Could LooksRare Overtake OpenSea as Top NFT Marketplace?
As OpenSea continues to raise money, new NFT marketplaces have emerged, trying to take away its goliath market share.
What You Need To Know
OpenSea was recently valued at $13.3 billion. In early January 2022, OpenSea announced a Series C funding raise of $300 million with Paradigm and Coatue being the largest investors in the round. OpenSea’s total funding has now reached $427 million according to Crunchbase.
The NFT market is stalling. Throughout Q4 of 2021, many NFT marketplaces including OpenSea saw declines in monthly volume, monthly NFTs sold, and monthly fees meanwhile some smaller marketplaces like Rarible lost significant portions of their already small market share.
LooksRare has entered the market. On January 12th, LooksRare came online and strategically airdropped their native token $LOOKS to all OpenSea holders with over three Ethereum traded and required claimants to also list at least one NFT on LooksRare for sale.
The $LOOKS token and LooksRare marketplace have injected themselves into the NFT space this week and have taken a dent out of OpenSea’s market share. LooksRare is an NFT marketplace that touts itself as the community-first NFT marketplace with rewards for participating, which is the site’s tagline that is postered across their home page. Users that transact on the marketplace earn $LOOKS tokens and 100% of trading fees go directly back to $LOOKS stakers through the site’s staking pools, which as of January 13th, are reporting 963.33% APR. Something that stands out as unique to LooksRare is the different types of bidding and cancellation measures the site offers. The marketplace will soon roll out abilities for investors to make an offer on all NFTs in a collection, all NFTs in a collection with a specific trait, and to cancel multiple open offers in one transaction.
The $LOOKS token’s allocation is broken into seven different categories with a massive priority on community allocation. The community is anticipating receiving 75% of the one billion tokens with 12% being allocated to the initial airdrop, 18.9% allocated to staking rewards, and 44.1% allocated to trading rewards. The remaining 25% is allocated to the treasury, founding team, and other strategic purposes. The LooksRare team is planning on full distribution of stakable $LOOKS by end of the year 2023.
One of the most interesting aspects of the entire LooksRare launch is their get-to-market strategy. LooksRare utilized a tactic called a vampire attack. A vampire attack is a well known strategy across decentralized finance where one protocol or platform will incentivize users to move from other platforms to their own through airdrops, staking rewards, and other benefits. LooksRare executed this strategy by airdropping $LOOKS tokens to all wallets with over three Ethereum traded on OpenSea, all of which is public information on the blockchain. Furthermore, LooksRare required users to list one NFT for sale on their platform in order to claim the airdropped tokens as well.
Since the launch of LooksRare, the platform has done $1.1 billion in volume compared to OpenSea’s $260 million.
However, LooksRare’s total users is around 9,000 while OpenSea has had about 200,000 users since LooksRare’s launch. Only time will tell if LooksRare will be able to keep up its user base and volume or if it will burn out quickly and the burst of traction was only due to the airdrop.