The Delphi Podcast Host and GP of Delphi Ventures Tom Shaughnessy sits down with Alex Salnikov, co-founder and CPO at Rarible, the first community-owned NFT marketplace. The two discuss open-sourcing the Rarible Protocol stack, the benefits of having marketplace features on-chain, the $RARI token distribution and much more!
- Our Video interviews Can Be Viewed Here: https://www.youtube.com/channel/UC9Yy99ZlQIX9-PdG_xHj43Q
- Access Delphi’s Research Here: https://www.delphidigital.io/
- Cosmos by From The Dust | https://soundcloud.com/ftdmusic
- Music promoted by https://www.free-stock-music.com
- Creative Commons Attribution 3.0 Unported License
(00:00:00) – Introduction.
(00:00:30) – Alex’s journey in crypto.
(00:03:05) – Rarible’s storefront vs. competitors.
(00:05:37) – The focus of Rarible’s design.
(00:07:12) – Rarible on multiple chains.
(00:08:04) – Overview of Rarible Protocol.
(00:11:59) – Rarible’s on-chain features.
(00:14:39) –The benefits of having features on-chain.
(00:18:32) – The risks for developers on closed APIs.
(00:22:53) – The reason other teams close off their indexer.
(00:23:55) – How royalties are handled on Rarible.
(00:26:17) – Alex’s thoughts on scaling Rarible.
(00:29:53) – NFTs and security on layer-2s.
(00:32:08) – Projects using Rarible Protocol to build.
(00:36:28) – The $RARI token.
(00:39:11) – Alex’s thoughts on Rarible being completely decentralized.
(00:40:45) – What the team did well/poorly with the $RARI token drop.
(00:43:00) – NFT projects that Alex is excited about.
(00:43:51) – What Alex would say to NFT bears.
Hey everyone, welcome back to the podcast today, I’m thrilled to continue our NFT coverage we’ve had on most of the top leaders in space. Now we have one more. Today I’m thrilled to have on Alex, who is the co founder and chief product officer at Wearable Alex, how’s it going?
Hey, Tom, thank you for having me here today. I’m excited.
Yeah, likewise, Wearables and cornerstone in the space So let’s learn more. But first, Alex, tell us a bit about yourself how you got started in crypto.
It’s actually a really interesting story, so I’ve probably told it 1000 times already, but obviously, I want to tell you once again. To me, it feels like I always was in crypto, because that was literally the first area that I started working in. I launched my first project into Crypto, that was Fiat on Ramp and off Ramp to the space, just locally in my own country. And since then, never left the space basically, I got into the space in 2012, pretty early, back then you couldn’t do much except for, buy and sell Bitcoin. That’s why we were doing trading. Yep. So Fiat on ramp was amazing then moved on to build the centralized exchange with order books, short sales, leverages, all sorts of financial crazy. We’ll do stuff, I really love the experience.We spend a lot of time building that, by the time we rolled this out on the market, everyone was far ahead of us. But the experience was incredible. We assembled a great team during working on that one. And I said that once again, but it’s really funny that I actually earned all my money already in Crypto. So, like a first class citizen, I was broken for and basically, the blockchain is my whole economy that they have for me.
That’s awesome. You’re fully crypto native at this point.
Yeah, and I love it.
That’s incredible.[crosstalk 00:02:22]
I live the life of digital nomads these days, about for 1.5 years. And I think I really love this period of being free. Your money like travel with you, whenever, wherever you are, nobody can stop you, you’re really free in terms of the physical world, you almost don’t have any physical things to own. You have only like, a suit with you. And, and the whole thing in the whole bunch of things that you own are all digital.
No, I’m with you, I’m not fully Crypto yet, I sold my bank account, but I’m getting there. But Alex when switching to Wearable, you guys have two things going on, you have a storefront but you also have the protocol. Let’s talk a bit about the storefront. When people come to Wearable dot com to buy NFT’s to sell, what is the differentiating factor versus, super rare versus open seas. What’s the difference in experience that people get on Wearable?
