% platform fee. They preach “Artist Deserve More” but I think they consider themselves the artist, which explains the high platform fees and the reason all the faces of the team are literally covered in money. MONEY, POWER, FREEDOM. (Ha!)

I know there are a couple of other platforms that I may have missed so I apologize in advance if I missed yours.

With that being said, to know that Rarible has been self-funded thus far and given the features and convenience it already offers, it is simply amazing and an awesome accomplishment. Congratulations to you and your team!

If you all were able to accomplish this with 0% fees I can only imagine what you all will do with 5% fees, but even still compared to other platforms features and fees, I propose Rarible takes a 10% fee with an option to only lower as things progress.

In the grand scheme of things we are still very early in the crypto art space and it’s a fairly small pool size of artist and collectors that are in the market so 5% just might not cut it if it takes a while for the community and crypto art space to grow.

Perhaps 5% fees work for what you have in mind, but in my opinion it would also be a good idea to leave room for future developments and grant funding for features you have not considered, such as @ROBNESS “Rari-View button” feature.

It might not be a bad idea to cherry-pick some of the features of platforms offer that fall into what you are trying to build. As I am sure you know, all this takes time and funds so it would be unfortunate to undercharge fees while the rest of these platforms are accepting higher fees, grants, and/or partnerships that allow them promote, market, advertise, and add features that drive more artist & collectors to their platforms.

I feel at 10% makes more sense compared to what’s being offered by other platforms, especially during these early days. I feel it will allow for Rarible to not only add/maintain extra features, but it also allows them to remain competitive with the other platforms.

As things start to come together and the market grows, then perhaps a 5% or even lower percentage of fees makes sense, but for now I say 10%.

You may have a better idea of what’s possible with the 5% fees so if you feel that 5% is more than enough for what you are trying to accomplish, I am in full support but I feel as though you may be selling yourselves a little too short. The convenience the platform offers alone is worth charging a 1-5 percent, so to know that you all may be adding extra features is simply amazing.

Again, congratulations to you and your team for you what you all have accomplished so far. I cannot wait to see what you and the team add to the platform. Much love!

3 Likes

That’s how you argument in a discussion like that. Well done!

The 5% total fee (2.5% buyer, 2.5% seller) sounds good. Has there been much discussion around how exactly the fees would be allocated? I think yearn’s $YFI token uses an interesting model which incentivizes participation in community governance:

  • 100% of rewards collected by the system are sent directly to the multisig treasury. ( for dev funding )
  • The treasury maintains a buffer equivalent to $500,000 USD.
  • All further rewards are directed and distributed to $YFI ($RARI) staked in the governance pool.
1 Like

Big kudos to the Rarible team for including community grants as a destination for the fees.

This is how you invest back in the community and are able to support more complex and far reaching projects, beyond just individuals selling art.

Platforms benefit from network effects. This means that scaling operations (for example paying devs and other operational costs) are proportionally a larger cost at first, but as the revenue (coming from the fees currently being voted) grows, this cost becomes proportionally low.

So I see the amount available for community grants becoming potentially quite large, and the community benefiting immensely from that.

I am looking forward to it!

2 Likes

Option 3 on the poll seems to make a lot of sense. It’s worth noting that relative to other DeFi protocols, 2.5% and 5% are pretty high fees relative to the common practice of ~0.3% popularized by Uniswap.

In this case, different dynamics are at play so higher fees seem in order. I would hope these fees are scaled-down as volume grows as paying a 5% premium as a buyer is quite steep.

My biggest challenge would be expediting the blueprint for the Rarible DAO to oversee the governance of these fees. While I’m all for dev funding and fully trust the team to handle the commissions with good intent, direct governance over the fee pool makes a much stronger case for RARI.

Many have cited YFI in the comments, and I could see a community multisig being a nice stepping stone to the Rarible DAO where commissions feel more directly connected to RARI holders and governance.

Keep up the great work!

I think that Rarible should seriously consider investing in Liability Insurance, as other projects have done, to cover itself against the repercussions of allowing the creation and sale of fraudulent digital artwork on a global basis. It will only be a matter of time before a customer seeks retribution, financial or otherwise, for this type of negligence in the marketplace. It would be a shame to see Rarible brought to its knees and it’s reputation in shambles in such a short time after its creation because of not following sound business practices. What would happen if Rarible’s online gallery was flooded with forgeries and news of its business practices spread through social media like wild fire. Before you start to discuss community grants and charging fees, I suggest you get your business practices in order first, otherwise Rarible looks like just another scam. Ward Weaire, Toronto, Canada wweaire@gmail.com