Is LooksRare NFT legit?
LooksRare is one of OpenSea's direct competitors that is aiming to steal market share with its staking opportunities.
Looks Rare is the community-first NFT marketplace that actively rewards traders, collectors, and creators for participating. At first glance, it is one of those things that look attractive and unique, and everyone adores it. Like the Chainlink ecosystem, you sure love it, but not sure if you actually should!
Enter the Marketplace!
Everyone should notice that buying and selling NFTs here rewards you with LOOKS tokens, which we will take a closer look at later! The platform fees are shared, and LOOKS stakers earn 100%. Creators, in addition, are treated nicely and receive royalty payments at the moment of sale.
Love the benefits above? Then you will enjoy the custom interactions their ecosystem made - users can make an offer that covers all NFTs in a selected collection. This significantly reduces time waste and endorses you to act quicker.
People can also do something called trait offering. If you have an NFT with a specific trait, you can make this the primary search result and avoid wasting time going through an entire collection.
Lastly, multi-cancelation is always an appreciated feature - cancel multiple orders in a single transaction - I wish this would be implemented across all marketplaces!
Staking looks too good?
Like most marketplaces, LooksRare collects basic sales fees - this is around 2 percent in Wrapped Ether on all NFT sales, excluding private.
When this happens, every 24 hours, these fees are consolidated and distributed to LOOKS stakers per next block. This means 100 percent of the fees are transferred to LOOKS token stakers.
You may ask - when can I claim my rewards? The answer is - anytime! Since some people want instantaneous options and do not feel restricted. But be vary, ‘cause you will pay gas fees for every claim.
Before briefly talking about passive and active staking we should also inform you that private sales do not count for fee sharing - LooksRare is one of those marketplaces that does not take a fee during that process. Therefore it does not contribute to staking rewards.
Active or Passive?
Active stakers are the more significant part of the staking community that LooksRare has. Their staked LOOKS are fully unlocked.
Passive stakers are those who lock their LOOKS but unlock them for staking.
The main difference between active and passive stakers is that LOOKS in passive staking does not earn additional LOOKS while staked.
Additionally, their system has something called "auto-compounding". Pending rewards are often required to be manually staked by users to increase their share of staked tokens. However this wastes both gas and opportunity cost. As such, LooksRare has enabled auto-compounding for all users that stake LOOKS. This means that LOOKS rewards received from the staked LOOKS balance are automatically re-staked into the pool (or compounded) to increase the amount of LOOKS staked.
When users unstake their LOOKS tokens, the amount of compounded rewards and the original staked amount will be withdrawn to the user’s wallet.
“Looks undervalued” is an understatement
When it first came out, it is fair to say that many people were… skeptical. In addition, the platform's code was private and unaudited. Who needs MORE marketplaces for digital nonsense?
But… We commend that the team had ample opportunities to perform a rug pull. LOOKS went up to 7 American dollars at one time, and the market cap was near USD 7 billion - nothing happened.
During the rise of NFTs and overall hype, LooksRare was gaining users regularly, and the trading volume was insane, even though multiple news outlets attacked them with wash sale errors.
No matter the market outlook, LooksRare continues to provide stakers with trading fee rewards, and why should you not jump ship from OpenSea? In addition, it continues adding platform features and hiring data scientists and UX/UI designers - the team is determined to reach a better flow.
This is one of those cases where a community dApp meets a centralized corporate application - just by using LooksRare, people can vote with their activity. No one is forced to buy tokens to support the team, but people will do it anyways as the rewards are enormous, and they are valued 3-4 times underpriced while compared with OpenSea.
Not everything is pretty colors...
Even though it is legitimately undervalued and near bottom, the coin is trashed (from USD 7 billion to USD 170 million!), but it has a lot of reasons to.. dislike it.
Firstly, whenever the wash sale articles attacked the platform, and it held its volume, growth - the company did nothing. There was a lack of reaction. At the time, the % 1000 APY for staking LOOKS and Wrapped Ether was too good, and we know how APY trembled throughout this year.
Secondly - the team is not doxxed - fully private, and all we know is that it’s a stack of WEB 3.0 developers. Their team section has nothing but GitHub, which was stuck with ten commits in total - pretty weak in showing off your technical progress.
Staking functionality is not fishy, but their smart contracts are very simplistic. It does not look like a lot of effort, or unique thinking was put into it.
Remember the growth chart above? Well, here’s the chart now... complete drop in users, volume, and transactions. It makes sense during a winter market, but not a good look overall.
Lastly - there is a correlation between the APY and value. As they continue to release new coins into circulation over the next two years, the price will continue to drop with the APY. There will be short pumps when the market cap spikes, but that’s it. The cherry on top - 61,001,900 (10%) supply of tokens will be unlocked in a month!
Listen… The UX/UI is solid, and the marketplace rewards you for activity! It is simplistic, not complex, and rewards creators and daily users. Staking is also a niche option. In addition, their token right now is in the bin! Given that the market cap is flat, during the next NFT run, it could do a considerable increase.
However... That said, it has multiple issues - socials and team are vaguely covered. Their addressing of problems is very minimal, and interaction with the community is poor. Working behind closed doors is good, but people who hold the token want to see progress - a few integrations that differ from OpenSea won’t change the outcome.
Legit? Yes. Undervalued? Yes. Safe to trade? Yes. Safe to invest? Not really.