Yeah, it’s a great question. So first of all, when we launched variable, our motto was, “we are crypto native people. And we want to give everyone the ability to participate in this market.” Because back then, there was no issuance platforms that were gate less. Every issuance platform like SuperRare, or Makers Place, some of them are still invite only. And that was the market condition back then. So literally, if you’re just an open creator, you want to make your first NFT, there was nowhere to go. And the launch variable for everybody, and that was a really important differentiator in terms of that on the world should be permission less want if you want everyone to put some effort into doing something. And since then, the second big factor that we worked on was that we wanted it to be easy, a sleek and fun. So our head of design is from Russian big tech company, Yandex. He launched products for tens of millions of people then he’s a UI guru. And that’s our product culture. Actually, every time we’re discussing where to put that button. Imagine that I have never seen the crypto website before, I didn’t know what the Wallet is, I don’t know what I should click but I know what signing, for example means. And intuitively I’m looking on the website some things that they already know. And we try to digest the difficult Crypto native experiences into the same knowledge that user already has to make it accessible, to make it intuitive. And that’s why a lot of newcomers love Variable and still love, but they are not newcomers anymore. Since we launched the governance token, they created Uni Swap pools and started doing governance, the learning curve was just crazy.
No, I’m with you, it seems like if I pull up the site, and I’ve never been to Variable dot com before, it seems like you guys have, everything here is animating, I know we’re on an audio podcast for those that are watching the video. But everything’s animated, everything’s moving, you have flashing lights on the auction times left, it seems like it’s a very different feel than what you get from other marketplaces. So I feel like you have a niche there. I’m not totally sure if that was the goal, or that’s kind of what was just figured out over time, though. What are your thoughts there?
That’s exactly the goal. Basically, we are optimizing for look and feel and fun. At some point, they had engineering problem, because it’s actually costs quite a lot of resources to support all these animated things. And at some point, we were making this tough decision, okay, let’s make things not animated. And, and the website became completely boring. So it’s actually like really built into experience, where you can animate your avatar, you can animate your cover, on your profile picture, obviously, every NFT like half of the NFT’s are animated. So it’s just, it’s really suited for this new generation of visual based people who love to see, operate in a fast moving environment like Twitter, you have constantly news. So over a year, it’s as the culture that is really growing these days.
Is Variable dot com totally focused on a theorem or do you unlock or lock people to trade MTs on other chains like say Solana and Tezos, and others?
Right now we’re very wholly focused on the theorem and right now while we talk behind the scenes there is hard work, its going on to enable Flow Blockchain and Polygon Blockchain and then other Blockchain as well. So the future is definitely multi chain. And that’s another super difficult question of how do we make the person who came the first time to the website understand what’s going on? Okay, I came here and there is Flow, Polygon a theorem, I need to choose something that are gas prices that are unsafe like uh-Oh,
it’s making your job more complicated, but I guess it’s unlocking new communities, which is good.
And Alex, switching over to the Wearable protocol, you have your marketplace which is Wearable dot com, people could come, they could interact, they can buy and sell NFT’s through the experience you guys offer. But I think one of the more interesting things is the variable protocol itself. So you guys allow people to create their own NFT experiences using an open protocol, which is unlike other I mean, it’s not like other marketplaces, because it’s a protocol. What exactly is the cell? And if you could describe a bit about the protocol be really helpful.
