The non-fungible token (NFT) marketplace Rarible launched a redesigned trading platform on Tuesday and introduced a new system that directs trading fees towards token buybacks.
Rarible told Cointelegraph that this model, which redistributes tokens to active traders, aims to create a sustainable alternative to the incentive schemes of NFT marketplaces that previously relied on fixed token allocations.
"The previous designs in the NFT marketplace ecosystem were unsustainable," Anna Riabokon, head of operations and governance at the RARI Foundation, told Cointelegraph.
Riabokon explained to Cointelegraph that under the new model, the RARI Foundation will "return all revenue generated from platform trading fees back to the traders." She claimed this essentially creates a "free" market.
Other NFT marketplaces have attempted reward programs, often relying on token incentives to promote trading activity.
In 2023, Blur dominated NFT trading volume with a points-based system that rewards traders with future token airdrops.
However, while this strategy quickly attracted liquidity, it also fostered wash trading methods, where users buy and sell NFTs back and forth to maximize airdrop rewards without real market demand.
The NFT platform LooksRare also adopted a similar approach, distributing its tokens to traders as part of its issuance program. Although this model briefly boosted trading volume, most activity sharply declined once the token rewards lost value.
While the previous iterations of competitors' reward programs showed unsustainable results, Rarible remains optimistic about its token reward system. Riabokon told Cointelegraph:
"By redirecting all revenue generated from trading back into this incentive program, the system is essentially sustainable," Riabokon added.
She also stated that the platform will ensure transparency. Riabokon told Cointelegraph that all trading fee payments are on-chain and traceable to the RARI Foundation treasury.
She mentioned that leaderboards will be provided as part of the incentive program, and the foundation will release regular transparency reports.
Related: Tether cancels plans to freeze USDT on five blockchains
Original article: “Rarible launches new NFT marketplace with buyback reward model”
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