- 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
- Strengthen SuperRare’s Curation Model: Provide an elite pathway for creators to transition from an open marketplace to curated status.
- Enhance Creator Lifecycle Support: Integrate Transient’s tooling (Dynamic Art Engine, The Lab, Launchpad, AI Discovery) to empower artists.
- Boost $RARE Token Utility: Deep integration of $RARE into ecosystem functions, encouraging long-term engagement.
- 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:
- RareDAO Foundation and Transient Labs will finalize and execute the investment agreement, including the calculation of a 60-day time weighted average price (TWAP).
- RareDAO Foundation will work with the DAO Council to transfer the invested assets, as calculated in the TWAP, to Transient Labs.
- Transient Labs, RareDAO Foundation, and SuperRare Labs will collaborate extensively to manage execution of the vision and roadmap outlined above.