LooksRare: A Community-Based NFT Marketplace

Update 27 Oct 2023 • Reading Time 6 Minute

Reading Time: 6 minutes

At the peak of NFT popularity in 2021 and 2022, many NFT platforms, such as OpenSea, NiftyGateway, and Rarible, rose to prominence. In early 2022, a new NFT platform called LooksRare emerged and quickly achieved trading volumes that surpassed OpenSea, reaching a whopping $2.9 billion! What enabled LooksRare to rival OpenSea? In this article, we’ll dive deeper into what LooksRare is and explore the platform’s exciting features.

Article Summary

👀 LooksRare is a community-based NFT marketplace that operates on the Ethereum blockchain. The platform was founded by two anonymous co-founders, Zodd and Guts, in January 2022.
🪂 Following its launch, LooksRare recorded significant weekly trading volume, almost three times what OpenSea did. It was mostly due to the LOOKS token airdrop.
🪙 LOOKS is LooksRare’s platform token, a standard ERC-20 token designed to encourage ecosystem participation.
💎 LooksRare has features such as Bulk Buy, Gems, Staking, YOLO, and Community Raffles to increase user interaction.

What is LooksRare?

LooksRare is a community-based NFT marketplace built on the Ethereum blockchain. This platform actively provides trading rewards to traders, collectors, and creators to encourage participation in the platform. However, as of September 2023, trading rewards have been discontinued and replaced with a different reward model.

With the motto “by NFT people, for NFT people,” LooksRare distributes 100% of trading fees as rewards to the NFT creators and the LOOKS token stakers.

Following its launch in January 2022, the weekly trading volume on the platform has steadily increased, reaching approximately 2.9 billion US dollars. It was almost three times the volume of OpenSea over the same period.

One of the factors for the increase in trading volume is the airdrop of the LOOKS token, LooksRare’s platform token. Users can claim LOOKS tokens for free if they make NFT transactions on OpenSea worth 3 ETH over the previous six months and list NFTs on LooksRare.

LooksRare charges a 2% fee for NFT trades. This fee is cheaper compared to OpenSea, which charges 2.5%. However, in April 2023, the platform launched LooksRare V2, which cut the NFT trading fee from 2% to 0.5%.

Who Founded LooksRare NFT Marketplace?

This platform was founded by two anonymous co-founders, Zodd and Guts, in January 2022. They plan to rival OpenSea with additional use cases via LOOKS tokens to incentivize users.

In order to attract users and increase trading activity, this platform follows a strategy similar to SushiSwap’s “vampire attack” on Uniswap. The distinction lies in LooksRare’s practice of distributing free tokens to drain liquidity from its rival, OpenSea.

How to Use LooksRare?

You can visit the LooksRare website at https://looksrare.org/. To trade NFTs on this platform, you must first connect your crypto wallet. MetaMask is a popular crypto wallet, but you can also use others via WalletConnect.

LooksRare generally looks similar to other NFT marketplaces and is easy to use. To buy an NFT, you can easily search for the collection in the search field and click ‘buy’ or make an offer.

Similarly, to sell an NFT on this platform, you can click “Sell” on the homepage, and then select the NFT you want to sell. After that, you can set the price and offer duration.

This platform differs from other NFT marketplaces in its NFT minting process. It uses Manifold, a platform specifically designed for creating and minting NFTs.

To mint NFTs, you can start by clicking on the ‘Create Collection’ option on your profile, and you will be directed to the Manifold site. Then, follow the instructions provided.

Features on LooksRare

Bulk Buy: A feature that allows users to buy more than 70 NFTs in a single transaction.
Fixed price listing: You can set the NFT price in USD, so the price doesn’t have to be in ETH.
Gems: A feature in LooksRare to earn rewards. You will receive rewards by listing items from eligible collections and completing specific tasks each season. At the end of each season (usually a month), Gems can be converted into LOOKS.
Staking: There are two types of staking in LooksRare: the Standard Method (rewards are LOOKS and WETH) and the LOOKS Compounder (WETH rewards are automatically converted into LOOKS). To start staking on LooksRare, you can visit the official website here.
Yolo: A game that involves combining NFTs, ETH, and LOOKS added by players in each round. At the end of the round, a single winner is randomly selected. The bigger your contribution, the higher your chances of winning.
Community Raffles: A raffle system for earning NFTs where you have full control. You can determine the rules, prizes, and winners. More info can be found here.

Advantages of LooksRare

Low Fees: LooksRare charges a platform fee of 0.5%. It is cheaper compared to OpenSea, which charges a 2.5% platform fee.
Platform Rewards: Users can generate LOOKS tokens through staking, trading, and listing NFTs on LooksRare.
Option to Bid on the Entire Collection: This method benefits NFT whales.
Reward Features: LooksRare has several features that offer additional rewards to users, such as YOLO, Community Raffles, and Gems.

Drawbacks of LooksRare

One Blockchain: LooksRare only operates on the Ethereum blockchain, which could potentially cause higher gas fees compared to platforms that support multiple blockchains. However, with LooksRare V2, gas fees are reduced by 30% compared to V1.
Founder Anonymity: The identity of LooksRare’s founders is not disclosed.
Does Not Support NFT Minting: LooksRare does not have a built-in NFT minting feature; instead, it relies on a third-party service like Manifold. This absence of native NFT minting support could potentially pose challenges for NFT artists and creators
“Wash Trading” issues: NFT price manipulation on LooksRare is risky, which may encourage fraudulent actions. The practice of “wash trading” might result in the value and popularity of NFTs on the platform being overinflated.

LooksRare V2 Update

In April 2023, LooksRare was updated to LooksRare V2. In this version, there are several important updates, such as the following:

LooksRare will focus more on on-chain games in the future.
Platform fee cut. LooksRare’s platform fee is now 0.5%, down from 2%.
No more Trading Rewards. Instead, those rewards will be added to the LooksRare Treasury.
Changes to tokenomics.
What’s interesting is the LOOKS token buyback, where 50% of the platform fee will be allocated to buy LOOKS in the crypto market. The remaining 10% goes to LooksRare Protocol Rewards, and 40% goes into the treasury.

LOOKS Token

LooksRare has a native utility token called LOOKS, an ERC-20 standard token used only on the this platform. LOOKS is designed to encourage ecosystem participation, so users must participate to earn rewards in the form of LOOKS and other digital assets.

LOOKS has a maximum supply of 1 billion LOOKS tokens. As of October 27, 2023, there are 948,380,305 LOOKS or 94,84% of the tokens already circulating in the market. Based on Coinmarketcap’s market cap numbers, LOOKS ranks 308th with a market cap of almost 69 million US dollars.

Currently (October 27, 2023), the LOOKS price is at 0.072 US dollars with a daily trading volume of almost 5 million US dollars.

Conclusion

As one of the newer NFT platforms, LooksRare generated considerable excitement upon its launch in early 2022. LooksRare’s trading volume may rival that of OpenSea. However, this early success is driven by trading incentives. Unfortunately, the products and services they offer cannot maintain the same user engagement as OpenSea.

Despite LooksRare releasing a new version, LooksRare V2, LooksRare’s market growth has not shown a significant increase. It is certainly influenced by several factors, such as the global condition of the crypto market