Rarible, a prominent non-fungible token (NFT) marketplace, has introduced a new financial model aimed at creating a sustainable incentive system for traders. The platform is redirecting all transaction fees into token buybacks and distributing RARI tokens to active participants. This approach is designed to replace earlier, unsustainable reward systems that relied on fixed token allocations, which often ran out of supply after initial high incentives [1].
Anna Riabokon, head of operations and governance at the RARI Foundation, emphasized that previous models were unsustainable due to their reliance on token emissions that eventually depleted. In contrast, Rarible’s system leverages transaction fees to generate ongoing revenue for its token buybacks and trader incentives. This, according to Riabokon, makes the platform a “fee-free” marketplace, as all fees are returned to the community in the form of RARI tokens [1].
Ask Aime: How does the new financial model impact Rarible’s long-term sustainability and user engagement?
The NFT marketplace space has seen a variety of incentive strategies, many of which failed to maintain long-term engagement. For example, platforms like Blur and LooksRare initially used token airdrops to attract trading volume, but these strategies often led to wash trading and a sharp decline in activity once rewards became less valuable [1]. Rarible is seeking to avoid this by generating revenue through licensing its software to major brands such as Mattel MAT — and McFarlane Toys. This licensing income, combined with transaction fee redistribution, allows the platform to maintain a steady and transparent funding mechanism for ongoing incentives [1].
Transparency is a key component of Rarible’s new system. According to Riabokon, all transaction fees are recorded onchain and can be tracked in the RARI Foundation’s treasury. The platform also plans to provide leaderboards and issue regular transparency reports to ensure accountability within the incentive program. These measures are intended to build trust and ensure that the distribution of tokens reflects genuine trading activity rather than speculative or artificial market behavior [1].
The introduction of Rarible’s fee-backed model is taking place in a broader context of token buybacks and burn mechanisms in the crypto space. For example, WLFI, a governance token associated with World Liberty Financial, recently proposed a similar buyback-and-burn program in response to a 30% post-launch price decline. The proposal involves redirecting 100% of fees from protocol-owned liquidity pools into token burns, aiming to reduce supply and increase scarcity for long-term holders [3]. While some analysts argue that such models can provide structural support for token prices, others caution that their effectiveness may be limited by factors such as large token unlocks and limited organic demand [2].
Rarible’s approach, however, appears to be more integrated with its core business model. By leveraging licensing revenue alongside transaction fees, the platform is attempting to create a self-sustaining ecosystem that supports both traders and long-term holders. This is a departure from the more speculative incentive strategies that have dominated the NFT space in recent years and could signal a more mature approach to token economics in decentralized marketplaces [1].
Source: https://www.ainvest.com/
