An explosion in the activity of NFTs and collectibles is brewing
The growth of crypto art has been one of the most interesting trends of 2020.
Art marketplaces such as SuperRare, KnownOrigin, and Mintbase have boomed on Ethereum, in part as a direct result of the amount of value being generated through activity on DeFi dapps.
In that context, it is perhaps fitting that Rarible, the newest art marketplace, has made its reputation by employing one key technique from the DeFi boom.
Anyone selling or buying art on Rarible also earns some of the 75,000 RARI tokens which are distributed weekly to encourage activity.
Of course, this is just another form of the asset or yield farming that was kicked off back in June with the launch of Compound’s COMP token.
The good news is it’s encouraged people to use Rarible and start collecting crypto art, resulting in Rarible quickly becoming the #1 marketplace with around 2,200 active wallets over the past week and capturing around $2 million in value.
The bad news is that it’s encouraged people to do anything to get what they consider free money. This means the quality of art on Rarible is much lower than other similar marketplaces.
So, although technically the RARI token is used as a governance token to control the direction of Rarible over the coming months and years, many people are just immediately selling it for gain.
How this rise in activity vs decline in quality will play out in terms of Rarible’s long term success we will have to see. Presumably, at some point, if it hopes to gain success, it will have to encourage users to start buying crypto art because they like it, rather than to get free tokens.
And, remember, all dapps and tokens are highly experimental so only spend value you can afford to lose if something goes wrong.