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Non-fungible token (NFT) mania has swept the world in 2021. A subcategory of cryptocurrencies, comparable to DeFi, NFTs have been used to sell digital art and collectibles, and are becoming increasingly popular in the gaming ecosystem. With increased popularity, platforms focused on the sale and purchase of NFTs have been developed. One platform, that was the first to distribute a crypto governance token in the NFT space, is Rarible.
What is Rarible?
Rarible is a marketplace for the sale and purchase of non-fungible tokens (NFTs). Users can also create and mint their own NFTs on the platform, making it accessible to those with no coding experience. Launched in 2020, the platform was built on the Ethereum blockchain so that it can facilitate the exchange of NFTs.
What is an NFT?
Non-fungible tokens (NFTs) are ERC-721 or ERC-1115 tokens that are distributed across the Ethereum blockchain. Developed in 2017, NFTs have since grown in popularity with NFT mania truly taking hold in early 2021. They are digital tokens that have so far been used to prove ownership of unique collectibles. These unique collectibles include digital artwork, virtual gaming accessories, music, domains and many more. The ownership of any NFT can be tracked through the Ethereum blockchain.
They are non-fungible because unlike fiat currency or other crypto tokens, such as a $10 bill or 1 BTC, they do not hold equal value to each other. A $10 bill can be swapped for any other $10 bill. 1 BTC can be swapped for any other 1 BTC. An NFT can not be swapped for any other NFT because the value of that unique item it represents will be different.
Interestingly for creators, NFTs can be programmed to provide instant royalties to content owners if a digital asset is sold for a second time. If an NFT is sold on, the original content producer can program the smart contract to grant a certain percentage of the exchange price back to them.
How does Rarible work?
Rarible puts content creators in connection with potential NFT buyers. When a content creator places a piece of artwork, meme or digital asset on the platform Rarible mints (creates) an NFT token that represents the piece of content. When a buyer purchases the content, the NFT is sent across the Ethereum blockchain to their digital wallet. The Ethereum blockchain then stores a record of that transaction.
The Rarible platform is governed by the native cryptocurrency token RARI, which gives users the power to vote on the development of the platform.
How to buy NFTs on Rarible
To buy NFTs on Rarible you will need access to a Web 3.0 digital wallet, such as Metamask. Web 3.0 digital wallets act as a bridge between your digital cryptocurrencies and applications built on the Ethereum blockchain such as Rarible.
How to buy an NFT
The NFT for the digital collectible or artwork will then be sent to your digital wallet. It can be transferred to any other wallet on the Ethereum blockchain.
Depending on the NFT you may also receive a high-resolution digital copy of your selected collectible for you to distribute as you wish.
A 2.5% purchase fee is applied to every purchase in Rarible.
How to sell NFTs on Rarible
Once you have purchased or created an NFT on Rarible you may wish to sell that NFT to make a profit. Purchased and created NFTs can be viewed in your account tab.
How to sell an NFT
- Rarible. Head over to the Rarible website and connect your Web 3.0 digital wallet.
- Account. View the NFTs currently within your Rarible account and click on the one you would like to sell.
- Put on sale. Look for 3 dots next to the NFT that you wish to sell (adjacent to the title of the NFT). In the drop-down menu click "Put on sale".
- Instant sale price. Toggle on "Instant sale price" and enter the amount that you would like to instantly sell the NFT for.
- Confirm. Confirm the posting of your NFT by clicking on "Next".
The chosen NFT will now be on offer to buyers via the Rarible exchange. A 2.5% sales fee is applied to every NFT sold through Rarible.
How to create an NFT with Rarible
The barriers to entry with Rarible are extremely low, which is why it has become one of the most popular routes to create and sell NFTs. Creating an NFT on Rarible is straightforward and does not require any programming experience.
How to create an NFT
- Rarible. Head over to the Rarible website and connect your Web 3.0 digital wallet.
- Create. Click the blue "Create" button in the top right corner of the screen.
- Choose NFT. Select whether you would like to create a single NFT or create a collection of NFTs.
- Upload media. Upload the media file that you would like to sell.
- Details. Specify the details of your NFT such as the name, description, price and royalty information.
- Create. Submit your NFT by clicking the "Create" button.
- Confirm. The gas fees for NFT creation will need to be paid via your Web 3.0 digital wallet. The fees for creating an NFT can be quite high due to the energy required, so check over the fees. Once you're happy, confirm the transaction.
The NFT will now be listed on the Rarible platform for buyers to either bid on or buy instantly.
What NFTs can you buy on Rarible?
Users can buy a range of NFTs through the Rarible platform. Let's take a look at some of the different items users can purchase.
