Is Staking Crypto on Artists and Collectors a Good Idea?

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Recently, SuperRare Labs, the group behind the SuperRare NFT art marketplace, known for its expert curation and affluent collector base, has launched what it’s calling the Rare Protocol.

By its simplest description, the Rare Protocol, which operates on the Ethereum mainnet, is an open curation protocol for NFTs that allows users to stake the platform’s native RARE token on artists, collectors, or curators that the user feels deserve recognition, with a chance to be rewarded as the selected individual finds success.

In this exploration of the protocol, we speak with the SVP of SuperRare Labs, Zack Yanger, and look at details on how the protocol works, why it was created, and what the broader Web3 space stands to gain from its existence, as well as the plans SuperRare Labs has for it in the future.

What Is Rare Protocol?

At its core, Rare Protocol is designed to act as an open curation protocol for NFTs with the concept of forming a Web3 native creator economy and on-chain social graph that reflects reputation and promotes discovery.

This is achieved through what the protocol calls “Curation Staking,” which is powered by two main components, Community Pools and Curated Lists.

Designed to operate as a peer-to-peer system, any participating user can stake their RARE on another, be it an artist, curator, or collector — signaling that they value that individual. In terms of financial incentive, this contribution admits the staking party into the artist, curator, or collectors Community Pool, where they’ll be represented amongst other stakers and potentially yield rewards as the individual they’re staked in finds on-chain success.

Beyond financial incentivization, the owner of the pool will also be able to engage with stakers as they see fit as well as use data like wallet addresses and staking ratings to determine and set access for specific community benefits.

As a byproduct of users staking, they’ll begin to form a “Curated List,” which Rare Protocol describes as an on-chain reflection of the artists a user has staked in, that “Link pools to other lists in order to uncover and connect similar tastes.”

Why Is It?

Aside from the potential to gain RARE, the protocol is designed to transform the way discovery is gone about in the Web3 space, navigating away from social platforms that largely rely on likes, comments, and shares — into a more natural and digitally native experience.

“Through Community Pools and Curated Lists, discovery becomes a logical and engaging game of following signals down well-lit routes from your existing connections to nearby communities of art, artists, and taste preferences,” shared the protocol.

Other inspirations behind the protocol were to help nurture a space that provides improved discoverability, security, and seller reputation. This is achieved through the broader ecosystem or a sort of social graph that is a byproduct of staking but simultaneously one of the protocol’s best features.

Additionally, in a comment to nft now, Yanger shared “We’ve seen hundreds of marketplaces, thousands of creators and collectors, and millions of NFTs having been birthed in the past five years. It’s a new paradigm for creators. We now have on-chain royalties, auctions, and self-sovereign minting smart contracts that lower the barrier to entry and create new economic opportunities, he expressed, adding “However, this market is still in its nascency, and has significant challenges. Scams and rugs are prevalent and discovery is challenging. Rare Protocol is a new system for onchain curation that aims to solve the reputation and discovery problems that have become so prevalent in web3.”

Is It Equitable?

While all of this sounds well and nice, what’s to stop the rich from getting richer, the creation of yet another walled-off garden or exclusive group being formed in a space that is meant to embody democratization — as we’ve seen time and time again.

The good news is, the Rare Protocol takes that into consideration, in fact, the rewards are on a curve that rewards early contributions as well as early discovery, meaning a staker stands to gain a higher RARE yield by staking their tokens on artists or individuals that have not yet been discovered or have a less densely populated community pool.

Explaining this in a response to a question by X user Danil Pan, Yanger said “I guess nothing can really stop people from staking on already successful artists but the system is purposefully set up in a way that incentivizes people to stake on emerging/unknown artists that aren’t yet popular.”

He further explained that “If you are the only staker (or one of a few) in an emerging artists pool when they make their first big sale the rewards are going to be better than if you are say part of a popular artists pool with 1000 other people that will all split the rewards.”

That being said, Yanger wanted to drive home the point that the system, to him, is less about rewards but “largely about being able to prove on chain that you supported an artist earlier than others did,” as he explained “In 5 years I want to be able to point back to my staked list and prove that I discovered artists x y and z before they became huge. Long term the real opportunity here is in staking emerging/lesser known artists.”

Looking Forward

As it charts a path to decentralized curation, the Rare Protocol has announced that its mission is to “revolutionize the economics of human creativity.”

It admits that it will need the help and adoption of others who are passionate about art and curation and that together they’ll be able to build an interconnected ecosystem of creativity and value.

“Rare Protocol is rooted in the belief that much of blockchain’s potential lies in its capacity to remove bottlenecks in the flow of capital that have long existed solely for the benefit of society’s affluent. In doing so, blockchain enables wealth to grow and spread to where it’s most deserved,” shared the protocol.

Sharing what he’s most looking forward to as the protocol gains traction, Yanger said “I’m personally most excited by the democratization of access for curators.”

He added ” A young curator in a remote area of the world that would otherwise have no ability to gain respect in the art world can now log onto the internet, tap into this system, and start staking artists they believe in. In the future, if any of the artists they staked go on to be a big success, the curator will get credit for discovering and supporting that artist early and in theory building up their name and reputation as a great curator with a keen eye.”

While still largely experimental, the protocol provides engaged users with an opportunity to express their unique taste, connect with like-minded individuals, showcase their eyes, and potentially earn rewards, recognition, or both as a result — which in essence creates a win-win scenario for creators, collectors, curators and the Web3 space as a whole.

For a full technical breakdown of the protocol and a step-by-step guide on how to start using it today, check out the Rare Protocol’s developer docs.

The post Is Staking Crypto on Artists and Collectors a Good Idea? appeared first on nft now.

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