Zora is transforming the non-fungible token (NFT) landscape by putting creators at the center of its marketplace. Founded in 2020 and officially launched on the Ethereum blockchain in January 2021, Zora empowers artists and designers to earn a fair share of the resale value of their work through royalties collected on NFT resales. This approach sharply contrasts with other NFT platforms like OpenSea and Blur, which are moving away from mandatory resale fees.

A Creator-Centric Marketplace

At its core, Zora is an NFT marketplace built to serve artists and creators. It functions not only as a platform for buying and selling NFTs but also as a registry for media provenance, ensuring that artists can collect royalties seamlessly. The platform emphasizes community building and fosters direct interactions between creators and collectors, thereby eliminating intermediaries that often dilute the value received by artists.

Empowering Artists Through Royalties

Zora’s mission is to alter the narrative surrounding artist compensation in the digital art space. By implementing a system where fees are collected upon the resale of NFTs, Zora ensures that creators continue to benefit from the increasing value of their work over time. This model stands in stark contrast to traditional marketplaces, where artists typically receive payment only upon the initial sale.

Community-Driven Value Determination

One of the distinguishing features of Zora is its open-sourced, admin-free Auction House. Here, anyone can run their own curated auction houses for NFTs. Curators approve auctions before they commence and can charge a curator fee, fostering a decentralized market dynamic where the community determines the value of digital art rather than algorithms or centralized entities.

Core Team:

Zora was founded in 2020 by a team entirely originating from Coinbase: Dai Hovey, Dee Goens, Ethan Daya, Jacob Horne, Slava Kim, and Tyson Battistella. However, in the following years, Dai, Ethan, and Slava left the founding team of Zora.

• Co-Founder: Dee Goens - Former Marketing Manager at Coinbase
• Co-Founder: Tyson Battistella - Former Software Engineer at Coinbase
• Co-Founder: Jacob Horne - Former Product Manager at Coinbase
• Board Member: Steve Jang - Founder & Managing Partner at Kindred Ventures, Forbes VC Midas List ‘23, ‘24, Angel Investor in Uber, Coinbase

Zora Funding Insights - Total Raised: $60.00M (Valuation: $600.00M)

Funding Rounds:

• Seed Round: Date: 3 Oct 2020 | Amount Raised: $2.00M \
  Selected Investors: Kindred Ventures (Lead), Coinbase Ventures, Trevor McFedries, Alice Lloyd George, Jeff Staple
• Undisclosed Round: Date: 1 Apr 2021 | Amount Raised: $8.00M \
  Investors: Paradigm
• Undisclosed Round: Date: 5 May 2022 | Amount Raised: $50.00M \
  Selected Investors: Haun Ventures (Lead), Coinbase Ventures, Kindred Ventures

The Zora Network

To address scalability, speed, and cost issues inherent in blockchain transactions, Zora introduced the Zora Network—a fast, cost-efficient, and scalable Layer 2 solution built specifically for NFTs. While many Layer 2 networks are DeFi-centric, the Zora Network is designed with an NFT-first approach.

Technical Specifications

• Speed and Cost Efficiency: Transactions on the Zora Network confirm in seconds, and minting an NFT costs less than $0.50.
• Layer 2 Solution: Secured by Ethereum and powered by the OP Stack, the Zora Network leverages optimistic rollups to achieve scalability without compromising security.
• Decentralization: Although Zora deployed the Zora Network software, it does not operate the network itself, aligning with the principles of decentralization.

Fees and Revenue Model

Zora has implemented a transparent and rewarding fee structure to benefit creators, developers, and other participants in the ecosystem.

Minting Fees

• Standard NFTs Priced in ETH: A minting fee of ✧111 Sparks (0.000111 ETH) per NFT is charged.
• NFTs Priced in Alternative Tokens: A fee of 5% of the listed purchase price is applied.
• Fee Transparency: Minting fees are clearly displayed to collectors before confirmation, ensuring transparency in transactions.

