Footprint Analytics: Will LooksRare overtake OpenSea?

On January 10, NFT marketplace LooksRare issued its token – $LOOKS – and airdropped it to the community. The next day, the platform exceeded $115 million in trading volume, surpassing OpenSea as the highest traded NFT marketplace.

Will it continue to grow in 2022? Here are its advantages and challenges.

LooksRare: A Web 3.0 NFT marketplace

LooksRare was created by two anonymous co-founders – Zodd and Guts – with the slogan “By NFT People, For NFT People”.

Taking a shot at OpenSea, LooksRare, in its mission statement, announced it was “tired of the de-platforming of creators, and the decision-makers who value business over community, seeking IPO instead of benefiting the communities that got them there.”

While there are plenty of NFT marketplaces available these days, LooksRare has been able to innovate in a few key areas.

Community-first NFT Market

Here are LooksRare’s main UVPs, as explained in its product and marketing roadmaps. 

• Community-first: 75% of the total tokens will be allocated to the community to attract new members and continuously reward them.
• Revenue decentralisation: 100% of trading fees are earned by $LOOKS stakers.
• Decentralised management of the NFT projects: Unlike OpenSea, which can take down NFT projects at will, LooksRare’s position is that it will not take down or freeze the status of derivative projects as long as “they are not malicious”.

Beneficial benefit distribution for users

LooksRare offers a cheaper and more friendly trading experience than OpenSea.

Footprint Analytics – Comparison of OpenSea and LoosRare

It should be noted that OpenSea is not the first NFT market, and is not some just some unpolished first attempt at an NFT marketplace. Rather, it has developed its product over several years to gain more than 95% of the market share. OpenSea’s innovations include:

• The first unlicensed on-list, lowering the operational threshold for NFT creators.
• A marketplace with a wide range of NFT asset types, including artwork, music, and domain names.
• A powerful classification system with tags based on NFT characteristics (e.g., a user can search for a BAYC ape based on clothing, eye color, accessories, etc.) 

That is to say, it won’t be easy for LooksRare to overtake OpenSea. However, the upstart has also implemented tag filtering, but also offers lower fees, more revenue distribution, and optimized offer methods and payment options.

Trading rewards: A double-edged sword

There are three ways to earn $LOOKS on LooksRare

• Earn by trading: Earn $LOOKS every time you buy or sell NFT on LooksRare.
• Earn by staking: Stake $LOOKS to earn over 600% APY. 100% of LooksRare’s trading fees are redistributed proportionally to $LOOKS stakers. 
• Earn by providing liquidity: Provide liquidity to the $LOOKS-ETH pair on Uniswap V2 to earn additional $LOOKS rewards on top of Uniswap’s regular liquidity provider rewards.

LooksRare has grown primarily on its tokenomics and reward model. Successfully attracting a pool of trading users, LooksRare now has an average daily trading volume of $130 million, surpassing OpenSea briefly several times.

Footprint Analytics – Comparison of trading volume of OpenSea and LooksRare

However, this has also created the problem of “wash trading”, where users trade repeatedly just to get the rewards. Looking at Footprint Analytics data from a random day in January, LooksRare saw an average of $197,068 traded per person, while that figure is $2,,979 million per person on OpenSea. 

Footprint Analytics – Comparison of of trading users of OpenSea and LoosRare

LooksRare will halve its trading and staking rewards on February 10. This will reveal the true strength of the marketplace. 

Will LooksRare become the primary NFT marketplace?

Probably not, at least in the short term.

1. Although LooksRare’s trading volume has overtaken OpenSea on several occasions, OpenSea has maintained a steady trading volume with no significant drops.

Footprint Analytics – Trading Volume of NFT Marketplace

2. LooksRare has not yet been able to attract mainstream NFT projects. The top 5 NFT projects currently trading on LooksRare previously had low transactions and a small audience. Mainstream projects such as CrpytoPunks have not joined.

Footprint Analytics – Top 5 NFT on LooksRare

3. LooksRare’s market share is small.

In terms of transaction volume, OpenSea still holds 90% of the market share.

In terms of user volume, the percentage of users trading on LooksRare was only 0.83% as of February 6.

Footprint Analytics – Trading Users of NFT Marketplace

Summary

OpenSea is to the NFT market what Ethereum is to DeFi.

At the beginning of 2021, Ethereum was leading the DeFi chain with a 95.88% share, while OpenSea is currently leading with over 95% market share. However, since 2021, Ethereum has been challenged by the emerging chains and Ethereum’s market share has now dropped to 57%.

NFT marketplaces will likely develop in the same way. That is to say, new upstarts will continue to grow concurrently with OpenSea, but overtaking the leader is neither an easy task nor inevitable. 

What is Footprint?

Footprint Analytics is an all-in-one analysis platform to visualize blockchain data and discover insights. It cleans and integrates on-chain data so users of any experience level can quickly start researching tokens, projects and protocols. With over a thousand dashboard templates plus a drag-and-drop interface, anyone can build their own customized charts in minutes. Uncover blockchain data and invest smarter with Footprint.  

Footprint Website：https://www.footprint.network/

Discord：https://discord.gg/3HYaR6USM7

Twitter: https://twitter.com/Footprint_DeFi