SIP | Strategic Partnership Between SuperRare and Transient Labs to Energize Ecosystem

Governance Proposals Approved
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  • Author: @chrisTL (Transient Labs)
  • Status: Approved
  • Type: Treasury Management
  • Implementer: RareDAO Council & RareDAO Foundation
  • Sponsors: @Emma, @flakoubay
  • Proposal link: Snapshot
  • Created Date: January 28, 2025

Note: The text of this proposal has been updated substantially (2/26/2025) to reflect feedback received from the RareDAO Council. More detail was added on deal terms and specific benefits to the DAO. The previous version is still accessible in the edit history of this post.

Summary

This proposal seeks RareDAO’s approval for a strategic investment in Transient Labs, securing approximately 10% ownership in the company. Through this partnership, Transient Labs will enhance the creator tooling and technology stack for the SuperRare ecosystem, replacing SuperRare’s existing minting infrastructure and integrating advanced creator-centric solutions. This collaboration positions the DAO for long-term growth by expanding revenue streams beyond marketplace transactions and strengthening the utility of the $RARE token.

Background

Transient Labs is provides the most advanced suite of creative tools for digital artists, projects and brands. Since its founding in 2021, Transient has helped creators generate more than $70M in revenue, driven millions of on-chain transactions, launched more than 250 projects in partnership with the biggest names in the space including Deekay Motion, Joe Pease, Ripcache, All Seeing Seneca, Die With the Most Likes, SHL0MS, Karborn, and many, many more. Transient and SuperRare have a long history of productive partnership. Transient contracts were first to be indexed on SuperRare, Transient has supported and run SR Spaces, assisted with curation and marketing SuperRare artists, and Transient was responsible for the build, implementation and launch of the RARE Pass. More information can be found here: About | Transient Labs

Motivation

SuperRare’s strategic commitment toward a highly curated marketplace requires an ecosystem that fosters long-term, value-driven art. By partnering with Transient Labs, SuperRare will be able to offer a seamless creator journey from imagination to curation. This initiative directly addresses:

  • The need for sophisticated, sovereign creator tooling and infrastructure.
  • The demand for a meaningful, quality-driven cryptoart experience.
  • Diversification and expansion of the DAO’s revenue
  • Increased surface area for $RARE utility within the ecosystem.

Goals & Objectives

  1. Strengthen SuperRare’s Curation Model: Provide an elite pathway for creators to transition from an open marketplace to curated status.
  2. Enhance Creator Lifecycle Support: Integrate Transient’s tooling (Dynamic Art Engine, The Lab, Launchpad, AI Discovery) to empower artists.
  3. Boost $RARE Token Utility: Deep integration of $RARE into ecosystem functions, encouraging long-term engagement.
  4. Increase Platform Awareness and Adoption: Strategic community growth and targeted market positioning.

Specification

Upon passage of this proposal, RareDAO will make an investment in Transient Labs, acquiring an equity stake without altering its governance structure. The DAO will not assume new operational responsibilities; rather, this partnership ensures that SuperRare artists have access to the most advanced tooling available in the cryptoart space.

Financial Overview

If approved, the following parameters will be used to execute an investment agreement between Transient Labs and the RareDAO Foundation:

  • $2.5M equivalent investment, paid in $RARE (price calculated by a TWAP) into Transient Labs, Inc. as a SAFE 2 amounting to a ~10% ownership stake
  • 51% / 49% (TL / DAO) protocol fee split up to $5M cumulative revenue paid to the RareDAO community treasury
  • Limits on diversification / distribution of invested tokens as negotiated by RareDAO Foundation on behalf of the DAO to limit sell pressure
  • Conversion to equity upon Series A or qualified financing.
  • Licensing agreement for Transient-developed IP to be used across platforms.

