Rye said it wants to disrupt e-commerce, starting with an open and free web?

Written by: Lao Yapi

For entrepreneurs, I feel that sometimes the inspiration for starting a business comes from a single moment. For Web3 builders, inspiration may come even more unexpectedly.

Today, I want to introduce you to Rye, a platform dedicated to transforming the e-commerce industry, which was born from a text message. In early 2021, Rye's CEO and co-founder Arjun Bhargava received a text from Jamie Quint, asking if he wanted to join a Zoom meeting. Jamie had previously worked at Reddit, leading its monetization efforts, and served as the growth lead at Notion.

This was a life-changing text for Arjun. In the meeting, he was joined by four remarkable and experienced entrepreneurs who eventually became co-founders of Rye: Justin Kan (co-founder of Twitch), Tikhon Bernstam (formerly of Scribd and Parse), Robin Chan (an early employee at Zynga and founder of Operator), and of course, another former Reddit employee, Saurabh Sharma, later joined as CTO. The theme of the meeting revolved around one goal: How can Web3 disrupt e-commerce?

After the meeting, the co-founders began to outline what the future of e-commerce should look like: an open, free web that accommodates a collection of all products, allowing sellers to create an e-commerce experience in minutes, just like Stripe enables payments in minutes.

Most importantly, and most aligned with the characteristics of Web3, e-commerce should be a practical tool, free from the control of large companies over this network. It should evolve with the needs of merchants and sellers, providing immense benefits to shoppers, merchants, and developers.

The project will offer a one-click application programming interface, or API, allowing merchants to showcase part or all of their products on Rye's own marketplace. Rye will, in turn, provide developers with this catalog to embed in their own websites and applications. Through Rye's tools, these products can be viewed and purchased online, effectively creating a purchasable product catalog across the internet.

Rye API

By establishing an end-to-end e-commerce experience. The API provides everything needed to build a complete e-commerce product without worrying about logistics and inventory. Rye's API allows users to access product inventory from U.S. retailers (currently supporting only Amazon and Shopify). Rye enables developers to request products from different sources. These products will then be checked out through Rye.

The Rye API is fully decentralized and built on the Solana blockchain. To achieve this, the platform needs to work directly with merchants and sellers and collaborate with active developers in the community. Currently, the project has begun open-sourcing reference applications using the API (such as the Rye store builder), which will allow anyone to create their own shopping experience in minutes.

The core API has addressed many challenges faced by e-commerce developers, ultimately becoming a core web3 component that provides wallet creation based on email for shoppers, developers, and merchants, enabling merchants to connect directly to the Rye API, unlocking faster product data and instant checkout experiences. Specifically------

Shoppers will have a unified checkout method, allowing them to pay for products from different store platforms in a single shopping cart. They can also take advantage of additional benefits from the crypto industry, such as USDC cashback rewards, NFT airdrops, and coupons, as well as a faster shopping rewards system.

Merchants will be able to list their inventory in the database and have more effective tools to obtain higher quality customer data, run their stores more efficiently, and directly reward customers and developers.

Developers can build a website or application and have unrestricted access to the largest product inventory.

Rye has begun deploying the building blocks of this network. Over the past year, it has been building a centralized MVP of the product to demonstrate its value and how it can make e-commerce more efficient.

With three core features:

• Programmatic checkout: The project has developed a one-click programmatic checkout that allows shoppers to add their payment information directly within the shopping experience, without having to pay on the merchant's website.

• Shopify and Amazon product data: Secondly, the API has the largest database of Shopify and Amazon products. Developers can request API keys and search listings for free to learn about prices, inventory quantities, product details, and more. Additionally, Rye provides a search and recommendation engine for a more personalized product discovery experience.

• Network rewards: The project has added connections to affiliate networks, allowing developers and suppliers to accumulate rewards for their sales.

Token Economics

By offering participants cryptocurrency tokens (named Rye), Rye believes it can do this at a lower cost than e-commerce practitioners like Amazon and Shopify. Shopify charges a fee of 2.4% to 2.9% per online transaction, along with subscription fees and transaction fees, while Etsy charges a 6.5% transaction fee plus listing fees. Rye's founders claim that by building a token protocol, they can ultimately make a profit despite offering fees well below one percent (reportedly just to keep the servers running).

In the long run, the project and its venture capital supporters hope that their Rye token will become a mainstream and valuable cryptocurrency in itself, providing participants with redeemable rewards similar to the cash-back programs already popular in the industry. However, it remains to be seen how much benefit merchants can truly derive from their token shares.

This year, Rye has raised $14 million in seed funding, with A16z crypto leading this round with support from its cultural leadership fund. The project will use this money to develop its product and engineering team, building more tools and infrastructure for sellers and merchants to help advance the next step in e-commerce.

As it stands, this startup's API has already been tested with some merchants, and more features are expected to roll out soon. Securing funding and establishing more partnerships will also provide initial liquidity for its eventual token issuance. The specific token scheme will be analyzed further after its launch by Allrecode.