Yeah, sure, I’d like to take a step back here. [inaudible 00:08:40] About a year ago, in July, we launched the governance token, to decentralize the variable experience. And since then, over a year, we actually learned a lot. And one of the unexpected things to learn was that it’s really hard to participate in governance, especially for newcomers, for creators. It’s almost like this two different mindsets. One of them is yes, they want an open protocol, I want to have everything open source, I want to have maybe unperfect front end, but I want to know that this is permission less. This runs on IPFs Files. I know that like this team can do nothing to stop me from doing anything. So two different mentalities with having a really strong UI UX. That’s why basically, we created, we sorted through and created this unique combination, not exactly unique, but the combination of a protocol and apps that are running on top of that the front ends. So the protocol is essentially the whole thing that is running Wearable dot com marketplace, the backbone behind Wearable dot com marketplace.We separated that into the separate product and made it available for everyone. So It’s an open source set of smart contracts then minting issuance, smart contracts exchange smart contract, royalties smart contracts, the external registry that you can put your royalties in and share the across the whole blockchain. And the very important piece on top is the indexing solution. The indexer, the back end that listens to what happens in the blockchain and records every detail about NFT, for example, I want to know which NFT’s belong to the wallet, both to the specific wallet or reach NFT’s in the specific collection, they belong to a specific wallet, I want to know the provenance of this energy, like when it was born, when it was sold the first time when it was sold the second time, what happened after that? And you can’t just create a blockchain for that you can’t call a smart contract and ask, “What is the history of that NFT?” So you need an indexing tool. And we have the first on the market indexing that is open source and completely open. Right now there is no like if you’re building a wallet or website, NFT experience you need an indexer there’s now an open tool for that. There is a DAO on top to govern that. So basically, the whole stack that you expect to see in the protocol, open source governed by the DAO permission lesson open. And this is the foundational infrastructure for the NFT world. Basically, every energy project that is being built, that wants to trade NFT’s they need this toolkit. We’ve built it over two years in Wearable and then spent six months to separate from the main project. So it’s a lot to have.
No, offering your full stack to the community is super interesting. I have a lot of questions here. When you look at someone like an open see what products or features that they offer is a fully unchained for people to copy and use, I’m assuming part of their stack is on chain for people to view. But from what you’re describing, people could plug and play with your contracts to basically build their own, I guess marketplaces or basically offer so you’re minting services within a game or something like that. I guess, for those new to the space, what does Wearable offer that the other marketplaces don’t exactly have on chain or to use and I know you mentioned a few, but it would be nice to compare it to open sea or somebody that people know well as well.
Yeah. So there are several marketplaces and that more or less, all of them are set up the same way. So you have an on chain smart contract, which handles execution of trades. What that means is that there is an order that I want to sell an NFT in, there is an order that they want to buy an NFT all this sort of chain and on chain is basically this small really small permission less thing that makes the swap just changes like I have money you have enough cheese Let’s Let’s exchange that. It doesn’t handle auction, it’s all handled separately, the only on-chain things it makes sure that me as the marketplace, me as the platform, I cannot touch your funds, the funds are swapped directly on chain, everything else happens off chain. This is the way most of the marketplace work. There is a couple solutions like okay, let’s have a smart contract that would have an on chain order book as well. So it stores order on chain as well. And, there are on chain auction options too. So for some marketplaces use on chain auction system, when I place a bid, there is the full logic that the next bid should release the previous bid. And then the winner takes the NFT it also is usually on chain. Except for that, usually nothing else is on chain. Well I don’t know a project that that has more on chain indexer cannot be put on chain in the theorem world. So people use either the graph to index all the data, or they use or they use basically self service solutions or closed API’s by some other people. Sometimes it puts businesses at the great dependency, I’d say.
So playing devil’s advocate, I mean, what are the benefits of having everything on chain for a marketplace at a protocol? What do you benefit from that? Say a centralized provider of a marketplace fails that and I guess there’s some benefits for centralized right? Like you can make decisions fast you, can maybe do an order book in a very fast way, and in a very cheap way, but what are the specific benefits of having all this on chain?
Just to confirm it at Wearable protocol also uses order book of chain. But it is stored in this protocol, which is open, it’s still off chain, but you can have your own version of that.
Got it? That’s helpful.
