Alex Salnikov, Inside the founding of Rarible
Alex Salnikov, co-founder and head of product at Rarible, shares his take on where the platform – known as the world’s first “community-owned marketplace” – is and where it’s heading. He shares insights based on years of experience in the world of crypto startups. Nifty Nick takes his guest through a number of hot-button issues related to blockchain, the importance of user-friendliness, the risks related to IP infringement and flat-out fraud in the NFT collectibles space. Alex explains the $RARI governance token and ticks off projects in development to enhance Rarible’s functionality and the overall NFT marketplace.
“The key to blockchain is interoperability and the NFT space gives the same sense of interoperability for media files. You really want to be on the same chain with everybody else.” (Timestamp: 14:15)
“(Seller integrity) is a social contract. It’s a verification that can be peer-to-peer. That’s probably the best innovation that can be done.” (Timestamp: 20:52)
“There’s a lack of curation in the (collectible) space now. It’s really hard to understand if you’re buying a good thing or not. You need to trust someone.” (Timestamp: 29:15)
“It’s hard being the first in the non-DeFi space and we’re doing it slowly, but steadily.” (Timestamp: 40:59)
How Rarible became Alex’s Focus
Point of Entry: Alex had long considered the blockchain space a missed opportunity because of its inaccessibility to consumers unfamiliar with NFTs. In 2019 he started brainstorming about possible products to serve this need. Rarible grew out of the desire to create something fresh and user-friendly.
How many NFTs Alex owns: He has about 100 at Rarible and 50 at other sites, but time is limited and only the most unique, fresh collectibles command his attention. He has attracted to 3D and Augmented Reality (AR) NFTs.
Rarible is a Work in Progress
A Giant Misunderstanding: Rarible had a viral moment when someone publicly declared himself the CEO of Rarible when in fact … he was not the CEO of Rarible. It was a case of over-reach and enthusiasm run amok and that’s about it.
Plans to Make Rarible More User-Friendly: Alex is committed to making the onboarding process and every other aspect of the platform widely usable. In order to do that the ongoing challenges include creating an effective wallet and other tools to smooth the flow of logins and other functionalities.
Innovation in the Wallet Space: The future marketplace is going to require multichain rather than a just a single Ethereum wallet. It’s a big project that Alex isn’t personally eager to take on, but he hopes and believes that other entrepreneurs are at work on cutting-edge developments in this space.
Scaling the NFT Marketplace
The Layer 2 Solutions Space: Very lively and vibrant. Currently there are no working solutions, but a lot of ideas as to how to build the perfect Layer 2. What is clear is that Ethereum Virtual Machine (EVM) support has a major role to play.
It’s Complicated: EVM support is critical because the cost of transition involves rewriting an entire set of smart contracts – an enormous project. In recent months Rarity has optimized its architecture to support EVM chains that will soon deploy on Polygon as well.
The Role of Security
Security is a Function of Consensus: Alex explains that security is about how Layer 2 works whereas EVM is about the interface that talks to Layer 2 when writing Smart Contracts.
What’s Available for NFTs: Alex says that security in this context is less important for NFTs than for DeFi because you’re talking about smaller funds and sizes. Alex believes that DeFi has a bigger stake and will eventually take care of the security issue with innovations of their own.
Rarity’s Value Prop
A Saturated Market? With new forums cropping up every day, Rarity has been very deliberate about its role and ROI for users. Liquidity (or Visibility?) is a huge differentiator because people understand the value in being seen and being positioned within a large marketplace, advantages that Rarible’s platform offers.
Rarible Differentiators: The consumer value proposition starts with its democratic process – no verifications, approvals or other barriers to creating NFTs and going live in the marketplace. Easy user flow is a Rarible priority, offering newcomers first entering the marketplace the most simple, inviting experience possible.
Low Barriers to Entry Come with Risk
The Up-Sides and Down-Sides: Quick access makes NFTs user-friendly but copy cats are also out there, ready to scam users. IP infringement and fraud are real problems and among the most common complaints in various marketplaces.
Rarity’s Approach to Verification: Alex laments that there’s no good process for verification available at present. He believes there are backstops that help, including token created registries, the network effect and elevating visibility among legitimate creators so that users can verify for themselves.
Relying on Peer-to-Peer: Proofs aren’t out there to validate items, so Alex believes it’s going to come down to users serving as proxies for each other and relying on a sort of crowdsourcing approach to establishing the legitimacy of sellers.
All About Metadata
Where’s the Information Stored? Making files and decentralizing storage for files is a huge challenge and Alex is enthusiastic about several important projects addressing the issue, including IPFS, Arweave and Filecoin.
Minting at Rarible: There are different strategies and evolving standards for data storage and sharing. Rarible uses IPFS, which Alex believes is the common standard right now, with Pinata as a complement to add extra protection for files.
The NFT Collectible Space is Exploding
Deferring Minting to Buyers: Rarity is in late-stage development for a new set of very powerful, malleable smart contracts able to manage royalties downstream, multiple creators and multiple collectors. Deferring minting to buyers is one of the features on the table and soon to be live.
Does the Future Include Independent Shops? Rarity already supports individual branding of accounts and collections. The future goal is to allow resale shops to originate so that it’s a “shop within a shop” experience.
Factoring in Trust: In the traditional world, where there are galleries and other institutions that confer legitimacy and establish brands, the NFT world lacks an authoritative curator.
NFT Functionalities Rarible Seeks
Technology that’s lacking: Alex sees two areas where new functionalities are needed: First, tools to open the NFT marketplace and make it more consumer-ready. One stop shopping, easy login and access to credit card payment options are all high priorities. Second, and perhaps more importantly, is the on-chain protocol for trading NFTs. Most marketplaces are using off-chain orders but Alex believes placing them on-chain will be transformational.
A Clear Direction for Rarible: On-chain is a central focus being built from the ground up with a decentralized philosophy. It will be governed by the (Decentralized Autonomous Organization) DAO and token-holders and completely open source.
Will Ethereum Be the Chain of Choice? Rarible is looking at alternatives to connecting NFTs with Ethereum. But it remains the gold standard because of its strength as a non-charted globally connected space for making multiple transactions. It currently drives the whole ecosystem.
The Future of Non-Charted: Alex it’s not infinite. Ethereum 2.0 will be charted, but there’s a common understanding that DeFi will likely transfer in a single chart because projects heavily rely on interoperability.
Major Brands Are Jumping In
What Chain Makes the Most Sense? Corporate all-in-one packages are very appealing because they are seamless and accessible user experiences. Many traditional enterprises are investing but are still currently unable to reach their wider audience.
The Evolution of Governance
$RARI’s First Year: A native governance token for Rarible’s NFT marketplace, $RARI was initially launched with the intention to bring more creators into the governance space. That turned out to be more challenging than expected, so Rarible is doubling down on new protocols to augment and delegate trust.
Massive Governance Revamp: Alex says Rarible will soon be putting out a call for delegatees as part of a huge effort to increase trust among the users they serve. They will be fully deputized to make changes and generate a consortium of projects for long-term governance protocols.
$RARI Influence on the Marketplace: The consensus is that the Rarible marketplace, which is being progressively decentralized, won’t be subject to heavy involvement with governance because the NFT marketplace is so fluid. It’s built on day-to-day decision-making capability, which is working fine within the current corporate environment.
Establishing Protocols Takes Time: Dealing with protocol is a much slower negotiation that Alex thinks in some ways resembles the political process. But duty of care is in order because governance must be designed to withstand and remain resilient in the bigger picture. In that context, Alex believes governance must be allowed the time to evolve without undue limitations or immediate marketplace demands and constraints.