What this means for the DAO:

  • No governance changes: The DAO remains fully independent, with Transient Labs operating as a service provider and strategic partner.
  • A seamless transition: With SuperRare’s focus on curation and Transient Labs’ world class tooling artists will be fully supported at every stage of their journey.
  • A deeper creator ecosystem: Through Transient Labs, artists will have access to tools that span the entire creator lifecycle—from ideation and design to minting and sales—while SuperRare continues as the premier curated marketplace.
  • Operational collaboration: The SuperRare and Transient Labs teams will work closely to provide ongoing creator support, enhanced curation, and discovery features.
  • Expanded creator roles: This partnership introduces new roles for creators, allowing them to utilize advanced tooling and progress through their artistic journey with greater support and resources.

The Reimagined Flywheel

SuperRare’s traditional flywheel has been centered on curation leading to marketplace sales. With this partnership, the ecosystem evolves into a fully integrated creator lifecycle, enabling sustainable, long-term value creation.

1. Creators enter the ecosystem via Transient Labs’ tooling.

  • Artists build, ideate, design, mint, and sell using the most advanced tools in the space.
  • Transient Labs’ technology lowers the barrier for new creators, driving more on-chain activity.

2. Enhanced curation and discovery.

  • SuperRare remains the most exclusive curated platform, now with direct access to the strongest emerging talent.
  • Transient Labs enables deeper artist discovery, allowing creators to progress toward SuperRare’s curated marketplace.

3. Increased sales, transactions, and protocol fees.

  • With more artists minting and progressing through the ecosystem, overall sales volume and collector engagement grow.
  • A broader range of on-chain activity generates continuous protocol fees that flow into the DAO.

4. Value flows back to the DAO and $RARE holders.

  • Smart contracts ensure that a portion of all revenue generated through the ecosystem is allocated to the DAO.
  • New on-chain activities create a more vibrant ecosystem, driving more interaction and usage of $RARE within the platform.

5. Growth in creators, collectors, and market awareness.

  • More creators join the ecosystem, more artists reach the curated level, and more collectors engage, strengthening the SuperRare brand.
  • This flywheel reinforces itself, continuously expanding the network and revenue base.

Roadmap & Milestones

Phase 1: Q1 2025

  • Finalize integration of Transient tooling into the RARE ecosystem.
  • Partnership announcement and marketing push.
  • Launch token incentive mechanisms.

Phase 2: Q2 2025

  • Onboarding creators and collectors through joint marketing efforts and product launches.
  • Implementation of AI discovery and curation mechanisms.

Phase 3: Q3-Q4 2025

  • Scaling marketplace adoption.
  • Hosting major events and exhibitions to drive awareness.
  • Exploring additional collaborations and monetization avenues.

Benefits

This investment fundamentally enhances RareDAO’s financial sustainability and strengthens the $RARE token economy. Unlike traditional NFT marketplaces that rely solely on transaction-based revenue, Transient Labs’ model generates protocol fees across multiple stages of the creator lifecycle, offering a diversified and resilient revenue stream.

  • Expanded revenue model: Transient Labs introduces revenue streams beyond sales, including minting, auctions, smart contract interactions, and other on-chain activity.
  • Automated fee distribution: A smart contract-based protocol fee split will ensure that a portion of revenues flows back to the DAO treasury automatically, creating a continuous source of funding.
  • $RARE token utility: By diversifying revenue and adding new value capture mechanisms for the DAO, along with ongoing changes to the US regulatory environment, the surface area for token utility experiments like the first iteration of $RARE Staking is significantly increased.
  • Resilience in a shifting market: Given the market’s downturn, shifting towards a diversified revenue model ensures the DAO’s ability to sustain operations and growth beyond just marketplace transactions.

By integrating Transient Labs’ technology, RareDAO secures a more sustainable, diversified financial model that aligns with the long-term growth of cryptoart.

Projected ROI:

  • Increased transaction volume and engagement.
  • Strengthened brand positioning as the leading cryptoart ecosystem.
  • Protocol Fee payouts to the DAO
  • Higher $RARE adoption and value accrual.

