In this episode, Ben, research analyst at CoinGecko is joined by Alex Salnikov, Co-founder of Rarible. Alex gives us an insight into the world of Rarible and how it uniquely differentiates itself from other NFT marketplaces in this booming NFT space!
[00:01:44] Alex’s background and his favourite NFT(s)
[00:03:47] What is Rarible?
[00:12:10] Rarible’s differentiation to other NFT marketplaces
[00:14:25] The motive behind decentralizing Rarible through governance tokens
[00:18:47] How is the Rarible community different from other communities?
[00:20:42] Minting directly from marketplace contracts vs self-created contracts
[00:22:38] Thoughts on the current state of infrastructure for buying and selling NFTs
[00:24:45] What's the most essential feature that's missing from the NFT marketplace?
[00:26:00] Rarible’s plans for 2022 onwards
Quotes from the episode:
“The state of the industry is quite peculiar these days. I think the industry grown very, very fast.” [00:22:50]
“So we'll see how this NFTs penetrate, like basically every part of the media industry I would say.” [00:24:32]
Watch the Podcast on YouTube
Rarible - https://www.rarible.com/
CoinGecko - https://www.coingecko.com/
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Hello everybody. My name is Ben and I will be hosting today's podcast session as usual. Today we have a very special guest. His name is Alex Salnikov. He is the head of product and co-founder He has been an active developer in the crypto space since 2012, and Alex is also previously served as the chief technology officer of CoinOffering, the first company to actually offer the shares in the form of blockchain assets. And today we're going to talk a little bit about Rarible and their upcoming developments for the NFT marketplace, and that's kind of in, what's coming up. So welcome to the podcast Alex.
Alex Salnikov [00:01:21]:
Thank you, Ben. Thank you for having me here today. I'm so excited to talk through all sorts of things today.
Yeah. Yeah. Yeah. Welcome. So now that you're on, right. There's this thing that I like to do with our NFT speakers beforehand, you know, before we start talking about Rarible and everything, I always like to ask, tell us about yourself, and what would you say is your favorite NFT.
Alex Salnikov [00:01:44]:
Yeah above myself. It's really hard to talk about myself. I think I completely blended with my project identity. So I fully associate myself with just the head of product deferrable and that's most part of my life. And the overall, I think just the digital geek I live a nomadic life from traveling from here to there and enjoy all the things digital. I think digital products and services and companies made my life so much better. So I'm a true believer in, in the digitalization of everything. I think NFT is this forefront of digitalization of intellectual property rights. So that's, that's why I'm here. My favorite NFTs would probably be stuff from individual creators that are present in Rarible. I don't know if you, if you know those names she made on this amazing collection boys the dolls like the boy dolls from, from different like materials wooden glasses and stuff like that. Yeah. If seen that Dust Monkey again, individual creator, who creates characters that are this cute little guys. He just released a new version of sitting guys before that, and there were standing so, and the Dust Monkey, the kid ate who releases again, characters. Again, he's doing this, this little guys who are almost like this gangster kids. So I love those guys. Well, the, the NFTs are about communities, so I must have loved communities rather than specific art.
I completely understand. I love NFTs as well, so I totally get that, you know, it's more about the community than some, sometimes more about the community than the art itself. And it's always the best that spoke. All right then, you know, so we, we kind of got hints already. Well, what are we going to talk about? Which is essentially Rarible. And like I said before, it is an NFT marketplace, but you know, that's a very simple statement. Can you just share a little bit more, what Rarible is?
Alex Salnikov [00:03:47]:
Rarible is a lot of things now. So two years ago, a little bit more than two years ago, I need to update that number. So it's like 2.1 years ago. Two years in one month really. Forgot to celebrate our two years birthday. Oh my. So...