- Digital art. Digital art has been one of the most popular pieces of content applied to the NFT space so far and makes up the largest portion of Rarible's marketplace. Real-world art is valuable when it is scarce and when you can prove ownership. Until NFTs, digital art has always been difficult to purchase and prove ownership of. One of the most prominent NFT digital art pieces sold so far has been Beeple's "Everydays: The First 5000 days" collage, which sold for $69 million in 2021.
- Memes. Memes have become a significant part of the cryptocurrency space and have easily transferred across to NFTs. CyberPunks are one such example of meme NFTs that have exploded in popularity among collectors.
- Photography. Like digital art, digital photographs lend themselves easily to the NFT space and are popular on Rarible. Users can purchase ownership of the photograph and then usually receive a high-resolution copy.
- Music. Like digital art and photography, music is another type of media that can be uploaded to Rarible and minted. Traditionally music would be streamed but NFTs allow artists to sell collectible editions of their albums and songs. Like scarce art, the collectible editions are then likely to appreciate over time.
- Games. Within Rarible there is an opportunity for gamers to purchase NFTs that relate to in-game accessories or tools. The NFT can be linked to the game in order for the user to utilise what they have just purchased. This can vary from weaponry to video game skins.
- Domains. Domains are extremely popular collectibles, with the right domain name fetching thousands of dollars. The ownership of these domains can be sold and distributed using Rarible.
- Metaverses. Metaverses are a collection of parallel digital worlds. Users can purchase NFTs on Rarible that represent a piece of this shared virtual space. The metaverse can be used to transfer digital assets from one blockchain to another.
- DeFi. If the above wasn't enough, cryptocurrency tokens from the DeFi sector can also be traded on the Rarible platform.
There are several fees that a user will incur when using the Rarible platform.
The first is a fee to open up a connection channel with Rarible. Whenever a user performs their first transaction a small connection fee will be charged by the Ethereum network. This fee does not go to Rarible. All other subsequent transactions on the Rarible platform will also incur an associated gas fee for using the Ethereum blockchain. This will vary depending on congestion levels.
Rarible charges a 2.5% transaction fee for the purchase of NFTs and also a 2.5% listing fee for the sale of NFTs. Cumulatively Rarible collects 5% of the sale price per NFT sold. The seller can take on the full 5% fee if they wish to.
Gas fees can be expensive for those creating NFTs due to the high computational power required to mint a token. Again, these vary depending on Ethereum blockchain congestion.
What can the RARI token do?
The RARI token is the native token to the Rarible platform. Launched in July 2020, it was the first governance token in the NFT space. The token has a maximum supply of 25,000,000, half of which is reserved for buyers and sellers.
The token was created to incentivise participation and to influence the development of the platform. RARI token holders get to challenge and moderate the development team, select featured artwork and vote on platform upgrades.
The RARI token can only be earned through the platform by active participation. Rarible calls this Marketplace Liquidity Mining. Every Sunday 75,000 tokens are distributed to those that either made a purchase or sale on the platform. This is set to continue for 200 weeks from 19 July 2020. Alternatively, the RARI token can also be purchased directly from some cryptocurrency exchanges.
The ultimate goal of the RARI token is to move towards a decentralised autonomous organisation (DAO). This would mean that all decisions are voted on by platform users.
Rarible vs OpenSea
OpenSea and Rarible are two competitors in the NFT marketplace sector. The key difference between Rarible and OpenSea is that whilst Rarible does not display any NFTs from other exchanges, OpenSea was designed to show NFTs from many exchanges and markets. OpenSea accommodates a cross-platform secondary market for platforms such as Rarible, Nifty and SuperRare.
Formed in 2017, OpenSea has been around much longer than Rarible and has become the primary marketplace for the sale and purchase of NFTs. Like Rarible, OpenSea allows anyone to create and sell an NFT through the site but does not yet have its own governance token, such as RARI.
Rarible is an extremely popular and user-friendly platform for the sale and purchase of NFTs. The ability to mint NFT tokens without the need for programming experience and the governance of the platform via its native RARI token is what truly sets Rarible apart.
With the development of a DAO set to launch in the future, Rarible could become one of the first truly decentralised marketplaces for NFTs.
- Users remain in complete control of their NFTs at all times.
- Instant purchase options for NFTs.
- Users can mint their own NFTs through Rarible's user-friendly interface without the need for programming experience.
- Only lists NFTs that are minted or listed on the exchange. It can not draw NFTs from other marketplaces.
- Rarible is a young project and has not yet stood the test of time.
- Only NFT tokens from the Ethereum blockchain are supported.
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