Drawbacks

Investment Risk: Acquiring equity in Transient Labs involves financial risk, including the potential for loss if Transient Labs does not achieve projected growth.

Coordination overhead for SRL & Transient Labs: Increased collaboration between SuperRare Labs and Transient Labs engineering teams presents possible challenges in coordination, though due to the familiarity of the teams and shared incentive to drive value to the $RARE ecosystem, this is not expected to pose any significant challenge

Dependency on Partner’s Success: RareDAO’s success in this initiative is partly tied to Transient Labs’ ability to deliver and innovate, creating a dependency on their performance.

Potential Governance Complexity: Although the governance structure remains unchanged, the partnership may introduce new layers of decision-making and operational collaboration that could complicate governance processes.

Implementation

Upon passage of this proposal:

  1. RareDAO Foundation and Transient Labs will finalize and execute the investment agreement, including the calculation of a 60-day time weighted average price (TWAP).
  2. RareDAO Foundation will work with the DAO Council to transfer the invested assets, as calculated in the TWAP, to Transient Labs.
  3. Transient Labs, RareDAO Foundation, and SuperRare Labs will collaborate extensively to manage execution of the vision and roadmap outlined above.
4 Likes
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Quite an exciting SIP! Looking forward to all the discussion around this.

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Hey @ChrisTL Thanks for the in depth and novel proposal. As a governance nerd, I am very interested in seeing how this can be structured, and am optimistic that this could provide value for the ecosystem, though obviously with a proposal of this magnitude there is still some opportunity for due diligence to make sure we are doing right by the community.

As such, we’ll be reaching out offline to discuss with you in further detail, while simultaneously scoping legal strategy from the Cayman Foundation perspective.

I look forward to seeing how this evolves!

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RareDAO Foundation has thoroughly reviewed the proposed SAFE agreement and ensured that the revenue share mechanics described in the SIP are adequately defined. We’ve also reviewed the business strategy of this proposal and believe that its passage would be in the Community’s best interest. While this proposal is ground breaking as an act of DAO governance, both for RareDAO and the industry as a whole, we are confident that it will not pose significant legal risk if adopted.

All of that said, we believe that this is ready to proceed with council sponsorship and a community vote.

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Sounds very exciting and a good partnership. What was Transient’s YoY revenue? What is the investment amount you are requesting from SR for 10% equity?

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I’ll let Transient speak to the revenue question, but the investment amount is proposed to be $2.5 million worth of $RARE, with exact token quantity calculated as a 60 day TWAP

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If the proposed investment amount is 2.5m worth of $RARE. Then this should be done timingly when there is market recovery (for exemple between 25 and 50 cents at minimum). I personally don’t think going through this proposal at <30 cents/RARE is a good idea at all.

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$1.1mm, $1.6mm, $1.0mm ((2022, 2023, 2024 respectively). Projected revenue for 2025 is $2.1mm.

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I think our perspective is that to get back to the numbers you’ve outlined here, there will need to be more than a market recovery. We believe this relationship should be a catalyst for price appreciation, and if the market does show signs of strength, this integrated effort gives us even more potential upside.

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I do disagree with your thoughts that a strong market recovery and strong catalyst is needed to see those prices. We saw rare rise from 0.05 to 0.3 few months ago all of this while market was and still down for altcoins and those kind of things should be taken in account to rise that amount of money. Another possibility is that this investment could be done partly in ETH rather than in RARE. hypothetically, if the deal goes through, what would happen to the 2.5m in $RARE which represent around 44 millions RARE with current price. Would they be sold on open market? If that’s the case a threshold limit order could be implemented (250k @0.15 250k @0.175 250k @0.2 etc…) and project could move on once the the full amount is reached. To be clear I’m against the idea of using 44m RARE at current price but I like the idea.