Alex Salnikov [00:04:05]:
Two years ago, we pioneered the, the permissionless minting and the marketplace. So back then you couldn't create NFTs if you just wanted to create NFTs. So there were like more or less two options. If you wanted to create an NFT, the first one you deploy the contract yourself, you host images on IPFS yourself, and you, you need, the team may be an engineer to, to do all and to produce a collection of NFTs. And the second option was to use one of the curated platforms that allowed you to mint, that everyone and required to pass the verification until you actually can become until you actually can begin minting. We went ahead and thought, like, why don't we allow anyone to do it actually, because in the, in this world in that three world, it's not something common to ask somebody's permission to mint something. So we just created a simple page, like, okay log in here, connect your wallet, not even log in, connect your wallet and upload your assets to the blockchain, make a name to it and put it for sale for a specific price, just the plain sale and hit the create button. And that would be it. So again, pioneer does this open minting platform for everyone, and they're very simple marketplace like just listed for sale. And that said, and then gradually we evolved into the full feature marketplace was all sorts of things like leaderboards for collections, leaderboards for buyers, sellers, hot collections. Filter is by price, by traits, ability to refresh your metadata. So like just the full featured marketplace that you would expect it to be. The double down on secondary marketplace, secondary market for the collections. Right now, I just recently checked the data. For the December, the amount of NFTs traded that were minted on Rarible accounts for 40%. And for the NFTs that are not minted in Rarible, just the secondary market for all the other NFTs is 60%. So we are effectively like outgrown this minting thing, but of course we will, if we embrace the minting capabilities, one of the unique features would be ability to mint editions. It's not something common for you to mint editions, we support NFT- 1155 aerosol 1155 standard to mint editions. And the customer royalties is to set up the customer royalties like 10, 15, 50, even percent. So again started as a minting platform, evolved into the full feature marketplace, and then there was like this big move. And we took the infrastructure behind the marketplace. So the marketplace works, utilizes smart contracts and indexing service that allows you to understand what happened with these NFTs. So we took that infrastructure and we create a separate product out of that infrastructure. So anybody else can create their own NFT experience, their own NFT marketplace or their own NFT feature inside their own wallet. So it's basically the product line that they have actually follows the journey of the user in the NFT space. At first, they discovered the space and they are either buying something or create their first NFTs. Then they move on to create their own first project. Okay. Now, now the person created the full featured collection and they use Rarible for secondary market and then they go and create their own marketplace for their own collection that became very successful. So this is the whole product line that we have. Sorry. That was a long answer to the question. What is Rarible now? It's an minting platform marketplace and the protocol.
I mean, yeah, no worries. It's, it's perfectly fine to explain the evolution of a Rarible, right? Because it's so much more than just a marketplace, like you mentioned. It's all those features as well. And you know, we talked a lot about w where Rarible came from, right? But recently there's been of developments for Rarible as a marketplace as well. For example cross chain into Tezos was one. And from what I've understand, there's also some additional features for the mobile version. Could you elaborate on these?
Alex Salnikov [00:08:09]:
Yes. So I think that's the big part of the Rarible journey in 2021. In the beginning of 2021, we had on the one team, we had only one product team that was doing everything. And the whole 2020 belief is that one team. So we scaled the team very rapidly and very successfully into like five, six product teams and the amount of things that we can do now is actually like much, much bigger. And what you can see now, the second part of the year is the result of the hard work of scaling the team. So we were actually rolled out a lot of things. First we hit the bare minimum of features that you would expect from the marketplace, the four trading collectibles it's filters by trade it's auctions, it's ability to understand statistics of the collection. You can see charts, you can see numbers. How many individual owners there is? What is the highest sale? You can even filter the chart of what's, the historical floor price for only golden apes, let's say so you can feel there that double-down on the marketplace. Yes. Features for trading collectibles, that was very important for us. Also launched messenger, messenger as internal part of the marketplace for first as the widget. But the ambition for the messenger is actually a much, much bigger because there is no way to send a message to a random Ethereum address right now. And on Ethereum, the messenger is multichain. So a lot of people use their wallet as identity. But there was no way to communicate, the big ambition for messenger. And of course, as you mentioned, the multi chain. So the first chain, the first additional chain that we added was flow and with the collections, like CNN, Evolution, Also GP. And the second one was the Tezos, which I think was extremely well made by the community. A lot of individual artists that I told you about previously that they are like my favorite NFT guys. They used Tezos, they migrated to Tezos when Ethereum gas prices begin to rise. Also all this narrative about clean NFTs. Yes, because a lot of people who came to the NFT space they're actually were, were upset about the new technology, not being aligned with the latest society developments. We're all talking about climate change and sustainability. Yeah, it feels a bit weird when the newest technology that we have is not aligned with that ethos.
