SIP | Deploy Liquid Editions to Base

Governance Proposals
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  • Author: Brennan Mulligan (General Manager, RareDAO Foundation)
  • Status: Sponsored
  • Type: Protocol Development
  • Implementer: RareDAO Foundation
  • Sponsors: Charles Crain
  • Proposal link
  • Created Date: November 26, 2025

Background & Motivation

This proposal requests DAO approval to deploy and activate a new “Liquid Editions” contract suite for fixed supply editions tokenized as an ERC-20 with built‑in liquidity and fee routing.

Liquid Editions let creators launch fungible tokens associated with an artwork that trade directly against an on-chain pool deployed to Base. Every trade automatically shares fees with creators, the protocol, and optional referrers (e.g. front end from which the transaction is being made), while also driving a continuous buy‑and‑burn pipeline for $RARE. The goal is to:

  • Add a new edition format that is simple for collectors (one-click buy/sell) and attractive for creators (ongoing revenue from secondary trading),
  • Lower the barrier to collect (buy any amount, not a whole NFT)
  • Make $RARE an integral part of the product by routing a portion of all Liquid Edition fees into automatic RARE burn.

In effect, Liquid Editions create a structural link between marketplace activity (creator drops, collector trading) and long‑term $RARE tokenomics via continuous on‑chain burn.

Specification

The github repository for this system is open source, audited and can be found here. At a high level, the system introduces a small set of modular contracts that work together:

  • A factory contract (the LiquidFactory) that the DAO controls. It is responsible for creating new edition tokens and holding the global configuration for where fees go and how they are split between creators, protocol, referrers, and the RARE burn.
  • A per‑edition token contract (each Liquid token). Each edition is an ERC‑20 with built‑in buy/sell functions that talk to its own liquidity pool. On every trade, the token contract takes a small fee and routes it according to the factory’s configuration, while also being able to harvest market (LP) fees from the pool.
  • A dedicated RARE burn module (RAREBurner). This contract receives the “burn” share of fees in ETH, swaps that ETH into $RARE, and sends the purchased tokens to a burn address, permanently removing them from supply.

Note: In addition to the per-transaction fees described below, the creator of each Liquid token will receive 10% of the token supply upon creation of the edition.

Fee Structure

From each buy/sell transaction, 3% will be taken as a fee. 25% of this fee will go directly to the creator of the liquid edition, and the remaining 75% of fees will be split between the DAO (30%), the referrer (20%, by default this is the DAO), and 50% to the RAREBurner contract.

In aggregate, on each transaction:

  • 97% will go into the pool to complete the erc-20 purchase/sale
  • 0.75% will go to the Liquid Edition creator, as an analog to existing creator royalties.
  • 2.25% will be split between referrer, protocol, and RAREBurner. At launch, this split will be configured as:
    • 1.125% will go to RAREBurner
    • 0.675% will go to the the DAO
    • 0.45% will go to a referrer address, which defaults to the DAO.

The referrer address is something which may eventually be set at the front end, allowing someone who chooses to build on top of our contracts, or perhaps, someone who shares a referral link to capture some value from the transaction. However, at launch, SuperRare.com will not be specifying a referrer address, causing a total of 1.125% of each sale to go towards the DAO Treasury.

Funds Because the DAO Treasury (superrare.eth) is only deployed on Ethereum mainnet, RareDAO Foundation shall deploy a multi-sig which receives funds from the Liquid Editions protocol on Base and bridges them back down to the DAO Treasury at regular intervals to minimize bridging costs. This wallet will hold upgrade authority, and all upgrades shall follow the established procedures for change management, including full SIPs or DAO Council proposals depending on the nature of the change and level of urgency.

Configurability

The liquid editions protocol has a limited number of configurable parameters which can be set globally across all pools, including those already deployed:

  • Allocation of the 2.25% “non-creator” fees between DAO Treasury, Referrer, and RAREBurner (e.g. 30%, 20%, 50% → 25%, 25%, 50%)
  • Recipient addresses (DAO fee accumulator, RAREBurner address, etc).
  • Operational guards like minimum order size and basic slippage limits used when converting accrued fees.
  • RARE burn routing parameters: swap route, burn address, and slippage / size limits on burn transactions.

Any updates beyond these pre-defined parameters will require a full upgrade of the contract’s implementation. We are using a proxy pattern which ensures that only new Liquid edition contracts will be effected by a contract upgrade, ensuring a degree of immutability for already deployed tokens.

Benefits

  • New creator surface area: Creators gain a simple way to launch liquid ERC‑20 editions where they share in every trade (via both trade fees and market fees), not only in the initial sale.
  • More accessible collecting: Instead of needing to afford a full, high-priced NFT, collectors can accumulate as little or as much of a Liquid Edition as they want, expanding the total addressable collector base.
  • Aligned incentives:
    • Creators are incentivized to drive trading in their own editions.
    • The protocol and referrers participate in upside from higher volume.
    • $RARE is included in every transaction through the integration with RAREBurner.
  • Modular configurability: The factory and burn parameters can be updated by governance (fee splits, recipients, burn routing) without redeploying individual editions or interrupting trading for existing tokens. Larger upgrades only impact new tokens, ensuring a degree of immutability.
  • Reusable Burn Mechanic: the RAREBurner contract has been designed to work with any revenue stream. This means that if successful within Liquid Editions, we could propose additional deployments in the future, for example, as a fee split on the marketplace contract on L1.

Drawbacks

  • Contract and integration risk: Deploying new contracts and routing fees through them adds smart contract surface area, even with audits and conservative design.
  • Economic tuning complexity: Choosing fee levels and splits (creator vs. protocol vs. burn vs. referrer) requires care; too aggressive a burn could under‑fund creators or the protocol, and vice versa.
  • UX and education needs: Liquid Editions introduce a new mental model (fungible editions with embedded liquidity and fee routing). Creators and collectors will need clear front‑end support and communication to understand how fees and burns work.
  • Operational overhead for burn routing: The ETH→RARE route and has a minor operational overhead which must be maintained.

Implementation

Upon passage of this proposal:

  • RareDAO Foundation shall deploy a multi-sig to Base which shall be responsible for fee collection and contract configuration. All fees will be transmitted to the DAO Treasury on Eth Mainnet, and all configurations/upgrades will strictly adhere to the Bylaws.
  • RareDAO Foundation will coordinate with SuperRare Labs to deploy the LiquidFactory and RAREBurner contracts, and perform all necessary post-deployment integration and configuration across contracts.
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As a council member I would like to sponsor this SIP.