Rari Foundation

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Proposal author: StableLab

Review and feedback: Rari Foundation

Abstract

This proposal seeks to grant the Rari Foundation a mandate to collaborate with Rarible on implementing multichain protocol fee collection and designing a primary protocol fee structure for NFT mints. By doing so, the DAO aims to capture missed revenue from secondary trading across all supported chains and introduce a new, DAO-managed revenue stream for primary sales (mints).

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Motivation

After the implementation of [RRC-28], Rari DAO collects secondary fees in Ethereum mainnet. However, the existing Rari DAO setup does not yet have robust multichain fee collection mechanisms in place, causing the DAO to forgo potential revenue from additional secondary trading. Additionally, there is currently no DAO-controlled protocol fee for primary NFT mints, leaving an opportunity for Rarible (or other marketplaces) to collect fees unilaterally. Enabling multichain fee collection and introducing a primary fee will strengthen the DAO’s treasury and align Rari DAO’s longer-term mission of protocol sustainability and growth with the performance Rarible, the biggest app built on top of Rari Protocol.

To add some numbers, in 2024, Rarible primary sales totaled ~ $230,000, while secondary sales totaled north of $9.7M during the same period (Rarible Dune dashboard 1), of which only ~34% happened in Ethereum mainnet. Therefore, ~66% of secondary volume happened in sidechains and L2s.

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(Top) Rarible total volume in the last year coloured by category (primary/secondary). (Bottom) Distribution of volume by chain in the last 180 days.

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Rationale

New sources of revenue: Based on 2024 primary and secondary sales data, and with an estimate of a 0.5% protocol fee on both sales categories (as it is currently applied in Ethereum secondary sales), the DAO could be earning an additional ~$33,000 over 2025 if NFT volume projections remain constant.

Alignment with Rari DAO’s Mission: The DAO’s primary objective is to ensure sustainable growth and revenue streams that support ongoing development, innovation, and community engagement in the Rari ecosystem. Expanding fee collection to multiple chains and implementing a primary mint fee directly address this objective.

Incentives alignment with Rarible: By leveraging Rarible’s existing infrastructure and user base, the DAO can quickly tap into new revenue. This implies that DAO-led programs aimed at enhancing activity at Rarible will have a direct impact on DAO revenue, creating a synergy where both entities, Rarible and the Rari DAO, benefit from each other’s success.

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Key Terms

Multichain Governance: A governance model or system that spans multiple blockchain networks, enabling consistent decision-making across chains.

Primary Protocol Fee: A fee applied when an NFT is minted (as opposed to a secondary fee that applies when the NFT is traded on the secondary market).

Secondary Protocol Fee: A fee taken from NFT sales after the initial mint (e.g., resales on marketplaces).

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Specifications

Multichain Fee Collection

The Foundation will coordinate with Rarible to enable fee collection on all chains currently supported by Rarible. Fees will be routed to the DAO treasury or a designated DAO-controlled wallet.

Primary Protocol Fee Design

The Foundation will work with Rarible to negotiate and configure a new primary protocol fee. This fee will replace or supplement the existing “$2 minting fee” that currently goes solely to Rarible, ensuring the DAO captures a share of that revenue.

Governance and Compliance

Fees and fee structures will be implemented in accordance with relevant regulations and Rari DAO’s existing governance frameworks. Any changes or adjustments to fee percentages will require the DAO’s governance approval.

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Steps to Implement

1. DAO Approval of Foundation Mandate (This Proposal): Secure approval from Rari DAO token holders to empower the Foundation to proceed with negotiations and technical integration.
2. Technical & Legal Preparations: The Foundation will collaborate with Rarible’s technical team to establish robust smart contract changes for fee collection on each supported chain. It will also conduct any necessary legal review or documentation required for cross-chain fee collection.
3. Fee Structure Negotiations: The Foundation will propose a new primary protocol fee structure in collaboration with Rarible. The Foundation will bring proposed fee splits and structure back to the DAO for final approval.
4. Development & Deployment: Rarible, in collaboration with the Foundation, develops and implements updated smart contracts (or configurations) to collect both secondary and newly introduced primary fees. The Foundation oversees and tests the deployment process to ensure correct operation.
5. Monitoring & Optimization: Once implemented, the Foundation and Rarible will monitor fee generation, user feedback, and overall market impact. The DAO may introduce adjustments or optimizations via subsequent governance proposals if needed.

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Tentative timeline

Week 2-4:

• Rari Foundation coordinates with Rarible to scope out technical requirements.
• Initial design for multichain fee collection and primary fee structure completed.
• Legal documentation (if necessary) is drafted.

Week 6-8:

• Smart contract updates and testing.
• Deployment to test environments, community feedback collected.

Week 8-10:

• Final deployment to all supported chains (Ethereum, Polygon, etc.).
• Ongoing monitoring and optimization.

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Overall Cost

Estimated to be minimal compared to projected revenue gains. A final cost outline will be provided once the Foundation and Rarible agree on the technical scope.