Alex Salnikov [00:10:47]:
Well, arguably NFTs are arguable as safe on Ethereum for the environment because Ethereum is going to upgrade. Ethereum is going to use proof of stake and on this like tiny, a period of several years that who we have right now, it's not, it's not so bad for the environment, but of course, like for when we talk about Tezos, it's almost like zero carbon footprint for, for energies because no mining involved in the proof of stake technology. So lower fee is clean. NFT is faster transactions, and this is the next generation of blockchains or Tezos is a sharp example of that. That's why, that's why we chose Tezos as the second chain. So, and going further, we will add much more, many more.
Yeah. Yeah. I mean, I completely get you know, I, I can really like the messenger product because I think what the biggest issues like you mentioned is so hard to discuss with anonymous people, right? So you want the ability to be able to negotiate on your products on your collectibles? Being able to talk it out is a lot more cogent, right? It's better than chatting on Discord.
Alex Salnikov [00:11:55]:
It's definitely better. Yes.
Okay. You know, so we kind of got a lot of hints about where Rarible is heading, right? And there are a lot of other NFT marketplaces, obviously everyone knows OpenSea, which is still the biggest. And if you count my trading volume, you know, I do want to ask, what separates Rarible from other platforms like OpenSea and SuperRare, the sector?
Alex Salnikov [00:12:18]:
There are a lot of NFT platforms right now. And if you try to draw a map of all the projects, so there will be a lot of projects that are closed, that are curated. Let's say like SuperRare and Nifty Gateway and other people who actually check, like who is allowed to issue assets. And there are open platforms, like, like OpenSea or Rarible. And Rarible is like on this scale, Rarible is an open platform, arguably one of the most open platforms where we're always support that ethos of decentralization. We are one of the first community owned and if T is was there very governance token, that is a big differentiator. And we just have this protocol, which is opensourced. You can spun up your own note for the NFT API. So I would say at least openness this thesis of, we should be as decentralized as we can and we are on the road of progressively decentralized and become a default feature DAO. This is the big differentiator. On the product side and the multi chain is of course, a very, very big thing because we are the first, if I'm not mistaking NFT marketplace that combined several Layer-1s on the platform. So there are a couple examples when, when they have Layer-2s marketplaces, but several Layer-1s is something that nobody had done. And we see the 2022 year to be a lot about other chains. We see how TikTok is speaking. Immutable X you'd be solved as speaking Tezos somebody else puts speaking Solana so chains, oldest sports guys are on FLO. So chains have their own like preferred IP rights, holders and assets. And this, this thing, when Ethereum is like one chain to rule them all is fading away slowly, slowly, but we'll see. I think Solana is now account for 10% of all NFT sales. That's that's not small.
Yeah. Yeah. It's not. It's quite interesting, right? You raised the fact that Rarible has a governance token, which is very interesting because you know, many people always looking for tokens these days. Now there's always a big hoo-ha about OpenSea, and how they're raising a lot of equity money, and they're probably not going to release the token. So tell me about the journey or the decision to decentralize Rarible to your governance token, RARI, you know. I think it's quite clear why you chose to do this because you mentioned that you fully firmly believe in the decentralization ethos. Could you share a little bit about the journey? Also, maybe answer, is this a standard that you should expect for all NFT marketplaces.
Alex Salnikov [00:15:04]:
Of course. So why would I decide to go with the token, I think that's almost, wasn't the question. From the very beginning, we were very community oriented and listening to the Geisinger theater like what should we build? Who should we add? Who should we verify? So it made a ton of sense, like what to give that community more power over choosing what should they platform's course of action. And of course being that many years in the blockchain space, the, the understanding of how important decentralization is is very clear. And so it wasn't even a choice. It was a matter of like, how exactly should we do it? And I think the stars came together in the summer of just half a year after we started. So summer 2020, there was like a DeFi boom, and the illiquidity mining program as a concept emerged in the whole space. So Rarible pioneered with the liquid mining program for the marketplace. And that was very effective. So what we basically did. Yeah. So we tried to bootstrap liquidity. There was a good product, you could meet an NFT, you can sell an NFT, but there wasn't a lot of buyers and sellers. So what we actually did is we started to reward the liquidity and the real liquidity on the marketplace is buyers and sellers. So we started to reward buyers and sellers with the governance token for their contribution to the market. That was a big success, everything spiked in terms of like volume metrics users, and that established Rarible is a brand that's very successful thing for, for Rarible. And that's also distributing ownership to the users, to the core community of Rarible. That's very important. And what we learned although that it's actually hard for creators to participate in the governance a lot. So over time we came to the thinking. Okay, so right now the governance token, the RARI governance token, it's mostly the governance token for the protocol, for this part of the company that is built on the open and decentralized principles from day zero. Oh for the marketplace, we were a private company and we're progressively decentralized that. But still the front-end development moderation, all the things, they are quite hard to decentralize. And also we need to iterate faster. On the other hand, the protocol is a thing that is more like a public good. Like an infrastructure, like roads, for example, in the real world. And this public good is used by other projects. And these projects, they want to be sure that their opinion is represented when we choose like how the protocol should develop. RARI token is now the main governance token for the protocol and for other products that are built on the open principles this year. Protocol is decentralized, you can spun up your own node, it's open source. And so this part of Rarible will evolve and continue working as a DAO. While the marketplace it's more like a front end of the protocol. So UniSwap has a lot of front ends. The wallets utilize UniSwap, they have their own front end, the app.uniswap.org. Now thats the same mental model. There is a protocol which is decentralized open sourced community owned under several like front-ends that work on top of that protocol and Rarible.com as a marketplace is only one of those front ends.
