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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Decentralised human, Explorer, Adventurer.