Yeah, and answering your question, we’re actually moving to this more on chain we’re bringing order book on chain to because it actually misses one really critical thing. So I would explain that in the example of D File let’s say, in the D file, you can build a yarn, which can form some money on another contract, then go to Uni Swap exchange that and then pull that funds and then use a flash loan to do that several times in a row to extract value. All of that is done on chain in one contract that calls other contracts. And this is the key component that is missing if you have anything off chain because if you have at least something off chain, that means that other contracts can’t call your own contract. It’s really basically breaks this Lego experience apart. That’s why Party Bit is an on chain tool that allows you to crowdfund money, to make one single bid on an item and then basically spawn up a DAO that owns this item if you won an auction. That is only possible with the projects that have on chain auctions. That’s just one example.
No. That’s a great example. Now, it’s clear that it should be on chain and also you just get a level of transparency for the community, right? Like everyone knows what’s going on. Right? There’s no front running, there’s no messing around.
Exactly. Well, transparency for the community is really important. But I think what’s mostly important is the guarantees for developers that this API won’t become paid at one point, that there won’t be rate limiting enabled at some point, that if anything happens, you can spawn up your own service.[crosstalk 00:17:26]
that’s a really important.[crosstalk 00:17:28] That’s incredible. I mean, that’s like Facebook, like boxing out builders or developers or something like that and just casting their wand.
There is an interesting story about that actually, one of my friends and previous colleague, they run a flash website on top of the Facebook in the times when that was popular. And they got pushed out by Facebook out of the platform basically prohibited. Facebook banned them prohibited the whole segment. And they said, “Oh, yeah. Well, we’ll have to build our own website.” So they did, they went and build their own website. And it became like massively successful, like 100 times more users than they had on the app. And they were like, “Uh-oh, that that was the right decision. Thank you Facebook.”
Oh, mad at first, I’m sure they were kind of distraught, though, to lose their business. And then bam, they grow up and they get something way bigger.
Exactly. That’s the idea. The developers are at the core of this revolution. We want to do everything for them.
Alex, what would be an example of messing with the developers on a closed API? Would this be like, if a marketplace built on you guys, or if the game built on you guys use your minting contract, and you guys ended up changing that in some respect to charging a fee? What exactly is permission less that you can change for these guys that other people can’t? And I think it’s incredible that developers have this clear line of sight that they won’t be messed with, but I’m just trying to get a sense of what exactly that means for them.
Yeah, well, obviously everything that is already on chain that we discussed, it’s minting contract, it’s exchange contract, it’s royalty contract, they have governance. So there are some tweak able things like phase or we can sub set up a role just for somebody else who is not an owner of its own contract for some reason. So there is some level of governance. And the big idea for that is okay, we know what to do is that we put that into the DAO and DAO needs to vote to change that. That puts some level of offshore to the developer that uses the contract, that’s fine. So now, everything that works on top, the indexing part, is actually I know, like 99% of the code that we have in the protocol. It’s really huge, we need to track the blockchain, we need to understand that this block happens after the next block, there are some orphan block, we need to discard those transactions. The NFT was created and you need to do that in a scalable manner. You need to sometimes to go back in time and to re index something, it’s a really complex product. And this one is essential, like if your user comes to the website or in the wallet, and they asked like, which NFT’s does my wallet earn, you need to go to the indexer. And you need to find an answer to that. And then they say, “Okay, now I want to sell this one out of 10 that I own.” So basically, this whole interaction, this whole marketplace experience, the whole NFT experience of having a lot of NFT’s in your wallet, it’s all run by this indexing tool. And this indexing tool is what is closed and every other realm right now on the market. So if you build, for example, like trust wallet, or rainbow wallet, they rely on centralized API, if this API closed, you don’t have the ability to share NFT’s in your wallet anymore. So this would be the way to mess up with developers. Of course, probably the idea would be that it won’t go away. But it will become to cost 10k or 20k at some point. So you need to pay.
