LooksRare: A New Player On The NFT Market
Big business always has fierce competition. The NFT industry today is one such business.
The NFT sector has (or had?) its own leader — OpenSea NFT marketplace, which took over 90% of market share last year. With the characteristic feature of the crypto market as volatility, one would assume that OpenSea might someday be left behind, but who would have thought it would happen so abruptly!
Meet today’s “culprit” — LooksRare NFT Marketplace — which has boldly encroached on the “warm spot” of the leader. How could it do this, what are its advantages over OpenSea, and will it be able to retain the leading position?
The origin of the success
The platform positions itself as a “community-first NFT marketplace with rewards for participating”. The LooksRare marketplace went public on January 10, 2022, with a sweet offer — LOOKS token airdrop.
The terms of the airdrop program were simple: users should have made at least 3 ETH of NFTs transactions on OpenSea from June to December 2021 to claim for the airdrop. It was possible to get tokens according to 9 levels: the more transactions the OpenSea users made, the more tokens they could get. Such a simple scheme to bring “beneficial” OpenSea supporters! And, honestly, the engagement has worked out for them.
The LooksRare launch date was the point of instant growth of new users compared to the OpenSea marketplace, which is stable in this respect.
It is worth mentioning that OpenSea has largely dominated the NFT marketplace, accounting for 3.6 million ETH of NFT transactions last year. Such a fierce face-to-face attack of the prominent leader by a market newcomer is what experts call a “vampire attack”.
Indeed, the daily (January 19) LooksRare’s transaction volume reached more than $800 million.
Having sold $100 million in NFTs the next day after a solid launch, the entrance into the NFT industry can be considered more than upbeat.
Thanks to its incentive trading program, LooksRare keeps leading the charts. Smart move.
Distinctive LooksRare features
The LOOKS token giveaway is not the platform’s main tricky loophole. Positioning itself as an NFT community-centric platform “actively rewards traders, collectors, and creators for participating”, its founders empower users to join the marketplace by offering nice perks:
So, LooksRare focuses on rewarding tokenomics according to which users can:
Earn LOOKS tokens
According to the founders, 75% of the tokens issued are intended for the NFT community:
- 12% for airdrop
- 18.9% for staking rewards
- 44.1% for trading rewards.
Get a cut from a 2% trading fee
The point is that the platform charges a transaction fee of 2%, but the resulting fee is planned to be distributed to the token holders.
By the way, OpenSea, with its 2.5 % transaction fee, does not offer such an advantageous option.
Real-time royalties paid-out
NFTs creators can receive their royalties instantly, whereas in OpenSea it can take up to a week.
Finally, another standout LooksRare feature is the possibility for NFT enthusiasts to benefit from the collection and trait offer.
What are the platform’s outlooks?
There is an opinion among the NFT community that the surge in trading volume is related to the “wash trading” policy. This approach is often observed among traders to attract inflows to a marketplace. Given the sharp and stunning success of the LooksRare marketplace in the graphs by Dune Analytics, this is quite possible. However, it is worth giving credit to the rewarding program, which is considered newcomers enticement, while the additional perks retain them.
Rewarding programs are quite a common and future-proof thing among NFT projects. For example, OneArt’s NFT-based solution also has a rewarding program for artists, musicians, and celebrities making it more user-centric with a “note of entertainment”. Here you can find more information about how our solution contributes to NFT expansion in the music industry.
Here’re predictions in numbers:
- According to DigitalCoinPrice, LooksRare could be priced at $7.8 for 2023, rising to $9.82 in 2025.
- PricePrediction analysis also shows a potential increase in prices for LOOKS tokens over time: the minimal price for 2030 is $125.07.
Of course, predicting the possibility of the further existence of the marketplace, one cannot but mention its volatility. A “new” always arouses interest. But, considering the price growth curves of the token, one should not forget that it is still better to consider the potential in terms of “opportunity” and not “absolute”.
Whether the NFT marketplace will hold out as a leader will be shown by its further policy and, of course, time.
By the way, for the convenience of tracking marketplaces you are interested in, it may be convenient to leverage the marketplace aggregator solution, the implementation of which OneArt is already working on.
Rustam I. — CCO. LinkedIn