LooksRare is a decentralized NFT marketplace that rewards users with its native token, LOOKS. It’s v2 update dramatically reduced user fees. However, LooksRare has been under the microscope for wash trading activity.
LooksRare is a marketplace where you can trade non-fungible tokens (NFTs). In this guide, we’ll show you how to buy, sell and mint NFTs as well as earn passive income on the LooksRare NFT trading platform.
🍒 tasty takeaways
LooksRare is a decentralized NFT marketplace launched in 2022, aiming to be a community-first platform
LooksRare launched its version 2 in April 2023, reducing trading fees from 2% to 0.5% and offering a native token, LOOKS, for staking and earning rewards.
Non-fungible tokens (NFTs) are unique blockchain-based digital assets that can represent digital and physical assets. Unlike fungible tokens (e.g., ETH), each NFT is distinct and not interchangeable.
Participants can earn passive income on LooksRare by staking the LOOKS token.
In order to trade NFTs on LooksRare, you’ll need to connect a self-custody crypto wallet.
|What is LooksRare?||Decentralized NFT marketplace. Launched in 2022, it aimed to be the Uniswap of NFTs.|
|NFTs||Blockchain-based digital assets representing unique items. Not interchangeable.|
|Trading Fees||Initially 2%. Reduced to 0.5% in April 2023.|
|Rewards||100% of trading fees distributed to NFT creators and LOOKS stakers.|
|LOOKS Token||Native token of LooksRare. Can be staked for rewards.|
|Competitors||OpenSea, Blur. LooksRare offers 100% fee distribution to users.|
|Reputation Concern||Rumors of wash trading; led to price drop of LOOKS token.|
What Are NFTs?
A non-fungible token (NFT) is a blockchain-based digital asset that represents something unique. NFTs, which are hosted on a blockchain with the smart contract feature, can represent a digital or physical asset. Think about collectibles, artworks, luxury goods, music tracks, game items, metaverse assets, etc.
Each NFT has a unique value and cannot be replaced with another token. Therefore, NFTs use a different token standard (ERC721) compared to fungible tokens and coins (ERC20). For example, we wouldn’t mind if one ETH were replaced with another ETH in our digital wallet – they are fungible, which means they are interchangeable. NFTs are NOT interchangeable.
Why Are NFTs Important?
NFTs can support a whole new range of use cases that revolve around asset ownership, intellectual property (IP), and efficient trading of non-liquid assets like real estate and fine art. By leveraging blockchain technology, these tokens are indivisible, immutable (set in stone), indestructible, and verifiable.
The NFT market boomed in 2021. Despite the hype and eventual price corrections, NFTs have established a lasting presence in the digital world.
What Is LooksRare?
LooksRare is a decentralized application NFT marketplace where traders and collectors can buy and sell NFTs. The platform was launched at the beginning of 2022 during the NFT market boom, offering over $1.3 billion in rewards to its users.
The goal of LooksRare is to be the Uniswap of NFTs, positioning itself as a community-driven marketplace and leveraging the decentralized finance (DeFi) trend. It encourages NFT traders to use the platform through generous rewards.
LooksRare aimed to dethrone OpenSea, the largest NFT marketplace by trading volume. However, this seems to be a distant goal.
The platform used to charge 2% on NFT trades versus OpenSea’s 2.5% commission. In April 2023, LooksRare launched version two (v2) of its platform, cutting NFT trade fees from 2% to 0.5%.
How Does LooksRare Work?
LooksRare is an NFT marketplace built on the Ethereum blockchain. It lets users mint, buy, and sell Ethereum-based NFTs.
The main selling point of this platform is that it rewards creators and NFT traders. The ecosystem is fueled by its native token, LOOKS, which is an ERC-20 token with a fluctuating value.
Live: LOOKS Chart
The platform distributes 100% of trading fees to NFT creators and LOOKS stakers. All rewards are paid in LOOKS, which can be traded on secondary markets like Uniswap.
