Bringing Secondary Markets Onchain

Over the past two years we’ve built the largest creator tool on Ethereum. What started as a simple tool is now blossoming into a new type of social network that connects creators and collectors onchain.

Creators post their content and anyone can mint it for a period of time. Creators earn from every single one of these mints. Anyone on the internet is able to enjoy ad-free and subscription-free content because collectors have a way to support and own the content that they love. Anyone can enjoy it, but only collectors get the token.

One of the structural inhibitors of collector value and experience has been offchain secondary marketplaces. These marketplaces have led to fragmentation and low liquidity, as well as completely abandoning creator royalties. Because they are offchain, it’s also quite difficult to build a simple experience on top of them as a platform—holding them back even further. In reality, the current secondary market is more or less equivalent to no secondary market.

With this latest protocol upgrade, we pair the best in-class creator minting experience with the best in-class secondary market experience. We are doing that by bringing our secondary markets onchain with Uniswap.

When we built this, we had the following goals:

• Find a model that benefits both creators and collectors long term
• Utilize the current timed minting model
• Ability for collectors to buy and sell after a mint period ends
• Built in creator royalties (what we now call Secondary Rewards)
• Permissionless and onchain market
• Global and programmable liquidity

What we’ve made is really simple and powerful. The posting and minting experience is exactly the same as you know and love, now with a new mint fee of ✧111 (0.000111 ETH).


Here's a quick breakdown of rewards with the new mint fee.

We’ve also set the default mint duration to 3 days: short enough to capture the essence of a moment, but long enough for everyone around the world to have seen it. Anyone who is there at the time can mint. But now when the mint ends, the market begins. It’s like magic.

This is made possible by using a small percentage of the mint fee to bootstrap liquidity on Uniswap. When the mint ends, this ETH migrates to Uniswap and then the LP position is burned, with only the ability to claim fees remaining for creators.

This means that collectors have an onchain, liquid, and permissionless market that they can easily use to buy and sell at any time.

Secondary rewards: a new way for creators to earn

In 2021, creator royalties were one of the most exciting and powerful features that brought new creators onchain. When they worked, they generated millions of dollars for creators as their work was valued over time. It was devastating to see them go away at the whim of secondary marketplaces. With this new model, we are putting forward a new form of creator royalties called Secondary Rewards—they are onchain, built into each Uniswap market, and cannot be taken away.

Every time a collector buys and sells on Uniswap, the creator earns a percentage of that transaction. This means that if a creator's mint goes viral and the market changes over time, creators have the opportunity to keep earning. The nature of Uniswap means that the relative percentage may change over time, but it will always be non-zero.

Instead of creators earning just during the mint, they can now earn for the entire lifetime of the market—which can theoretically be forever.

Leveling up the collector experience

Collectors are crucial. They are the net-new actor in this paradigm and key to making this new value system work. Leveling up the collector experience was a main driver of this upgrade, since more collector demand means more creator earnings, which means everyone is happy.

This upgrade addresses one of the largest collector pain points we’ve seen: missing a mint. It’s incredibly common for a collector to come across something they love on Zora, but see that the mint has ended. They’re willing to pay more to get it, but there is no easy way to do that. With this new model, it is now possible for collectors to seamlessly buy even after the mint has ended. It may be at a higher price (it could also be at a lower price too), but at least it is now obtainable.

With a more efficient and liquid market, there’s potential for their collection to accrue value and realize it over time. Price discovery is automated, and the buy and sell experience is easy and instant. No need to manually list or bid, simply buy and sell at the current best price onchain.

This adds a new dimension to the experience once a mint is over. As things get shared and become more popular and contextualized over time, we’ll see the value of things change with it and a more dynamic and flexible experience for collectors who may have missed the original mint. Pair that with the fact that creators earn from this activity in the long term and we have the makings of a powerful new value system for creators and collectors alike.

How we made Zora mints Uniswap compatible

You can activate ERC1155 mode or ERC20 mode for any mint you own

We have engineered an extension of the ERC1155 standard to make them compatible with Uniswap. Each token in the collection has a deterministic ER20 contract built in. Similar to WETH (wrapped Ethereum), where ETH is wrapped and unwrapped into an ERC20 form for Uniswap and other developer purposes. The same thing happens here: an ERC1155 can be easily wrapped and unwrapped into ERC20 form directly on the contract.

This makes it easy for developers to seamlessly interact with whichever mode is most advantageous for their given use case. On zora.co and in our app for example, we use mints entirely in their ERC1155 mode, and whenever collectors buy and sell through the app we simply wrap and unwrap as needed for trades on Uniswap.

For developers who wish to interact primarily with the ERC20 mode, we extended the standard (called ERC20z) to inherit all of the metadata from the ERC1155 so you can accurately attribute it to the creator and display the media directly from IPFS. These are the most media rich ERC20s that exist onchain.

A new era for onchain creativity

With this latest protocol upgrade, we aim to put the full power of crypto into the hands of creators and collectors. By bringing secondary markets onchain and unlocking a new form of creator royalties, we hope to unlock more value for creators and collectors on Zora—realizing the value of imagination.

A world where imagination can be valued and realized effectively means a world we can dedicate more time, energy, and resources to helping us imagine more.

The imagination era begins.

[Learn more here. If you have questions, please reach out to our Support Team.]