Yeah, I think that's a very cool way of putting it because frankly, I never thought of it that way, but now it totally makes sense. Just stuff that's level, right, add so much more. So I want to ask, you know, we talk a lot about Rarible and NFTs as well. You know, there's a lot of things behind all these products are actually communities. And, you know, I just want to ask how different is the Rarible community from other communities? And when I say community, I'm actually talking about the type of creators or developers or collectors you get, you know, on Rarible.
Alex Salnikov [00:18:59]:
I think the variable community, its core originated just when we started the guys like Robness or Osinachi very loud and important people in this space. So the joint Rarible is an open platform because they didn't believe in the fact that there should be a platform that choses like who should be present on the platform. That community, the main community of Rarible mostly formed around that people. And as of today, I would say that the core Rarible community is mostly individual creators that are putting NFTs on the market. They are usually not creating their own projects. They're mostly like, okay, I am individual creator myself. I want to put stuff on the market. That's my thing. And mostly people who are on further on the decentralization spectrum. So people who support, okay, we shouldn't delete this controversial collection because it is important for everyone to be, to have a voice, so let's make. So the adept of openness, I would say in decentralization, when Aavegotchi guys came to Rarible like a couple of months ago, we had like the full blown launch for their collection. So when, when these guys came to Rarible, that was one of their calls, like like we're like Rarible because it's decentralized, we don't believe in the private companies in the space. So that, that would be the main characteristics . Of Rarible community today. It's creators individuals mostly believing in a decentralized thesis.
You know, I totally get it. Okay. So now I actually have a question, which is kind of tapping on what you mentioned earlier, right? About all of Rarible's core product. To offer creators to mint their project, through Rarible's contracts. There are actually some NFT collectors or creators who do not like minting directly from a place contracts. You know, the peers believe that two blockchain artists need to create their own contracts. This is kind of random, but just want to ask what your thoughts are on this?
Alex Salnikov [00:21:04]:
I totally agree with that people actually. When you create your own collection through variable, there is an ability to do sale. It actually deploys the smart contract from your own wallet and only you is the owner of that wallet. And you can do a lot of things. You can add that collection to other marketplaces, you can control its royalty, you can be the true owner of that collection. So I totally totally support people who want to create their own collection and that the true like creators should have their own collection. It's only the matter of the cost now. So sometimes it's expensive to create your own collection. It's expensive to deploy the collection to the Ethereum. We actually recently optimize that process and cut more or less like 30% of gas costs that you need to spend to create your own collection. And right now, especially before the new year, the gas prices are quite low. Just a couple days ago, I was able to create my own new collection on Rarible just for 300 dollars. That's not, that's not small, but compare it to like a couple of thousand that you had during the spikes of gas prices, that's, that's a very, very affordable thing. Moreover that's actually one of the latest years, Justin, several days ago we released that feature that when you create your own collection, you will be able to lease and mint inside that collection, inside your own collection. So to create items for free, actually. So you're only paying for the creation of collection and then you mint all items for free.
That's really cool.
Alex Salnikov [00:22:35]:
So yeah. Kudos. Just create your own collections guys. It's, it's amazing.
Retreating a bit back right? Just trying to understand the landscape as a whole, you know, what's your overall opinion on the current state of the industry and infrastructure that we have for buying or selling NFTs?
