After long speculations, OpenSea can finally see the power of a new competitor LooksRare. According to a Dune Analytics dashboard in just 24h the fledgling non-fungible token marketplace has hosted $105 million in trading volume, generating 613 ETH (nearly $2 million) in platform fees to be distributed to LOOKS token stakes in the coming hours, according to pseudonymous co-founder Zodd:
OpenSea is struggling to keep pace with LooksRare and on Tuesday also had $105 million in sales. 75,000 Ethereum addresses have claimed a LOOKS airdrop worth an average of $3,500, and the token is on the precipice of breaking the top 200 cryptocurrencies by market cap, up 38% on the day to $3.58.
Why are many people suspicious?
While some would say that Opensea has its flaws and it’s time to get fair competition, some are doubting “Wash trading”. It seems like LooksRare success isn’t entirely attributable to natural demand.
Many people point out that a large portion of LooksRare’s volume is likely being generated from wash trading, which refers to the practice of wallets typically controlled by the same party “selling” assets back and forth.
At this moment the protocol is rewarding buyers and sellers with 2,866,500 LOOKS tokens (over $10 million) per day based on volumes traded and will continue to do so for the next 30 days before progressively cutting emissions, according to the documentation.
Collections without royalty fees, such as Larva Labs’ Meebits, are among the most popular, with many “floor” Meebits generally worth 3.5 ETH or lower trading for as much as 30 ETH.
“Each trade on LooksRare (except for private sales) incurs a platform fee of 2%, and typically a royalty fee of between 5%-10%. The total LOOKS rewards for trading each day are also fixed, and distributed based on traders’ contribution to total trading volume, meaning that there’s no guarantee of the number of rewards that a wash trader could earn in a day,” reads the documentation.
Will LooksRare go higher than Opensea, or it will melt down in a couple of months?