LooksRare – The Hottest NFT Marketplace

    LooksRare platform as the leading NFT marketplace

    A deeper examination of the LooksRare platform, which has swiftly risen to the top of the NFT marketplace in terms of trade volume, reveals that the majority of the activity is really users selling tokens to themselves in order to earn more coins.

    At the height of the NFT boom, two anonymous co-founders — Zodd and Guts — started the platform in January as a competitor to industry leader OpenSea. According to a blog post at the time, the site aimed to add additional features to entice NFT fans. Almost all of these projects have centered on the incentive program based on the Looks token, which is given to active platform users.

    Sales are skyrocketing

    According to data provided by NFT tracker CryptoSlam, over $18 billion of the platform’s trading volume, or about 95% of all activity, can be attributable to what’s known as “wash sales.” When it comes to regulation, transactions are considered one of the numerous grey areas in crypto. The sales are done in this situation to earn fresh tokens rather than to inflate nonfungible token prices to entice naive buyers. The fees collected from each transaction support the marketplace.

    Representatives from LooksRare could not be reached for comment. Only pseudonyms and titles are listed on a web page devoted to the “LooksRare Team.”

    LooksRare aiding the NFT market

    At the same time, LooksRare has effectively helped to disguise the NFT market’s cooling demand. According to data from Dune Analytics, total revenues on OpenSea have decreased every month since January. According to DappRadar statistics, the site’s sales volume has dropped 67 percent in the last 30 days. The number of traders has dropped by 23%.

    While earning tokens is a big part of DeFi, it’s a relatively new function on NFT networks. Last year, Rarible was one of the first to propose the concept. The fees paid by LooksRare are likewise transferred to Looks holders. Some legal experts feel the wash trading that drives the LooksRare platform’s activity is illegal.

    “I don’t care if it’s stocks, bonds, Bitcoin, NFTs, or baseball cards,” said David Silver, a crypto attorney in Coral Springs, Florida. “Wash trading is a type of market manipulation in which an investor sells and buys the same instrument at the same time to produce fake, misleading activity in the market.”

    According to CoinMarketCap data, the price of the Looks tokens more than tripled in January before plummeting to slightly above its launch price.

    Adaptation of DeFi models

    A growing number of sites are adopting the DeFi-like approach in an attempt to steal NFT market share from OpenSea. Fees for LooksRare are similarly lower, at 2% against 2.5 percent for OpenSea.

    “It appears that organic trade in LooksRare is expanding,” Pedro Herrera, a senior data analyst at DappRadar, stated. “The difference between selling pricey NFTs like BAYC on LooksRare versus OpenSea can amount to a 1-2 Ether savings for the vendor. As a result, it appears that the NFT community is gradually embracing alternatives to the incumbent.”

    According to tracker Nansen, LooksRare remains a modest marketplace for NFTs outside of Looks token-related trade, compared to OpenSea, which has around 10 times more daily active users.

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