Alex Salnikov [00:22:50]:
The state of the industry is quite peculiar these days. I think the industry grown very, very fast. I mean, the NFT is the world of the year, the word of the year, according to the dictionary. So basically everyone in 2021 is talking about NFTs. Every artist, every influencer, every brand, the mainstream brands aped into the space. Nike Adidas, Pepsi, Coca-Cola, Valve not sure about the Valve actually. Oh, they banned NFTs, yes. So just a lot of new people in the NFT space. The industry is booming, what we've seen in the 2020 that the crypto art market was very popular in 2020. It was like half of the market was account to art. Now in 2021 at the beginning, the first half collectibles for account for 90% of the market. And what we see now in the second half is that the gaming is on the rise. And 40% of the market is, is gaming NFTs. And 50% of the market is collectibles NFTs. And 10% of the market is everything else. So the market is very, very dynamic. It changes every half of the year. So that like the literally the next day there is something, something completely new and everybody's doing that. We will see collectibles and PFP is the profile pictures that you can put an avatar on social networks. They are definitely play a big role in the NFT space and they will continue to play a big role. Next year Twitter rolling out this feature that they will allow you to put your NFT on the profile. The Discord will acquire their own NFTs integrations. Rather, too. So we'll see how this NFTs penetrate, like basically every part of the media industry I would say.
Ben [00:24:41] :
What everyone likes to say: "The metaverse". Laughs*
Alex Salnikov [00:24:44] :
Yeah. Okay. We, we talked a lot about all this, but there's one thing I actually want to ask. If there's one essential feature, that you have to name today that's missing from every NFT marketplace, what would it be?
Alex Salnikov [00:24:58]:
The wishlist? It's a very, it's a very good question from every marketplace.
No one has done.
Alex Salnikov [00:25:03]:
No one has done yet. I think I have a couple, a couple interesting ideas. What I would really want to see is the connection between NFTs and DeFi. The financialization piece. So when you can take a loan to buy your NFTs, or when you can sell your NFTs, when you can lend it to somebody. So things like that would be very, very interesting.
Coincidentally, I actually just did a podcast the other day on NFTfi. And they are actually offering the collateralization NFTs. Very interesting that to raised this, coincidentally.
Alex Salnikov [00:25:37]:
So yeah, I get it. You know, there's a lot of NFTs and there's a lot of DeFi, but what you're looking for now is bridging the gap right? Between the two, the two products because blockchain is always seen as Legos, right? Financial Legos. So many things to create a we don't know of. And then what happens when we open up to more kinds of products to build infinite kinds of things. Yeah, you're right. I, for one would like to be more liquid. Final question for the day you talked, you talked about Rarible's recent amendments, but what are Rarible's plans for the future? The new year's coming out 2022 is just around the corner. Well, what do you see for Rarible in 2022?
Alex Salnikov [00:26:12]:
2022, yes. I briefly touched on that, but the most important parts in 2022 will be the multi chain, right? Adopting new chains and Solana, and Immutable-X is an interesting too. And we will see, we'll see many more new things to emerge. And that's a definitely very, very hot topic in the space. And that brings a lot of like UX challenges, because how do you combine all the things into like one profile, an identity that user can utilize rather than just have their own like different accounts? So this is, this is the very, very important thing. The second big part is NFTs, as we said about communities, and we want to double down on things that will allow these communities to thrive. So things like, oh, it's just the marketplace for your own community, or let's see who are the most active people in that community? Or even things like treasury management. So this is, this is very important for the NFTs. As we see the Bored Apes, it's not, it's not an art project. It's, it's a community of people that are driving the space forward and that are all like recognizing each other because there are the part of the same like group. It will be super important to double down in that, of course, on the protocol side, we seem more and more and more and more companies to join the NFT space and they all need infrastructure to build on top. So giving them a multi chain protocol that they can create NFT experience with, super important for us. And continue to innovate on the decentralization, the governance for the protocol. All these things are super important for us.
Thank you so much, Alex, for coming today and giving your thoughts. Glad to have you on.
Alex Salnikov [00:27:59]:
Glad to be here. Thank you so much for all those amazing questions.
Thank you so much.
All right. That wraps up the show. Thank you for listening to the CoinGecko podcast. If you like our show and want to know more, check out podcast.coingecko.com or please leave us a review on iTunes. If you have any feedback, do drop us an email at email@example.com. Join us for more next week. See ya!
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