A decentralized competitor to NFT marketplace leader OpenSea arrived this week in the form of LooksRare. Co-founded by pseudonymous Zodd and Guts, LooksRare has already surpassed OpenSea, two days in a row, in daily volume as it recorded $500 million on Jan. 12 and $322.7 million on Jan. 11 compared to OpenSea’s $84.6 million and $87.6 million, respectively, according to data from Dune Analytics.
OpenSea, however, is still on track to have another record month, already recording $2.6 billion in volume in January 2022, nearing an all-time high of $3.42 bln in August 2021.
But there have been growing concerns about OpenSea’s centralization and its policies around delisting hacked or exploited NFTs. The community has also been urging the platform to release a token to reward its early users and loyal customers.
LooksRare took on the most popular NFT marketplace by launching a vampire attack on OpenSea. Claiming to be a community-focused marketplace, the project indexes all NFTs so that they can be traded straight away while supporting both ETH and Wrapped Ethereum (WETH).
The has been quite a buzz around LooksRare thanks to the LOOKS token, which is used to attract existing users from OpenSea. Those who have traded over 3 ETH on the platform between June and Dec. are eligible to claim the tokens.
LOOKS tokens are also used to reward LooksRare users. Buyers and sellers are being rewarded with 2.8 million LOOKS tokens per day for a month.
The coin has a $500 million market capitalization and is currently enjoying an uptrend, trading at $4.68. LOOKS has a total supply of 1 billion.
LooksRare is also giving away LOOKS tokens to users who trade select NFTs, including the Doodles and Bored Ape Yacht Club.
The new marketplace is charging a 2% fee on all trades, all of which goes to those who stake their LOOKS tokens in the form of WETH. OpenSea, on the other hand, takes a 2.5% cut which goes to the team.
Crypto trader and NFT collector MoonOverlord, who is also an investor in LooksRare, took to Twitter to share his bullish outlook on the marketplace, saying, “Looks Rare is everything we want web3 to actually be about.”
LooksRare is currently gaining traction. However, when it comes to daily transactions, OpenSea is still leading with numbers coming between 60k and 110k in these last three days, while the former has only managed to pull in between 690 and 4k daily transactions. The same is the case for daily users with OpenSea having more than 10x users of LooksRare.
It has led to the accusations of “wash trading” in an attempt to manipulate the rewards model and farm more tokens. Larva Labs’ Meebits are one of the NFTs used for wash trading, whose floor price is about 2.5 ETH but are trading for as much as 30 ETH.
However, according to the project documentation, each trade on LooksRare incurs a 2% fee and a royalty fee between 5%-10%. Token rewards for trading each day, meanwhile are “fixed” and distributed based on the trading volume contributed by a trader.
“There’s no guarantee of the amount of rewards that a wash trader could earn in a day,” it adds.