OpenSea Rival LooksRare Tops $235M in Ethereum NFT Trading in One Day

OpenSea is on pace for a record-setting month of Ethereum NFT trading volume, but the competition is growing. A hot new challenger has emerged in the form of LooksRare, and it has already racked up more than $235 million in trading volume in just over a day.

Launched yesterday, LooksRare is gunning for OpenSea’s customers via its own LOOKS token. LooksRare is offering a free airdrop of LOOKS tokens to OpenSea users who transacted at least 3 ETH (about $9,630 as of today) on the marketplace between June 16 and December 16, 2021.

It’s a form of launch called a “vampire attack”—that is, attempting to leech away users from a successful platform by providing them incentives in the form of tokens. SushiSwap initiated one in 2020 as it attempted to dethrone leading decentralized exchange Uniswap, and NFT marketplace Infinite has attempted much the same against OpenSea.

On top of that, all fees generated by LooksRare going forward will be paid out as rewards to LOOKS holders who stake their tokens in the platform. LookRare’s 2% fee on transactions is also lower than OpenSea’s 2.5%, but OpenSea keeps that fee. LooksRare has pledged to distribute 100% of fees to LOOKS token stakers in Wrapped Ethereum (WETH).

It has only been a day, but LooksRare may already be seeing results. According to public blockchain data collated by Dune Analytics, LooksRare has already generated more than $235 million worth of Ethereum NFT trading volume since launching yesterday.

Interestingly, OpenSea’s trading volume sank yesterday compared to its recent hot streak. OpenSea notched just under $170 million worth of Ethereum trading volume on Monday—its lowest day so far in 2022, and a drop from over $261 million of volume on Sunday.

The NFT market is famously volatile, much like the cryptocurrency market, and one day’s data isn’t enough to suggest a trend. But it will be interesting to see if LooksRare trading volume continues to rise or maintain at this level in the days and weeks ahead, and if OpenSea sees diminished results going forward.

An NFT is a tokenized receipt that proves ownership for a digital item, whether it’s an image, video file, or some other type of collectible. The wider NFT market ballooned to more than $22 billion worth of trading volume in 2021, according to data from DappRadar. OpenSea led the charge with more than $15 billion of trading volume in 2021, per Dune Analytics.

Just over 185,000 Ethereum wallets are eligible for the LOOKS airdrop, according to Dune Analytics, with over 74 million LOOKS tokens already claimed as of this writing. LOOKS is currently priced at $3.71, per data from CoinGecko, down 16% from its peak price of $4.52 set early yesterday.

The marketplace also provides additional rewards to traders for buying and selling NFTs in eligible, verified collections—which currently includes the Bored Ape Yacht Club, Meebits, and others. Currently, the marketplace is providing over 2.86 million LOOKS tokens per day, or about $10.6 million worth, although the amount will gradually diminish over the next year.

But with LooksRare trading volume now topping $235 million since yesterday’s launch, it appears that some users may be trading NFTs at hyper-inflated prices to manipulate the trading rewards model. According to data from CryptoSlam, royalty-free collections such as Meebits and Loot have seen trading volume increases of several thousand percent each today.

Included in that are single NFT sales that look out of place, such as a single Loot NFT that was sold back and forth several times between the same two wallets, generating millions of dollars’ worth of ETH trading volume in the process. LooksRare suggests on its website that its rewards model minimizes the potential for wash trading, but with the initial trading rewards calculation period about to end, it appears that some users are gaming the system. The platform has yet to comment publicly on the apparent rewards manipulation.

In addition to its community-driven token airdrop and rewards model, LooksRare has other unique features. One is the ability to place an offer on any NFT from a particular collection, which any holder can then fulfill if they choose. For example, notable collector Pranksy offered 10.5 ETH ($33,900) for any NFT from the Doodles profile picture project.

Pranksy is one of the angel investors in the project, which was co-founded by a pseudonymous duo and features a total team of 11 people. Other investors apparently include Pudgy Penguins co-creator ColeThereum and NFT collector DeeZe. Decrypt inquired with the LooksRare team about the size of the funding round and additional details but did not immediately hear back.

LooksRare arrives at a time of ongoing success for OpenSea, but also frustration across the NFT community. OpenSea has faced technical hitches lately, including a period of extended downtime on Sunday that CEO Devin Finzer described as “unacceptable.” He wrote that OpenSea will ramp up hiring of engineers and customer service employees.

Furthermore, new OpenSea Chief Financial Officer Brian Roberts hinted in December that the company is considering an initial public offering (IPO), frustrating some longtime users that hoped OpenSea would launch a token instead. Roberts walked back his comments, but the frustration has potentially created an opening for a token-driven rival that rewards users.

Despite all of that, OpenSea—which was recently valued at $13.3 billion—is currently on track for its best month to date in Ethereum trading volume. That figure sits at $2.27 billion already, only one-third of the way into the month, while OpenSea’s best month to date was August 2021 with nearly $3.43 billion in ETH trading volume.

Editor's note: This article was updated after publication to provide up-to-date 24-hour trading volume figures for LooksRare and to include additional context regarding how users may be gaming the exchange's token reward system.