The non-fungible token (NFT) market is thriving into this new year as trade volume jumped three-fold in January 2022 to nearly $7 billion, from less than $3 billion in December 2021.
Google Search Trends also shows a large rise of interest in NFT, now surpassing that of crypto. The NFT mania gained momentum in 2021 when NFT sales volume totaled almost $25 billion, compared to just $95 million the year before, according to the data from DappRadar.
Bored Ape Yacht Club (BAYC) NFT collection is currently seeing a lot of traction, with their floor price soaring to 118.69 ETH, after Justin Beiber became the latest celebrity to purchase one for 500 ETH or about $1.3 million.
The majority of the increase in NFT volume is due to a new NFT platform LooksRare. But while this decentralized competitor to OpenSea is leading the NFT volume, it is also engulfed in “wash trading,” a practice where NFT owners are buying and selling digital art between themselves. Meanwhile, other NFT platforms are seeing gradual growth.
SuperRare and Rarible are two such platforms, and today, we’ll draw a comparison between these two.
In 2020, when NFTs first started gaining traction, Alex Salnikov and Alexei Falin founded the NFT marketplace Rarible. And as NFTs gained mainstream adoption in 2021, the startup raised $1.75 million in seed funding. Only a few months later, in June, Rarible again announced a $14.2 million Series A funding round from investment firms 01 Advisors Venrock Capital and CoinFund.
With this fresh capital, the company aims to make the NFT space more approachable to new and everyday users by focusing on more user-friendly developments. Rarible said at the time that they want to have a platform where both an indie creator and a pop icon can create NFTs easily and cheaply and sell it to their community of supporters and multi-million audience in a sustainable way.
Compared to Rarible, SuperRare is a relatively older NFT marketplace that was founded back in 2017. This year of the bull market was when many OG NFT collections like CryptoKitties, CryptoPunks, and EtherRock were launched.
It is one of the original NFT marketplaces, which was launched to the public in 2018 by co-founder John Crain, who is the CEO, Charles Crain, the CTO, and Johnathan Perkins who’s the CPO.
SuperRare is powered by the tech stack of Pixura, a platform by these three co-founders, which is used to create, trade, and track crypto collectibles.
This NFT marketplace raised $9 million in March, from the likes of 1confirmation and Velvet Sea Ventures, SamsungNext, Collaborative Fund, Ashton Kutcher, and Guy Oseary’s Sound Ventures, Mark Cuban, Naval Ravikant, Chamath Palihapitiya, and Marc Benioff, among others.
Starting 2020 with just four people, the SupeRare team ended 2021 with a headcount of more than 30.
SuperRare curates its collection with a focus on super-rare NFTs. The key feature of the platform is its Features tab, which is a digital showroom where SuperRare hosts special collections and promotes collaborations.
On this platform buyers are called "collectors,” and the buying process of an NFT is pretty much the same as other platforms. But as a seller, one is required to be whitelisted for, which you have to fill an application, and only then you can put your NFT for sale.
When it comes to fees, SuperRare charges a 3% transaction fee on all of its NFT purchases, paid by the buyer. On top of this, there is a hefty 15% commission on all primary sales. In comparison, Rarible takes a 2.5% cut of transactions from both buyer and seller.
SuperRare also allows creators to earn as much as 10% in royalties on every secondary sale. Much like SuperRare, creators on Rarible can set a percentage of future sales that will be paid out to them automatically whenever the NFT is resold. Furthermore, Rarible allows royalties to be split between many creators involved in the project.
As an art-oriented NFT marketplace, SuperRare is used to collect and trade unique, single-edition digital artworks.
Built on Ethereum, it is a peer-to-peer marketplace for ERC-721 NFTs. Ethereum is the most popular blockchain for NFTs. However, it comes with the issue of scalability that makes it very expensive for an average user.
In August 2021, Ethereum implemented a significant upgrade, EIP-1559, which changed its fee market mechanisms and will be having another significant change “The Merge,” to address its scalability. This change will swap its current proof of work (PoW) consensus mechanism to proof of stake (PoS) consensus algorithm, and while it is expected to happen this year, there is no exact launch date yet.
With Ethereum yet to be scalable, users and investors have moved to competing smart contract platforms like Solana (SOL), Fantom (FTM), Avalanche (AVAX), and Algorand (ALGO), that are offering lower fees and faster transactions.
In the light of this layer-1 competition, Rarible has moved beyond Ethereum to integrate Tezos and Flow and is planning to support other major blockchains such as Solana and Polygon as well. Being a multi-chain platform, Rarible allows users to mint NFTs for near-zero gas fees.
This NFT marketplace has been working with brands like Twitter and celebrities like Floyd Mayweather Jr, and Lindsay Lohan as well as digital artists like Pak, eBoy, and Aavegotchi.
Rarible has also partnered with software giant Adobe to use its Content Credentials to verify the authenticity of the NFTs.
The NFT platform introduced ‘Lazy minting’ to allow creators and buyers to only pay the gas fees when the sale happens for “zero crypto onboarding” and to ensure “the longevity and sustainability of the industry.”