Rewards Distribution

Zora’s protocol rewards are designed to incentivize various participants:

• Creators: Receive all proceeds from paid mints and a minimum of 42.9% of mint fees from free mints.
• Developers: Earn rewards for creating and curating decentralized applications (dApps) on the platform.
• Referrers: Users who invite others to the platform or share mint links can earn a share of the mint fees.

Fee Breakdown Examples

• Standard Rewards: In a typical transaction, the mint fee is split among the creator, referrers, and Zora.
• Alternative Tokens: For NFTs priced in tokens other than ETH, creators receive 95% of the mint price, with the remaining 5% allocated to fees and rewards.

Community Engagement and Governance

Zora places a strong emphasis on community involvement:

• Direct Interaction: By facilitating peer-to-peer transactions, Zora removes intermediaries, allowing for direct engagement between creators and collectors.
• Value Determination: The community has the autonomy to set and negotiate the value of NFTs, fostering a fair and decentralized marketplace.
• Governance: Users can participate in governance decisions at the protocol level, influencing the development and operation of the network independently of the Zora marketplace.

Developer Ecosystem

Zora provides robust tools and protocols for developers:

• Smart Contracts: Developers can interact with Zora’s smart contracts to build their own applications for NFT minting, pricing, and trading.
• APIs and Toolkits: Comprehensive APIs and creator toolkits are available to facilitate the development of new platforms and services on top of the Zora Network.
• Incentives: Developers are rewarded for enhancing the Zora protocol and contributing to the ecosystem’s growth.

The Genesis of Zora Network: Bringing Imagination On-Chain

According to CEO and Co-Founder Jacob Horne, the Zora Network was built to bring “imagination” on-chain. This vision involves integrating artistic and creative expression into the NFT industry, thereby connecting creators and collectors in a more meaningful way.

Appchain Functionality

• Purpose-Built Layer 2: The Zora Network functions as an appchain tailored to support Zora’s NFT minting and marketplace protocols.
• Stand-Alone Capabilities: While it complements the Zora Marketplace, the Zora Network can also serve as an independent Layer 2 blockchain solution for various decentralized finance (DeFi) activities.

Operational Dynamics

• NFT Minting and Pricing: The network utilizes smart contracts to enable fair and transparent pricing mechanisms based on demand and supply dynamics.
• Interoperability: NFTs minted on the Zora Network can be traded on other platforms, such as OpenSea, enhancing the liquidity and reach of creators’ works.
• Scalability and Speed: By operating as a Layer 2 solution, the network achieves higher transaction speeds and lower costs without sacrificing security.

APP & Sparks

On September 10th, Zora announced on Twitter the launch of their new app, introducing several major upgrades. The app offers a seamless experience with no need for app switching, pop-ups, bridging, or gas fees. Users can now double tap to mint, post for free, sync with Farcaster, and withdraw funds directly to Coinbase.

To enhance accessibility and simplify transactions, Zora introduced Sparks (✧)—a new unit of Ethereum designed to make pricing and transacting in ETH more intuitive. One Spark is equal to one-millionth of an ETH, meaning 1 ETH equals 1,000,000 Sparks.

Key Metrics (October 3, 2024)

NFTS MINTED: 15m | TOTAL CREATOR REWARDS: 3,553 ETH (~ 9,150,000 USD)

COLLECTORS: 2m+ | CREATORS: 426k

Number of accounts - 1,138,617

Total Transactions on Zora Network (Total - 67,691,105)

Daily Active Adresses

Number of contracts (Cumulative contract growth over time)

Total Value Locked (TVL)

Links:

1. https://zora.co
2. https://bridge.zora.energy
3. https://explorer.zora.energy
4. https://docs.zora.co

Sources:

1. https://cryptorank.io/ico/zoraco#funding-rounds
2. https://dune.com/sealaunch/zora-network
3. https://app.artemis.xyz/
4. https://l2beat.com/scaling/projects/zora

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