Proposal: A New ERC - Universal Asset Signing

Listen to our proposal as a rap: Universal Asset Signing ERC -RARI Proposal - YouTube

Dear Rari members,

Our team composed of myself Rito Rhymes (dox: Matthew Pellerito; multi-media NFT artist, M.S. in HCI from DePaul), and William Entriken (known as the lead author of ERC721 / the father of mainstream NFTs) are excited to present a proposal for a new ERC!

We propose to extend the existing ERC-721/1155/20 standards with a new approveForAllWithSignature function. This new function will allow tokens to seamlessly connect to any marketplace/wallet using only a signature, reducing the cost & friction of connecting to a new marketplace.

## Motivation

The current process for connecting to a new marketplace can be expensive and time consuming. Sellers must pay a one-time “approval” transaction PER token PER marketplace for listing a token. This means getting started on a new marketplace can be very expensive, and therefore there is a strong network effect and moat around whichever marketplace is largest.

The proposed approveForAllWithSignature function would reduce the cost and time of connecting to a new marketplace by requiring a mere signature as opposed to a completed transaction.

Global fees are also high based on network congestion, reducing the number of transactions involved to enact the same activities taking place will help stabilize gas fees for everyone (this ERC would combine the transactions for listing and buying assets into a single one).

## Rationale

Increased adoption: By reducing the cost and friction of connecting tokens to Rarible’s marketplace, more users would be likely to choose Rarible as a platform for trading their NFTs and other tokens. This would help Rarible grow its user base and increase its overall adoption.

Competitive edge & leadership: As a marketplace that supports the approveForAllWithSignature function, Rarible would offer an initial unique selling point compared to other marketplaces that do not support this standard. This feature could attract users who prioritize lower gas fees, faster onboarding, and flexibility when connecting their tokens to a marketplace and as other marketplaces adopt it, Rarible will be known for having pioneered it and will be looked towards for innovations in the future.

Improved user experience: The reduced friction and cost of connecting tokens to the Rarible marketplace would lead to a better overall user experience, making users more likely to continue using Rarible in the future and recommend it to others.

Reduced network effect of dominant marketplaces: The proposed function would help level the playing field for Rarible by reducing the network effect and moat around dominant marketplaces. This would make it easier for Rarible to compete with larger platforms (OpenSea), enabling it to capture a greater share of the market.

Lower gas fees: Globally speaking, reducing total transactions in the network (removing the approval/listing asset transaction) without actually reducing activity taking place helps stabilize gas prices and makes the system more efficient. Locally, it reduces gas fees for token sellers on Rarible listing an asset down to 0. The estimated pennies more in gas fees for buyers to purchase the asset may be offset by the reduced congestion in global gas fees especially as adoption scales. Overall the marketplace costs spent in gas fees is fewer in total and thus saves users more money they could otherwise spend on purchases.

No backdoor vulnerabilities: Similar solutions involve utilizing a backdoor for tokens to be allowlisted which opens up all sorts of vulnerabilities, but our method does not utilize a backdoor and so sidesteps the risks involved.

By supporting the approveForAllWithSignature function, Rarible would position itself as an innovative and user-centric platform that prioritizes efficiency, cost-effectiveness, and flexibility. This would likely lead to increased adoption, a competitive edge, and an improved user experience, ultimately benefiting Rarible in the long run.

## Alternatives considered

Another simple way to get token creators to support new marketplaces is to ask them to “allowlist” the marketplace which will enable the asset to be listed in that marketplace for free once created. This is also called a backdoor.

There are numerous problems with this approach. First the original token creator is expected to know all marketplaces they want to approve, and they are expected to be able to audit them.

Next, the token creator is unable to approve marketplaces or new versions that don’t exist yet.

And lastly, if the marketplace has a vulnerability or unexpected features then every token with that backdoor will also have that problem. For example, OpenSea’s Shared Storefront was published with a large undocumented backdoor where they can seize anybody’s assets. Whoops! Does OpenSea Shared Storefront have a backdoor? – William Entriken Blog This proposal on Rari is proposed by a team with the same person that discovered/published that vulnerability/backdoor.

This proposal on Rari allows the token owners to decide which marketplaces they want to allow and this is better than the backdoor approach given its versatility and sidestepping of vulnerabilities associated with said backdoors.

## Budget

Total: 33,000 $RARI

Distribution: William Entriken 75% + Rito Rhymes 25%

## Specifications

  1. Draft an ERC standard extending ERC-721, ERC-1155 and ERC-20 with this new functionality. This is similar to how ERC-2981 NFT Royalty Standard extends ERC-721 and ERC-1155. A contributing member of Rarible’s engineering team is invited to be coauthor on this paper.
  2. Publish reference implementations for ERC-721, ERC-1155 and ERC-20 token conforming to this new standard.
  3. Publish documentation for token creators to explain this extension.
  4. Publish documentation for token buyers/sellers to explain this extension.
  5. Publish documentation for marketplace operators to explain this extension.
  6. Development and progress will be shared on the Community Service Hour weekly call. This is live each week through Twitter Spaces + Twitch and is syndicated to YouTube, Apple Podcasts and Spotify Podcasts. William Entriken, Portfolio

## Timeline
We estimate a 2-month period where we cyclically move through the steps of drafting, building, testing, gathering feedback, iterating, documenting until finally publishing the ERC and final documentation with an operational version ready for implementation.

## Payment Milestones
Apportioned in 3 installments of 11,000 $RARI.

  1. Upfront upon approval of the proposal to begin working on the ERC.
  2. Upon the first successful testing of the code for the digital signing of an asset.
  3. Upon a tested and operational version of the ERC being ready for implementation.

## Bonus
Rito Rhymes will create fun laymen-centric raps for the documentations targeted at token creators and buyers/sellers to help spread awareness and enhance digestibility of the functions and benefits involved that Rari will be leading in usage and adoption.

Any and all are welcome to attend and ask questions regarding this proposal in the weekly community calls with William Entriken taking place every Tuesday at 6PM EST by joining the Twitter spaces hosted by his profile @fulldecent .

I fully endorse the concept behind this proposal. In the ongoing struggle for block space, it is significant for Rarible to take the lead in developing a new standard that has the potential to reduce fees. As a comprehensive protocol standard, it could seamlessly adapt to other Layer 2 solutions that Rarible currently supports or may support in the future. My primary concern at this juncture is wallet compatibility; however, I believe that if a prominent NFT marketplace such as ours generates sufficient demand, the value proposition would be too substantial to overlook.

I wanted to drop some of the commentaries from the call here!

Generally, all attendees were excited about this new ERC standard and helping to bring it to life. A potential concern was the horizontal reach and creating a network effect. If Rarible is the sole adopter of this standard it may be slow and challenging to find the market fit. So having some more folks on board, e.x. Manifold, would assist in pushing the narrative around this.

My personal question would just be if we feel that $50k is fair for this work and project.