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Typically, we would not do an equity deal for tokens, but in this case, we felt the mutual benefit of both parties working together presented enough upside for this to make sense. Our goal is to hold the RARE, but in the event there is a need to liquidate tokens, there are guardrails built into the agreement that limit the amount of RARE that can be sold on a monthly basis ($150K maximum per month). We also have a relationship with GSR so that if/when RARE needs to be sold, we do that with minimal chart impact. Hope this is helpful.

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There is too much upside for rare in current market condition to make a deal in RARE at curent market price.

$RARE will probably be worth multiple time the current price(x5+) in a matter of months in those market conditions. Meaning that those 2.5m in RARE approx 42m RARE at current market price could/will be worth easily 10m + in a matter of months.

Having an entity other than the DAO holding that amount of RARE is a danger to the protocol itself.

I suggest making changes and do that deal in USDT by selling a mix of ETH and RARE as previously explained xRARE @0.15 ; x RARE @0.20, etc, until the 2.5m amount is reached

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As a RareDAO council member, I sponsor this SIP.

This is a very exciting opportunity to team up with a project with a similar north star to SuperRare. Giving artists the creative tooling they need to have maximum flexibility over their work is a great way to serve the creator community while also ensuring that SuperRare remains the premiere destination for the minting, and therefore collecting, of onchain art.

Innovation has always been at the heart of SuperRare, so stepping forward towards a future that involves more advanced creation, curation, and discovery with AI is a natural next step.

Looking forward to seeing this come to life.

1 Like
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I’m really excited to sponsor this proposal as a member of the RARE DAO Council because it represents exactly what I believe RareDAO should be doing—building tools that serve the entire ecosystem, not just one platform. The partnership with Transient Labs is a major step toward strengthening the creator journey, fostering deeper connections, and expanding the utility of $RARE in a way that truly moves the space forward. Investing in advanced tooling and infrastructure means we’re not just supporting artists today but shaping a more sustainable, innovative future for cryptoart. This is the kind of collaboration that makes Web3 special, and I’d love to see it happen.

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I think this partnership makes a lot of sense. Transient Labs has been a strong collaborator and contributor to the ecosystem, and deepening that relationship while expanding $RARE’s utility is a smart move for the ecosystem. Investing in better tooling for artists strengthens both SuperRare and the broader cryptoart space—Looking forward to seeing this take shape!

2 Likes
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Transient Labs has been very active. I have attended in person their thoughtful exhibitions in NYC and Miami. Their toolset is smart, and intuitive. I have collected artwork, and continue to produce artwork on their platform. They are very active in writing about artist’s artwork and sharing. I would welcome their innovation and toolset.

With regards to a transition to a “Highly curated marketplace”, you would notice that this approach, which is a failed traditional approach (and against decentralized concepts which cryptoart is built upon by countless individuals, artists, designers, engineers, techs, trads, trolls and all of the above) has not bode well for the entire ecosystem. Art, which is a main driver of culture and value deliver has become less abundant, and in return Ethereum has lost almost half of its marketshare in the past 3 months. High profile sales have not lifted all boats, and in return have only lined the pockets of a few, divided the community and created opportunities for politicians whereas many beautiful works of artwork get lost in the noise of the attention economy. Highly curated shows are not selling, but having the opposite effect where individuals show up for glam pics on instagram, and end up not actually using the blockchain or collecting any of the beautiful artwork.

A longer game method and a path to larger successes would be to brainstorm and implementing steps on making things more inclusive, rather than curated and divisive.

Pce N :sparkling_heart: BCA

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From ChrisTL own words: There is « myriad of clauses and protections in the agreement for responsible selling of $RARE» outside the maximum 150k usd they are allowed to freely dump into the market.

Would it be possible to have a list of those clauses and protections that are supposed to be in the agreement or is it blatant lie? If those exist, minimum would be to disclaim those.

From what I see there is no vesting period planned, or any other protection putted in place except the max 150k usd RARE that can be sold per monthly basis.

Thanks