Now I’m glad we’re talking about it. I didn’t know the indexer was that much of the code and that much of the cell here. So if I understand this correctly, the indexer allows, it enables anyone to index NFT’s access the information, so like metadata, orders, activity, ranking, leaderboard, stuff like that, you guys are offering it for free to the developers to build on that that makes a ton of sense. For Wearable protocol, What is the benefit for I guess maybe it’s the token holders like is there a cost using Nexus? Or is it more so let’s give this away so that people build on our protocol so that we can then therein drive fees later on?
Yes, exactly. You totally get it. So indexing is for free it’s open source, it doesn’t cost anything to use it. But the idea is that the whole package, it’s easy to use the whole package, so create NFTs inside variable contracts, and trade NFTs inside variable exchange. And I think the best part, the overlooked part of that is that everybody who uses the protocol, they have an access to the short order book. So once you created a sell order on your website, on your front end, it gets automatically on variable on every other apps that use the protocol. So basically, all the projects together using the protocol, they create a network effect with each other they support every new projects, add support for the other projects in the system.
this is where all the value originates.
No, that’s awesome. And why is it closed off on other? Why do other companies close off their indexer? I don’t get it. Is it faster to run it? Not open source? Not on chain? Or, Yeah, it might be confusing something there.
Yeah, I think it’s not that they deliberately do that, deliberate move is to open that up, because at first you build something up for you for yourself, and you run it for yourself, right? And that’s how it happens. organically just you don’t do anything, and that’s why it’s closed. And then you need to make this extra effort to open things up to give it to the community, you open yourself at some competitive edge, someone might build just a competitor to you on your open platform. We all seen the Uni swap battle, but you open yourself up for the basically greater costs of the trust to the whole ecosystem.[crosstalk 00:23:51] And yet,
Mercia, that’s, that’s awesome. I didn’t know that was a big part of the cell. I mean, just going into other parts of your protocol you offer developers, there’s a lot that you offer. One of the interesting ones to me is just the royalty standard. So I mean, allowing artists and creatives the ability to get ongoing royalties forever is huge. For their longevity to pay their bills, but also I guess they focus more on quality versus quantity. How do you guys handle royalties? Is it built into the contract itself? Or does it just happen on the end marketplace? Where does that switch off happen?
Long story short, it’s built directly into the marketplace, directly into the contract. And there are several ways to build that in. The first one is when you issue your token, you can build in the information about this role just directly in the token. So everybody would know that this token should have this amount of royalties in it. And then other contracts, other exchange contracts can decide whether they want to respect that or not. So their reading contract, they know that they need to pay 5% then they either do Or they don’t. And then basically variable exchange contract is built that way to respect the known royalty standards. We went one step ahead of that and we created the royalty registry contract one more contract that any owner of any collection, can go to that contract and say, “Okay, I didn’t have royalties built in my NFT. But I do want to receive them, because I’m the owner of the project, I can go to other marketplaces, and I can ask them directly, but they want to do that on chain.” So they can go on chain, and they can set up royalties for their own contract and do that only once. So as they do it once they can’t change it so they can’t say that it’s 10 but tomorrow it’s 50. So external contracts accessible by everyone. So basically, other marketplaces can respect that, too. It is the single source of truth for all the other royalties that are set up in the place.
Now that’s incredible, it makes a lot of sense, especially that you have a standard that people kind of adhere to and royalties are pass on the original creator, it makes a lot of sense. My other question for you is just on, I guess, the scaling aspect. I’m not sure where L2s kind of play into this, where exactly does the L2 aspects happen within the protocol? Because I’m, I’m getting a little confused on the protocol versus the end marketplaces, people create, I’m not sure where the L2s plugs in here.
Yeah. So the marketplace, the front end, the mental model is exactly like Junior swap, for example, you have a protocol that does this exchange, Indexer is the part of protocol, and then there is front end that just calls the API’s and supplies the relevant information to the user. So that implies that all the Layer Two happens on the protocol level as well. So right now we just deploy it on polygon, I think in a matter of days, the news should break. So protocol should be available on polygon as the next thing would be Flow to be available and protocol tool. So and then on variable marketplace. We basically built all the cool things at first on the protocol and then adopted by the front end.
