Introducing RARI: The Settlement Layer For Programmable IP & NFTs Royalties

In collaboration with Caldera, our roll-up deployer partner, it was evident that joining Arbitrum Orbit’s ecosystem as a custom L3 was the best pathway forward when building RARI Chain. This move allows the RARI Foundation to leverage Arbitrum One's existing infrastructure—known for its scalability, efficiency, and Ethereum-level security—while also introducing unique features and customizations, such as the embedded royalty mechanism.

This integration ensures that RARI Chain can deliver on its promises to creators and users alike, fostering innovation and growth within the NFT space, all while maintaining fiscal and operational sustainability for the RARI DAO and its greater ecosystem.

The RARI Chain is bringing a new paradigm into the NFT ecosystem, fundamentally empowering creates, and expanding the use cases of NFTs. As a Layer 3 solution, it addresses the critical needs of scalability, cost efficiency, and customization, ensuring that the NFT ecosystem is accessible. We invite developers and creators to leverage our infrastructure; RARI Chain is a community-driven initiative to shape the future of digital creativity and ownership.

History of L1s

The web3 ecosystem began its journey with Layer 1 (L1) blockchains, among which Ethereum emerged as a pioneering platform about a decade ago. Ethereum established a thriving ecosystem that spans across various verticals including DeFi, NFTs, gaming, and more. With an estimated 100 million interacting with on-chain applications, as reported by MetaMask, this pioneering L1 is the backbone of the web3 space.

Many successful projects that leveraged Ethereum as a launchpad—Uniswap, MakerDAO, OpenSea, Aave, Curve—benefit from its extensive distribution power, user base, liquidity, and robust network effect. In the current landscape of competing blockchains, its potential is difficult to rival.

However, as Ethereum is one of the earliest blockchains, it faces the blockchain trilemma, which posits that scalability, security, and decentralization cannot all be achieved simultaneously without compromise. In response to the growing demand for web3 applications, Ethereum prioritizes security and decentralization, often at the expense of scalability. The transition from Proof of Work (PoW) to Proof of Stake (PoS) with Ethereum 2.0 has alleviated some of the congestion and improved throughput, yet transactions per second remain limited, and gas fees can still become prohibitively expensive during peak usage times.

The Rise of L2s and L1 Alternatives

The scalability challenges of Ethereum have catalyzed the emergence of Layer 2 (L2) networks like Polygon, Optimism, Arbitrum, and Starknet, as well as alternative Layer 1 (L1) blockchains such as Solana, Avalanche, and Cosmos, aiming to provide faster and more cost-efficient transaction solutions.

L2 solutions enhance Ethereum's scalability by operating on top of the L1, utilizing off-chain scaling techniques, and employing rollups—both optimistic and zero-knowledge—to bundle transactions, thus reducing demand on Ethereum's resources. These advancements have significantly improved transaction throughput and lowered costs, although they face ongoing challenges such as network congestion, fee variability, and concerns over sequencer centralization. The blockchain community continues to innovate, addressing these issues to refine and bolster the ecosystem's efficiency and decentralization.

L3 Solutions: Elevating Customization and Efficiency to On Top of Layer 2’s

The emergence of Layer 3 (L3) networks marks a leap forward in the blockchain tech stack, by offering a specialized ecosystem tailored for distinct applications that demand bespoke solutions and optimizations beyond the capabilities of Layer 1 (L1) and Layer 2 (L2) frameworks. L3 networks are designed with a focus on deep customization, enhanced cost efficiency, and improved accessibility, catering specifically to the intricate requirements for specific verticals of l applications.

Several compelling reasons make a custom L3 chain a great choice for many projects, and Arbitrum Orbit is a flexible solution that can meet the needs of any project looking to build its chain in the Ethereum ecosystem:

• Ethereum alignment. Finality is secured by the integrity of Ethereum

• Dedicated blockspace. Gain independence from chain usage by other applications

• Custom gas token. Choose which token is used for chain fees allowing you to create native economies and utility incentives

• Native account abstraction. Go beyond Ethereum’s account abstraction

• Alternative data availability layer choices. AnyTrust, Celestia, and more data availability solutions are already integrated into Arbiturm Orbit

• Compatible with forthcoming Arbitrum Stylus, allowing for additional gas savings and development in Rust, C, and C++, in addition to EVM-compatible Solidity

• Arbitrum technology. As Arbitrum continues to improve and upgrade its technology, all projects building on Arbitrum also upgrades

Building RARI Chain

At RARI Foundation, we believe in a future where a sustainable creator economy is built on-chain, with millions of users, creators, collectors, builders, and brands contributing to this ecosystem and bringing forth innovations in NFT use cases.

