CALIBRATING RESERVE RAILS
Scroll to explore the stack
Limited transaction data points lead to inaccurate, distorted price discovery mechanisms for assets. These markets are highly subject to market manipulation.
The top Auction Houses, Dealers, and (insert other title) demand predatory commission fees in the double percentile.
These assets are reserved only for the most wealthy investors; Gatekept through back-door deals, predatory 4+ year waitlists, and reputational currency.
Storage, insurance, security, and maintenance of real world assets create ongoing overhead that erodes returns and complicates processes, especially for smaller individual investors.
Issuers supply and manage the physical assets backing each collection. They hold legal title to these assets and are responsible for their custody, maintenance, and potential replacement. Issuers also set initial token prices and may provide liquidity for secondary markets. Their incentives include fees from token transactions and potential appreciation of the assets they manage.
Token Holders purchase, sell, and potentially trigger asset redemption through the protocol. They gain exposure to asset collections without the complexities of direct ownership, while retaining the ability to liquidate their positions through token sales or redemption mechanisms.
Custodians physically hold and secure the assets. While initially this role may be filled by issuers themselves, the protocol architecture allows for independent custodians to provide additional trust guarantees. Custodians are responsible for verifying asset authenticity, ensuring proper storage conditions, and facilitating inspections or audits.
Rarity Protocol accomplishes token → asset parity through a series of on-chain incentives, proof-of-reserves, and off-chain architecture for token → asset liquidation/redemption.
Asset-Issuers earn fees proportional to the size of their Vault Supply and are incentivized to be the primary market-makers and continuously grow their Vault TVL
If asset-issuers act maliciously, they undergo a reputation slashing event
Issuers/Custodians must provide adequate proof of reserves that show they are safely maintaining, insuring, and market-making their issued token.
Proof of custody
Photos of asset condition, third party appraisal, serial number, reference number, titles
On-chain receipt of legal transference of asset to token holders
Limit-order buyback for token re-acquisition
Specification uploaded on-chain
Reputation Token Staking required
Token issuers have many responsibilities. The team has built a robust Issuer UI/UX that allows non-defi native issuers to use many strategies in order to earn even more yield on their tokens.
The ability to "buy-back" Issuer tokens at cheaper prices than ITO event
Supply expansion + contraction mechanisms
Users now have access to previously restricted, high-yield assets with intrinsic value. Commission fees, maintenance costs, and asset-sourcing are all abstracted away and they can now trade, market-make, lend, borrow, and even leverage these assets. The possibilities are endless.