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New contender to the NFT marketplace throne, LooksRare, is reporting incredible sales figures during its first few days of operations. So far, it has generated over $394 million worth of trades. However, not all is as it seems.
To give a bit of background, LooksRare offers lower platform fees than its main rival, OpenSea, while also rewarding users of the marketplace through the distribution of its native $LOOKS token, gifting a total of 2,866,500 tokens, currently worth $4.42 each, per day over a period of 30 days to its traders.
However, it seems that mathematically astute purveyors of non-fungible tokens have seen an opportunity. Through washtrading, the process of artificially generating activity on the market, they believe they can make more money through the $LOOKS rewards than they spend on platform and gas fees.
1/ I see a lot of people talking about the wash trading on @LooksRareNFT.
So is it actually happening? Yes
Is it by design? Probably
Is it a bad thing? I don’t think so. In fact, I think it’s genius.
Let’s dive in 🧵
— dingaling (@dingalingts) January 12, 2022
Because of this, collections that don’t charge a royalty fee on the secondary market have surged. Specifically, Meebits and LOOT are trading at unprecedented levels, almost eclipsing that of their all-time trading volume. So far, Meebits has traded over 107k ETH on LooksRare, compared to its total volume traded of 80k ETH on OpenSea, while a single, unassuming Meebit “changed hands” for an incredible 14700 ETH, almost $50 million. However, the more people who participate, the smaller the share in tokens will become.
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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.
Decentralised human, Explorer, Adventurer.
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