When considering building RARI Chain, several parameters were weighted and taken into consideration to determine the most optimal setup:

Scalability

RARI Chain was designed for high performance, boasting an impressive block time of 0.25 seconds. This rapid processing capability is pivotal for scaling the ecosystem to accommodate a vast number of transactions simultaneously, ensuring a seamless experience for users and creators alike.

Consumer NFT Applications

Fast transaction speeds allow for web2-like consumer experiences with NFTs, supporting instant updates, real-time digital achievements, and seamless transactions in consumer-facing applications.

NFT-Fi Applications

The RARI Chain's 0.25-second block time & cheap gas fees expands NFT finance (NFT-Fi) by enabling instant transactions, such as real-time loan approvals or dynamic interest adjustments, making NFT-Fi markets more responsive compared to L1 experiences.

Enhancing NFT Minting and Trading

Near-instant block times facilitate live NFT launches and real-time trading, enabling flash sales and time-sensitive auctions, thus ensuring a fluid and responsive market for digital assets.

Cost Effective

The affordability of transactions on RARI Chain addresses one of the significant barriers seen in the last bull market: prohibitive gas fees on Ethereum's L1. These high costs excluded many potential users from engaging with NFTs, limiting the ecosystem's growth and diversity.

By significantly reducing transaction costs, the RARI Chain opens up the NFT market to a broader audience, allowing for a wider range of use cases and enabling more people to participate in and benefit from the NFT economy. This approach not only democratizes access to NFT experiences but also fosters a more vibrant and inclusive ecosystem, supporting the Rari Foundation's vision of a sustainable creator economy.

Customization

RARI Chain's node design epitomizes the original vision of NFTs by prioritizing the compensation of creators through an innovative royalty mechanism. This mechanism is a testament to the RARI Foundation's commitment to ensuring that creators are fairly rewarded for their contributions to the digital art world.

Customization and Royalty Enforcement

The RARI Chain introduces a sophisticated layer of customization directly addressing royalty payments:

Royalty Enforcement Mechanism

A proxy is set in front of the sequencer to scrutinize transactions for royalty payments. If a transaction fails to fulfill its royalty obligations, it's automatically discarded, ensuring that only transactions complying with royalty requirements are processed. This guarantees creators receive the royalties due to them, preserving the integrity of the creator economy.

Defining an NFT Sale and Proper Royalty Payment

The chain employs a detailed approach to identify NFT sales, leveraging comprehensive transaction logs. This process meticulously checks for the transfer of NFTs and corresponding payments, adhering to the ERC-2981 standard for royalty calculations, ensuring a transparent and equitable process for determining and distributing royalties.

Royalty Scenarios

The customization extends to cover various scenarios within the NFT lifecycle:

NFTs Minted and Kept on RARI Chain

Royalties are set at the minting phase and are rigorously enforced at the sequencer level, providing a seamless experience for creators.

NFTs Minted Elsewhere and Bridged onto RARI Chain

These NFTs can have their royalties set on RARI Chain through associated marketplaces or ERC-2981-compliant interfaces, ensuring that creators are compensated regardless of the NFT's origin.

NFTs Minted on RARI Chain and Bridged Out

Even when NFTs leave the RARI ecosystem, their royalty parameters remain intact, ensuring that creators continue to receive royalties when their work is traded on other platforms that respect these parameters.

Resource Efficient

The RARI Foundation must always consider the best interest of the DAO and its resources, so the fiscal and technological investment in establishing an independent L1 or L2 network clashed with the DAO’s interest. Such endeavors require substantial investments not only in terms of financial resources but also in technological development and ongoing maintenance.

The Foundation's primary goal has always been to ensure that any development or expansion of our NFT infrastructure does not compromise the long-term viability of the DAO and the broader community it supports.

In this context, opting for an L3 solution emerged as the most feasible and strategic choice.

Dive into our documentation to join us on RARI Chain, or mint some of our creators' drops on RARI.