NFT Industry News

People are using LooksRare to inflate the price of NFTs, whilst making rewards

LooksRare’s buying and selling quantity exceeded $8B at the moment. It’s protected to say that OpenSea’s competitor has been extremely profitable after just a few days within the recreation. Nonetheless, many within the NFT house are involved that LooksRare’s quantity is just growing as a result of wash buying and selling. 

looksrare 29th january
The brand new child on the block is making headlines for its spectacular rewards and buying and selling quantity
Credit score: @LooksRareNFT

What’s LooksRare?

LooksRare is a peer-to-peer NFT market that’s community-driven. Its distinctive promoting level is its LOOKS token. That is rewarded to customers who purchase and promote NFTs from eligible collections. 

Customers who stake LOOK get hundred-per-cent of the platform transaction charges. Moreover, creators who promote objects on LooksRare get royalty funds in LOOKS tokens. 

Upon its launch, LooksRare focused OpenSea customers who had been lively between June sixteenth and December sixteenth 2021 by airdropping LOOKS tokens to 185,000 wallets.

LooksRare’s wash buying and selling controversy

The day by day US buying and selling volumes of LooksRare vastly exceed these of OpenSea. Nonetheless – many are questioning how the nascent is managing to do this, contemplating that it solely has 1% of the variety of day by day customers that OpenSea has.

The reply in all probability lies in the truth that customers who commerce NFTs on LooksRare earn LOOKS tokens as rewards. Patrons and sellers can subsequently earn a number of tokens by merely producing quantity.

Wash buying and selling indicators

It’s protected to say that this system is rife with wash trading; an unlawful kind of buying and selling the place customers promote and purchase NFTs to themselves, creating synthetic curiosity in an funding. 

One other indicator of wash buying and selling is that almost all of LooksRare’s gross sales quantity is pushed by zero royalty NFTs. Verified creators get LOOKS tokens via secondary gross sales of their work. Nonetheless, with zero royalty NFTs, the unique creator doesn’t get any rewards from secondary gross sales. 

LooksRare is attempting to mitigate wash buying and selling. In reality, the team insisted that: “The buying and selling rewards system has been designed and iterated upon to closely dissuade customers from buying and selling for the only real objective of farming LOOKS rewards.”

LOOKS holders are incomes staking rewards

Regardless of the controversy, LooksRare’s excessive buying and selling quantity has made the platform common – and customers are raking within the rewards. LOOKS token holders can stake the tokens and earn rewards in wrapped ETH, with an annual share fee of 480.77%. On January twenty ninth, the platform distributed 3,419 $WETH ($8.7M USD) in rewards and a day earlier expanded its buying and selling rewards to all NFT collections. 

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