SuperRare bets it all on a DAO

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XCOPY’s NFT “Right-click and Save As guy." Yes, I right-clicked and saved it

SuperRare, the digital art platform, is one of the few mainstream success stories of web3. It’s known for selling premium NFTs, has well-known customers like Snoop Dog, scored partnerships with luxury brands like Gucci, and generated over $250 million in marketplace revenue.

All that came from a curation model that exclusively allowed the company’s hand-picked artists to list their work on the platform. Now, as it transitions to a DAO, its community is taking on the role of curator and keeping ALL of the marketplace’s revenue.

Why did it turn itself over to its community? That’s what I asked John Crain, SuperRare’s cofounder.

Listen to the interview or read our tightly edited transcript (below)

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Curation is a priority

Andrew: Unlike OpeanSea and other marketplaces where anyone can sell art, SuperRare is curated. Why?

John: In the early days, we were very excited about the potential for digital art. But at the same time, we knew it introduced the potential for fraud. Collectors needed to have a place where they could trust the authenticity of the artworks they saw. We decided to curate the art at the artist level. We pick the artists. They pick the art they want to list.

SuperRare Gucci.png

Gucci Invested $25K in SuperRare's token & launched a digital “Vault Art Space.”

The DAO takes on curation

The DAO brings in more curators. How does it work?

We knew that software scales easily, but curation can lose the human touch. We didn’t want to turn our site over to an algorithm, like YouTube or Instagram.

The first thing a DAO does is add curators to this expanding ecosystem.

The DAO’s power

You created tokens that came with voting power, right?

Yes. We airdropped them to everyone who used our platform, an equal number to artists and collectors. Anyone who minted or bid on our platform got tokens, even if they weren’t successful with their sail or purchase.

We also gave some to the DAO’s treasury. So there are extra tokens to reward other people who help build the ecosystem.

Did you save any for SuperRare Labs, your company?

Yes, SuperRare Labs and our investors kept 40%

That enabled our Space Race, which brings in new curators.

The Space Race is a series of votes for new curators. Spaces are sections of your site where new curators pick artists to showcase. Every token holder gets to vote on a new Space and its curator. Curators keep a percentage of sales that come through the Spaces they manage. Right?

Yes.

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$RARE token holders collectively govern the SuperRare DAO.

The DAO’s revenue

What percent of your sales come from these new Spaces?

Spaces are contributing 20% of sales.

It’s important to know that all network fees — even those on the main SuperRare site — go to the community treasury.

So you’re fully transitioning to a DAO?

Yep. Exactly.

SuperRare Labs gets paid essentially like a software services provider to the DAO. We’re invoicing its treasury and getting paid by the DAO.

SuperRare token distribution.png

Why a DAO?

If things were working, why change?

NFTs are open assets. Platforms like YouTube have network effects, but the content lives on their platforms. It doesn’t get simultaneously published to Vimeo and Rumble and whoever.

The physics of NFTs are different than the web. Your content is everywhere.

You’re saying that if the content is everywhere and your community could leave you at any minute then you want to give them an ownership stake so they could figure out what it would take for them to stay?

Right. We’re building this together.

Do you have an example of something you expect to happen because you’re a DAO?

There was software that we used to run our Space Race. Its creators sunset it. We had to pause growth for a few months. A community member stepped up and said “hey, we need this to exist.” They spent long nights and weekends and built a version that was tailored to our community.

When we talk in two years, what’s one thing I’ll see because of the DAO?

I think you’ll see an expanding rate of experimentation. That includes new auction models or someone could extend the SuperRare protocol without us building the addition.

SuperRare’s revenue

Finally, how’s revenue in this market downturn?

I think last month (Sept 2022) we did roughly $7 million in sales. A year ago the monthly was $15 million.

What’s interesting though is that the volume isn’t different. Revenue in ETH is the same, but since ETH is down compared to the Dollar, our Dollar-based revenue is down.

We’re still seeing steady growth in the number of artists and collectors on our platform.

Freakin’ A. Thanks for being on here.

Thanks for having me on.