LooksRare NFT Marketplace Has Become OpenSea’s Biggest Competitor

[Updated March 22, 2022]

LooksRare, an NFT marketplace that went live on January 10, 2022, made a big splash with its arrival in the NFT space. LooksRare’s launch included a token airdrop for NFT users. Notably, it gave its tokens to users of OpenSea – the platform it is trying to replace as the go-to marketplace for NFTs.

The LooksRare Motto is, “By NFT People, For NFT People”

After months of development, and a short week of hype and marketing, LooksRare launched its NFT marketplace to the public. It said the following in its launch blog post:

“LooksRare is the community-first NFT marketplace that actively rewards traders, collectors, and creators for participating.”

In other words, LooksRare has presented itself as an NFT marketplace answering many things that the community has long asked for.

LooksRare sets its NFT marketplace apart from OpenSea in a few key ways. To list a few of them, LooksRare has a lower transaction fee of 2%, in comparison to the 2.5% fee on OpenSea. What’s more, it promises to give 100% of all platform fees to those who stake the $LOOKS token.

Another key point about the LooksRare marketplace is how it is handling derivative NFT projects. That is to say, NFTs that are clearly based on existing NFT collections. LooksRare is taking the stance that it will not take down or withhold verified status from derivative projects, “as long as their actions aren’t malicious”.

OpenSea has infamously taken down derivatives of high-profile NFT projects in the past. To be sure, the NFT community is split on how they feel about derivatives. Some people agree that they shouldn’t exist, while others believe that trying to prevent derivative NFTs goes against the tenants of web3.

The $LOOKS Token Airdrop Lit Up NFT Twitter on Launch Day

Overall there was a lot of excitement around the launch of the LooksRare NFT marketplace. Indeed, much of this was due to the airdrop of the $LOOKS token on launch day.

To explain, anyone who traded 3 or more ETH on OpenSea between June 16th and December 16th, 2021 became eligible to claim $LOOKS. In addition, users needed to list an NFT on LooksRare to claim their tokens.

Interestingly, this is similar to the approach that OpenDAO took when it launched its $SOS token airdrop at the end of 2021. However, the two groups behind the airdrops have wholly different goals. For one thing, OpenDAO was willing to assist OpenSea in some ways. In contrast, the LooksRare NFT marketplace is a direct competitor.

$LOOKS is more than just some more airdrop hype though. In fact, it’s the native token of the LooksRare NFT marketplace. Users can earn it by trading NFTs from certain collections. Not only that, but users can also earn $LOOKS from buying or selling an NFT from a collection with over 1,000 ETH in trading volume.

Finally, $LOOKS holders can stake their token to earn staking rewards. As of March 21, 2022, the annual percentage rate (APR) for staking $LOOKS is hovering around 170%. At the initial time of publication (Jan. 11, 2022), the APR was 719%. However, and as was mentioned at that time, that figure was always likely to decrease over time.

LooksRare launched amidst widespread frustration with OpenSea

All in all, the LooksRare marketplace came out right when NFT owners were most clamoring for other options to trade NFTs. At that time (and still to this day, though to a somewhat lesser extent) OpenSea had become a popular target of the NFT space’s frustration for many reasons. For example, there’s the accusation that OpenSea represents centralization. There’s also confusion around the process by which it verifies NFT collections.

Significantly, in the weeks after LooksRare launched OpenSea faced tremendous backlash over a “listing bug”. To sum up, bad actors found a way to exploit how users delisted NFTs on OpenSea.

This resulted in a number of high-value NFTs like Bored Ape Yacht Club and Cool Cats NFTs getting sniped for prices far lower than their floor prices at the time. OpenSea was eventually able to address the issue, but not before weeks of daily outrage from the NFT community.

How does LooksRare stack up against OpenSea today?

Between frustrations with OpenSea, and LooksRare’s attractive features, the NFT marketplace has gained significant ground on OpenSea over the past couple of months. To illustrate, DappRadar puts LooksRare as the second-ranked marketplace behind OpenSea by all-time sales volume.

According to those figures, OpenSea, which launched in December 2017, has around 1.4 million total traders on its platform and an all-time sales volume of $23.5 billion (at the time of writing). In comparison, LooksRare has around 46,000 traders and an all-time sales volume of $18.16 billion. Given the gulf in user numbers, LooksRare amassing that trade volume in such a short amount of time is quite astounding.

There are a couple of potential, and non-mutually exclusive, explanations for this. One is that LooksRare has a disproportionate amount of high-value NFT sales, due to it taking a smaller percentage of sales and also its reward of $LOOKS tokens to traders. However, there have been accusations that these numbers are inflated due to a high occurrence of wash trading on the LooksRare marketplace.

LooksRare NFT marketplace has added some new features since its launch

No-code minting courtesy of Manifold

The brand new feature allows LooksRare users to mint and sell their very own NFTs directly on LooksRare. All with no coding required. LooksRare enlisted the help of Manifold for the feature. Evidently, while this won’t be a “lazy minting” option like OpenSea’s, it does appear that users will be able to deploy their own custom smart contract on LooksRare, thanks to Manifold.

Floor prices by trait on LooksRare NFT marketplace

LooksRare launched this exciting feature last month. Basically, it allows users to see the floor prices of individual traits in an NFT collection. This is an incredibly useful tool for making buying decisions. In addition, this is a feature that OpenSea doesn’t have at the current time.

A much-wanted delisting warning!

LooksRare spotted an opportunity, shipping this new feature at the height of the NFT community’s anger over the OpenSea listing exploit. It meant that users get a clear warning to properly delist their NFTs before transferring them anywhere. Thus, they could avoid the exploit that caused so many to lose their valuable assets. In fairness, OpenSea has made multiple updates since the issue arose to attempt to address it.

 

All things considered, it’s still too early to predict how LooksRare will fare in the future. Even so, it has certainly proven itself as a valuable competitor to OpenSea.

Of course, LooksRare doesn’t have nearly as many users at this time. By the same token, its impressive sales volume doesn’t tell the full story. Nevertheless, OpenSea’s dominance of the field meant it had far less of an incentive to innovate and improve upon its user experience. Given that, it seems like NFT traders are the ultimate winners here. After all, when a new, buzzy marketplace enters the space, it pushes it forward, one way or another.