Another development made by the platform was Rarible Messenger, which enables users to message any wallet on it and all of its supported blockchains. It currently supports instant message notifications and is planning to introduce features like group chat to help users connect to their communities.
Rarible Messenger was rolled out as a built-in marketplace messaging tool, but the startup’s ultimate goal is to release it as a standalone app to solve the blockchain messaging issue.
When it comes to having a token, both of these platforms have their own native crypto assets.
Rarible’s utility token is called RARI, which governs its decentralized autonomous organization, Rarible DAO. The token holders get governance rights allowing them to vote on the future of the platform.
This ERC-20 token was also launched in the summer of 2020 as part of a liquidity mining program, under which active users are incentivized with rewards paid out in RARI tokens.
There are a total of 25 million RARI tokens, out of which just almost 6 million RARI tokens are circulating in the market. 60% of RARI’s total supply is reserved for its users, with about 41,250 RARI tokens distributed every week among users in proportion to the sales volume.
Currently, there are 25,451 RARI token holders. With a market capitalization of $53.8 million, the token is trading at $8.91, down 81% from its all-time high of $46.70 hit in March 2021.
SuperRare’s native token is RARE, which is an $83 million market cap cryptocurrency trading at $0.58, down over 84% from its ATH $3.64 made in early October.
It was in August 2021, that the “Curation Token” was launched and 15% of its supply was airdropped to the past users.
RARE is also a governance token and is also used for future liquidity and staking programs that offer art access and fee sharing. The holders also vet and elect the Spaces, which are independently curated storefronts designed to help promote artists and create a diverse art ecosystem.
This NFT platform is also transitioning to a decentralized marketplace by shifting ownership and governance of the network to artists, collectors, and curators. This will be done via self-governing entity SuperRare DAO, which is funded by 100% of the marketplace fees. Historically, these fees went to the founding team to fund operations.
Much like SuperRare, Rarible has been transitioning to a true DAO to ensure decentralization and transparency over the platform. For now, the voting power is advisory only, but the goal is to give the users full control over the platform.
Rarible’s marketplace, which offers NFTs of digital artworks, photography, music, games, domains, and virtual land, has managed an overall $290 million in total trading volume as of January 31, 2022. Almost 96,200 traders have used the platform.
In comparison, SuperRare has done a total of $169 million in volume and has more than 6k traders, according to DappRadar.
In the last 30-days, Rarible has done just over $12.8 million in volume, from more than 24k traders, according to the data provided by Dune Analytics. SuperRare, on the other hand, has recorded $16 million in volume.
Rarible has also earned $14.5 million in fees, meanwhile, SuperRare DAO Treasury’s monthly revenue has grown from $313.6k at the beginning of 2021 to end the year at $3 million.
When it comes to market share, both Rarible and SuperRare have less than 1% of NFT weekly volume market share today, while a year back, they were accounting for 9.3% and 3% share, respectively.
Today, OpenSea is the leader of the NFT marketplace, which pulled in a record $5 billion in volume in January 2022.
2022 is having an explosive start after recording a 260x increase in NFT Sales last year. NFTs adoption is seeing a constant incline as this mania reaches all parts of the world.
Interestingly, NFTs are holding their value much better than the broad cryptocurrency market, where prices are sluggish. If NFTs manage to hold their value over the long term, they could very well be a “store of value.”
As NFTs gain mainstream adoption, it makes sense that everyone from brands to celebrities would be jumping on this train. According to Pedro Herrera, a senior blockchain analyst at DappRadar, “the social reach of celebrities is massive, and it’s going to be an important step in the search for mass adoption.”
To cater to a mass audience, several special marketplaces have popped up. Even cryptocurrency exchanges like Binance, Coinbase, FTX, and Kraken have either launched or are in the process of launching their own NFT marketplaces.
Among these specialized NFT marketplaces, SuperRare and Rarible are relatively early in the game. For Rarible, its user-friendly website and interactive UX/UI work in its favor. On top of this, the platform is scaling its multi-chain operations to make sure even smaller users can get in on NFTs while collaborating with other projects in the NFT as well as broader crypto space.
Meanwhile, SuperRare has managed to find a niche by focusing on high-quality pieces and focusing exclusively on art and Ethereum blockchain.
Having tokens to allow its holders to participate in the future of the platforms and earn through its reward and staking system can further help both of these NFT marketplaces gain traction. Moreover, both Rarible and SuperRare are in pursuit of handing all the control to the community by transitioning to a true DAO.
Both the platforms have their own unique features that cater to specific user needs. But we have only begun to see the NFT adoption. In 2021, NFT was the buzzword with their primary usage seen in digital artwork, but in the future, they can see their application in the metaverse, healthcare, ticketing, gaming, finance, real estate, intellectual property, patents, and much more.
As NFTs become ubiquitous, driven by their ability to make digital ownership provable, and the multi-chain world makes working with them cheaper, we can truly see NFT becoming the future of the internet.
And as NFTs become a phenomenon, they will attract even more users, companies, and talent to the space that will provide us with more innovative and useful NFT marketplaces that would come with better incentives.