Now that that makes sense. So I guess in that regard, so you’d be on multiple L Ones and multiple L2s is that fair? I’m wondering how that would work?
Yes, this is how it looked like this, the blockchain will work long term. We see this, like a couple years ago, we had only theorem. And there was this notion that okay, everything will be on the theorem and nowhere else probably, some ideas was like that. And now we see multiple tools and L Ones, gaining different amounts of traction, but it’s nonzero amount of traction. So basically, some of them are really great. For example, Solano, we’ve seen this incredible rise polka dot is coming. And if you’re probably the cutting edge that we see these days, is the hop exchange and context protocol, the things that allow you to move your items cross L2, this is where it gets really incredible. So I can move my item from Polygon to Phantom for free, without touching the layer one ever again. It’s just, I don’t know, it blows my mind when I think of what can happen to the blockchain when we’ll have massive interconnection of L2s. And you can move things between L2s. And the theorem was just the security level that really keeps all the things glued together in the long run. But everything is for free, abstracted away from the user, you don’t even know which L2 you’re working from. When you click Buy, your fonts are automatically transferred from 102 to another and your asset is bought and might transferred back to you. So the whole EDM world can be connected to each other and abstracted away from the user. I won’t say like, if you’re working with a theorem and flow, you need two different wallets. But if you need only one wallet, this EDM Zero X all the addresses that we get used to, it can be abstracted away from the user.
No, that’s super interesting. And I mean on that point, what’s your take on NFT’s existing on different L2s, I guess My take is, I think the large owners of the rarest NFT’s are always going to want them to exist on each space chain, but was wondering your take there, it’s kind of weird like you’re also seeing artists do art blocks drops or do drops on a theorem, but then go to chains like salon or others Tezos, whatever, or what have you, and also do drops there. So it’s kind of a weird dichotomy. But I was wondering your take on security, and if people will actually want to hold their NF T’s on L2s?
Yeah, well, for the theorem, I think this particular conversation is really well had by the D5 community, they operate on millions of dollars, hundreds of millions of dollars in single transactions, and they care about security a lot. So NFT is far less dependent on security on that end. And that’s why it’s much easier for people just to go to L2 and say, “oh, okay, I’ll be here. That’s, all fine.” And what they do then is, like the way I imagined it will work. So for example, a new game launches on polygon, there is thousands of cheap tokens, and then one of them becomes so rare, and it started to cost a million dollar. Do you move it over across the pressure theorem, and you have it on a theorem with the much more security? So basically, this is like a tiered security payment, like a production I go to the insurance website, and they can choose, tier one, tier two, tier three.
Yeah, no, I’m with you. It’s, interesting. I think we’re a ways out from people being comfortable. I mean, technically are ways off from the implementation. But I think it’s gonna take a while for people to get comfortable with keeping rare NFT’s on L2, but on the flip side, given it’s so cheap to mint there, there might just be a proliferation of larger quantity of cheaper NFT’s that are just released there, if that makes sense.
Exactly. Yeah. I expect a lot of NFT’s to be born on L2, and then move to theorem.
Yeah, once they get valuable, you move them back two, you sell one. And I’d love to just close out this conversation or just this discussion point. We’ve been talking a lot about how developers can use the variable protocol to launch their own experiences during marketplaces. Can you give us a few other examples of projects using your protocol today and what they’re doing with it?
