For the time being, OpenSea is the most active NFT marketplace in terms of trading volume.
However, with each new year comes a new opportunity, and who knows, this year may offer us a new platform for NFT trading.
Among OpenSea’s long-standing competitors, there is one fresh face that is challenging the company’s dominance: LooksRare.
LooksRare is a Formidable Rival
LooksRare is a brand-new NFT platform that debuted in January with the goal of outperforming OpenSea. The marketplace also intends to address current OpenSea platform shortcomings.
LooksRare made an excellent debut, advertising itself as an NFT marketplace “By NFT People, For NFT People.” LooksRare has been depicted as a significant NFT market rival to OpenSea two weeks after its debut, thanks to a huge boost from the community.
The platform looks to have quickly established itself on the market.
On the first day of token release, LooksRare made headlines with its LOOKS token airdrop. All users that are eligible are able to receive LOOKS.
The criteria requires OpenSea users who have traded NFTs for over 3 ETH. This spreading effect pushed the trading volume on LooksRare to surpass OpenSea on the second day and the number kept increasing over the past 2 weeks since its launch.
One of the factors that made LooksRare’s immediate success are token incentives, which is unavailable on OpenSea. LooksRare also charges 2% (in ETH), but the difference is that those fees are passed back to platform users who earn LOOKS when they interact with the platform.
Furthermore, Users are also encouraged to stake their earned LOOKS in order to gain more earnings and a high annual return.
Besides, up to 60% of staking profit is paid in wrapped ETH (WETH) and the rest in LOOKS. Admittedly this is quite rare as not a lot of profitable farming is paid for in WETH/ETH.
When scrutinizing the figures, over 80% of the majority of trades on LooksRare were discovered as wash trading.
Wash trading is a process by which traders sell and buy back the same asset to create a trade, increase/decrease the asset’s price, and focus on the goal of influencing volume so that the trading price of assets increases.
Despite this, LooksRare is undeniably popular due to its token reward. LooksRare drew a large number of trading volumes on the first day of launch and the following days, thanks to the attractive airdrop and LOOKS token awards for NFT trading.
But it’s just the tip of the iceberg.
LookRare is growing because OpenSea has been taking some hear. Digital art theft has become a big issue on OpenSea, forcing many creators and influencers to criticize OpenSea for not being strict enough to protect real artists.
Another big factor driving people away from OpenSea is the fact that they have a better chance of generating money on LookRare, where the fees do not go to the platform owners.
OpenSea is Still King
For the time being, OpenSea has a complete dominance on the NFT arena and is rapidly expanding globally. The platform has a market share of roughly 90%, and its centralized structure is controlled by the founders and a few venture investors.
Despite the strong criticism, the NFT market made a lot of impressive figures.
Opensea is the most popular NFT market right now, with a slew of appealing features such as exceptionally low gas prices and a robust set of customer support tools.
As it continues to implement more blockchain connections that allow users to use any payment method, this platform has the potential to dominate the NFT market in the future.
According to publicly available trading data, only under 15% of LooksRare trades were organic, therefore the threat from LookRare appears to be overblown. It’s still too early to draw any conclusions, given the competition between NFT marketplaces is still ongoing.