LooksRare platform rose to the highest of the NFT market by way of transaction quantity this 12 months. Nevertheless, it appears a lot of the exercise on the platform is because of wash gross sales. Apparently, the majority of the transactions are because of folks promoting NFTs to themselves to earn extra cash.
Final January, two nameless co-founders — Zodd and Guts — created the platform to problem the NFT market chief OpenSea. The positioning attracted NFT lovers with new options. Virtually all of those ventures revolved across the LOOKS token.
Bulk of LooksRare Transactions Are Wash Gross sales
LooksRare provides token rewards for customers who purchase and promote NFTs on the positioning. Customers then used this data to their benefit. They bought NFTs forwards and backwards between their Ethereum wallets by way of artificially inflated costs. By doing so, they’ll earn extra in LOOKS rewards than they’d spend on LooksRare’s 2% market charge and the Ethereum community’s personal fuel charges.
Based on NFT analytics agency CryptoSlam, these actions generated $18 billion within the platform’s buying and selling quantity. This implies round 95 p.c of all exercise on the platform is perhaps wash gross sales.
As of writing, LooksRare representatives haven’t commented on this data. They can’t be reached since there are solely pseudonyms and titles on the “LooksRare Staff” on their web site.
LooksRare additionally allegedly masked the cooling demand within the NFT market. Based on Dune Analytics information, OpenSea’s whole gross sales have fallen each month since January. As well as, DappRadar information states the positioning’s gross sales quantity went down by 67% within the final 30 days. The variety of merchants has decreased by 23%.
With the lower of exercise within the NFT market not too long ago and LooksRare’s buying and selling rewards set to drop considerably, we’ll see if it would stay worthwhile for wash merchants to prey on the platform’s rewards mannequin.
Source: NFT Evening