The token’s maximum supply is capped at 1 billion, and the share of the circulating supply is about 94% as of mid-October 2023.
About three-quarters of the tokens have been allocated for rewards. 12% of the total supply has been put aside for a massive airdrop program to incentivize NFT traders who traded 3+ ETH on OpenSea between June and December 2021. To claim their LOOKS, users had to list at least one NFT on LooksRare.
Earning Rewards on LooksRare
The trading fees and rewards are paid in LOOKS and Wrapped Ethereum (WETH), with LOOKS stakers being eligible to accrue rewards on a daily basis. Read how wrapped ether works here. With the launch of v2, WETH was replaced with ETH for most rewards.
The LooksRare platform offers two staking options:
- Standard staking – this is an active form of staking that allows users to earn LOOKS and WETH with a total annual percentage return (APR) of 11.85% as of mid-October 2023.
- LOOKS Compounder – the compounder mechanism automatically converts users’ WETH earnings into LOOKS and applies it to staking, increasing the APR figure. As of today, this method generates an annual percentage yield (APY) of 12.29%.
You can start staking by visiting the LooksRare Rewards page. You can withdraw earnings at any time.
The updated version of LooksRare introduced new features. For example, bulk buys enable users to buy multiple NFTs in one transaction. Also, fixed price listings can be set in USD instead of ETH.
LooksRare vs Other NFT Marketplaces
LooksRare is different from OpenSea, Blur, and other NFT marketplaces.
To begin with, LooksRare is promoting itself as a community-first NFT platform, distributing 100% of the fees to users. Another distinct aspect is that it has its own token.
Here is a brief comparison between LooksRare and its competitors:
How to Trade NFTs on LooksRare?
LooksRare has an intuitive interface that makes it easy to buy and sell NFTs even for beginners.
Buying NFTs on LooksRare
To buy NFTs, click on the “Collections” tab at the top of the page. You will see an extensive list of NFT collections, such as the popular Bored Ape Yacht Club. You can also use the ‘Search’ section and create a watchlist.
If you like any particular NFT, you can click on it to explore more details and purchase it by clicking “Buy Now.”
Selling NFTs on LooksRare
To sell NFTs on LooksRare, have the supported wallet connected to the platform. Next, click the “Sell” button on the homepage. This will take you to a screen showing all of the NFTs held in your wallet.
You can click “Sell” on any of the NFTs you want to list on the platform and set the fixed price and the number of days you want the NFT to be listed.
Once you have offers, you can go to the individual page of your NFT to explore and accept the offer you prefer.
Mint NFTs on LooksRare
On the “Sell page,” you can create an NFT collection from scratch. To do this, click on “Create a Collection,” which will lead you to the Manifold Studios’ website on a separate page.
This is where you can import images, videos, and music tracks to create Ethereum-based NFTs and then list them on LooksRare.
Reports of Wash Trading
LooksRare once used to compete with OpenSea as one of the largest NFT marketplaces by trading volume. This was reflected by the LOOKS price as well, which peaked at over $7 at the beginning of 2022.
However, rumors of wash trading made headlines amid the hype. NFT tracker CryptoSlam suggested that about 95% of the total activity on the platform was associated with wash trading, which means that sellers manipulated the market to inflate volume figures and trigger the rewards system.
These reports have undermined the reputation of LooksRare, which saw its token price plummet to $0.2 within months. LOOKS currently trades at six cents.
It remains to be seen whether the v2 upgrade will revive LooksRare and if the crypto community will adopt the ecosystem.
LooksRare is a community-oriented NFT marketplace that shares 100% of its platform fees with users through airdrops, staking programs, and other incentive mechanisms. The only cryptocurrency accepted for NFT purchases is ETH. Bitcoin (BTC) is not accepted.
The platform used to charge 2% for each NFT trade, but the recently launched v2 cut the fee to only 0.5%.
The LOOKS token is the native token of LooksRare. It can be staked on the platform to earn passive income.
The LOOKS token has declined dramatically after reports that the lion’s share of its trading volume was due to wash trading.