Yes. So it’s interesting, the most successful feature of the protocol to date is lazy minting, actually, that you can really spin up and your NFT experience when creators will be able to create their NF T’s for free. So one of the one of the cool projects that are working on top of the protocol is cocoa NFT. They allow you to connect your Instagram to meta mask and mint any of your Instagram posters NFT so that’s really like clean and nice project. zerion guys use our API to query metadata basically indexing solution for their NFT extension of their portfolio tracking app. On cyber is the gallery, 3G gallery that uses protocol to query NFTs and display inside the 3G Gallery. And I think the most technically complex project so far is mean T dot F is the project that allows you to spawn up your DOA that it can hold buy and sell NFT, basically creator collectives and all things like that and they made it in a clear way that it can interact on chain with the variable protocol. So basically you can now have like creator fund that that creates some item, sells it and then manages the funds or collector fund the DAO and NFT art index, all set of DAO tools that you can imagine able to hold, buy and sell NFT’s
That’s awesome. There’s clearly a lot of projects using your protocol already on cyber super interesting. I had Vaughn Miss on, to talk about his collection on the NFT series and we were on his on cyber gallery, I hope I’m not confusing it and we were looking around and it was really, it was a great experience. I mean it was so loaded in two seconds or a second you can walk around see all This art it’s awesome. What exactly is on cyber using that Wearable provides?
Yeah, basically they the want to build in the integration to be able to buy and sell directly from the gallery. So you go to the gallery, you see an item, you click Buy it, and that’s it.
That’s pretty cool. And someone on cyber, do they have other options to do that with other providers? Is there anything public that they can use or would they have to build it from the ground up?
Well, I think, again, they can technically use open sea API. Not sure how easy that is. But but you can do that. And then yes, it’s the same argument about how open that is. But you can technically do that. Yes. And variable protocol. Another way would be just to build it ground up.
I could see why they would want to use you guys. I mean, it’s a community owned API, it’s probably easier to integrate. And then to they don’t have to build it from the ground up, but it definitely makes sense. [crosstalk 00:35:42] I guess I’m selling you guys now. Thank you. Yeah, no, it’s interesting to see who’s using you guys and why. It’s kind of interesting, I mean, it’s kind of sounds like the end protocols that might end up using guys, maybe large holders of your token just to take part in the community at this point.
Yeah, we’re running an app mining program. So if you generate some volume on the protocol, you actually receive the governance over that over time. So that would be like especially important for us to help our users to govern the platform. And of course, yes, there is a DAO with it and discord a ton of activity. A long road ahead, though, it’s not perfect yet.
No, I totally get it. And we’d be remiss not to close out our conversation with the talk about the RARI token, I’d love to kind of dive into what exactly the RARI token does. And I guess what’s its impact on your community? Because it sounds like when we opened up the conversation that you did bring on a new class of kind of community holder that was interested in the token and kind of promoting the project.
Yes, that was massive success when we launched the variable token a year ago, basically, we pioneered with the liquidity mining program for marketplaces. So it’s the cold start problem on the marketplace, you don’t have you don’t have supply. That’s why demand don’t come to you, you don’t have a demand. That’s why supply don’t come to you. And the way to bootstrap the process to get the world going, is to incentivize people to do that. And we launched liquidity mining program, liquidity on the marketplace is amount of supply and demand that’s why we started rewarding suppliers and demanders was the RARI token. At some point, the items were basically for free on the marketplace. So you could pick anything and get more tokens for it, then the actual purchase. And with time that diminishes but basically, community becomes the co-owners and get really attached to the project and get promoted. It’s really hard to decentralized over time when if you started as the coast company, as we did. So we have this ongoing process, there is understanding that in four years, we will distribute RARI token. So, that community will have more than the team. And that’s basically our process of decentralizing. Over time, we need to raise the generation of people who are willing to govern the protocol, who understand how exchanges work, how this fee policy should be set up. And we also wants to take into account all the people on variable marketplace that don’t want to do that, and create a delegation program for them so they can pick a representative who will protect their needs. On the protocol level. That’s the long road that we have right now. And then we’re like switching all the smart contracts to be governed by the DAO, and maybe the DAO then introduces fees and makes the economy complete.
It’s a question for every project going through like progressive decentralization, but I’d love to get your take on it. Do you envision a date in the future when you can say, “Core team is no longer guiding the ship” Right? Like the community has taken over Like there’s a clear cut. Do you think that will happen In reality? I feel like it’s always the goal of projects, but I feel like it’s very hard to achieve.
It’s very hard to achieve. If you’ve built your governance system the right way, then technically once you have less tokens than the community, then the community took over. And then the only question is, how active is that community? If there are really the leaders in the community that can manage the large teams, that can bring vision of the protocol to move forward and basically can elect representative, can be on the board of the protocol. Those are, to me, are kind of unanswered questions. Right now. There are some protocols that originated this way that had this community from Day Zero, like Social Swap, for example, their founder just said that he’s stepping aside to be the advisor. And the activeness of the community would be the ultimate answer on the viability of the protocols. This is the most interesting question and exciting journey in the several, three, five years in crypto.
No, I like that and I mean on the RARI token what’s the thing that you guys feel that you absolutely nailed with it, and I’d be interested to learn what you think you could have done better with the drop. And I don’t have any ideas of myself if you guys are right or wrong. So I would love to kind of get your take on it.
that’s really great way to put it. I think what we absolutely nailed was attempt to market. RARI token might be among my first five created mining programs on the theorem and this is really important. Because after that, we had 200 projects doing the same thing. What could we have done better? Skill the team a little bit earlier on the DAO side. We’re actively doing that now and recruiting more people in the community to do. But basically, in the Autumn last year there was a great momentum for the decentralization and we were just over booked with all things going on, concentrated on keeping the reliability of the app that we had and slip through some really important discussions and conversions on the DAO side. And now we need to relaunch the DAO basically from scratch to get all those people back.
On the, I guess on the Liquidity mining side you guys were one of the first. Maybe one of the first for the NFT side or what would be the timing there?
Well, the era of Liquidity mining programs really started in May, early June when Compound did it, that was the first project that did it and we ran July 13th, basically in the months from that. Between that was probably five projects that were able to do that.
oh, got it, I didn’t know your liquidity went front and back that far. I thought it was more recent. Makes sense. Got it, that’s interesting. And Alex, just to close out with some fun stuff, is there any specific creator honorable right now that you’re pretty excited about? Any specific drop? Anything cool that you’re looking at?
I think our core community, I’m absolutely in love with all the thing that Lerona does and Kid eight that recently launched his generative collection of devils. The really funny kids. Dust monkey, really great job and I think you can kind of hear the trend here, it’s all avatars. Some characters that are really funny and attaching and I think this is a really important movement in the NFT, just emotional attachment, a lot to have.
Alex, to close out what would you say to the bares or the critics that don’t understand pure NFT art, pure generative art, there’s a lot of people that point to it and say, ” Oh, I’m not a collector, I’m not an artist. How would I know?” They prefer things that have NFT utilities you can battle with, you can try to yield on, stuff like that. What would you say to people like that, that don’t totally understand kind of the art side of things.
I would say that you are not any right so basically, the world is moving, people spend seven hours a day on their mobile phone. The younger generation. They basically have more life in the digital space than in physical. And all the digital things are inseparable they are even more real for them and might be for me too. That’s why it doesn’t matter if you have a digital thing or a real thing. And digital things, they should have utilities too. And art has its own utility, you’re either a collector or you want to use a dozen asset class R2 is known to be an asset class in the real world. And for the things that will have utility, it’s just the next step actually in the NFT. This is where we massively go in the packs drops lots boards when you used one item to make another item. Or mutate your ape or use it in a game, or have some key alternate. This is the method we’re going to. So art is just the first entry step into it because it was one of the first things to put on chain. It’s the easiest thing to put on chain but what we will see, completely auctionable really depository items.
I love that. Alex, it’s incredible having you on man. For those that don’t know Wearable, definitely recommend people check it out. You guys have a really interesting story that understanding the protocol side and why developers would want to use the tools that you’ve open sourced versus building it from the ground up. Or using competitors that’s not community owned is super interesting and one of my favorites of the discussion. So Alex, thank you so much for coming on today.
Thank you Tom. A lot of interesting questions. I loved the discussion and thank you for inviting me over.
Always, yeah. Definitely do it again soon.