If you ever want an example of just how fast this space moves, take a $LOOK. In the space of 5 days we have seen so many things literally blown up in the NFT world. Metaphorical firework shows are a real time event pretty much on the regular. People's lives are changing. For good or ill - it is nothing short of spectacular to observe.
One thing is for sure, a lot of people are interested in the LooksRareNFT marketplace at the moment and that can be seen by its incredible trading volume.
Having an NFT such as Meebits hitting a trading volume that ridiculously high is no joke after all, especially with a new marketplace. As a result, It has been the talk of Twitter town this week:
So what is LooksRare, the $LOOKS token and why are people all over them right now?
$LOOKS are the token for the LooksRare marketplace which states itself to be an NFT trading platform where people can stake on trading volume - as well as other functionality and gain more tokens as rewards. It is a community FIRST project that certain people in the Twitter space seem to think may be able to take on the likes of OpenSea as a trading platform.
Competition in NFT trading platforms, or anything for that matter, can be a good thing. OpenSea has been a dominant force over the last year and having a project with a community first ethos can make things interesting.
So, how does it work? It's stated that all of the money accrued from trading fees go to the people staking with $LOOKS. Stake more looks, make more looks.
Wash Trading - Connection or No?
LooksRare has seen a massive amount of trading volume since its recent inception. Which in turn came with a bit of controversy and questions regarding whales possibly "wash trading"
So what is wash trading?
It's an unfortunate reality within the Crypto market, the same as it is in the old world markets. It's something that is also bleeding into the NFT space here and there and has been for some time. In order to make educated trades, you need reliable data. Liquidity within whatever exchange you are looking to work within is hard to judge when people are purposefully influencing trade volume through a coordinated effort. It's an exploit.
Wash trading breaks things, it plays with data. It's massively nasty when it's executed in the right way and can suck in the unknowing like a blackhole.
In this case, it is the trade volume on LooksRare that's blowing up. To reward its users, LooksRare gives them $LOOKS tokens. These are capped at 1 billion with 25% broken down to 10% for DEV, 10% founding team, 3.3% for strategic sales and finally 1.7% for liquidity management. This leaves 75% for the community. Since 100% of trading is rewarded at LooksRare, the community has the choice of receiving either $LOOKS tokens, which will automatically be compounded, or GWEI which will not be compounded regardless of the situation.
These trading rewards account for 41.4% of the community liquidity. The rest is divided into airdrops and staking rewards. This divide limits the amount of $LOOKS tokens ETH bots can generate by buying and selling the same NFT between themselves. So this wouldn't appear to be in the realm of wash trading, but this certainly isn't financial advice.
In the end, wash trading is wash trading - staking is staking. It could be considered a core element of the De Fi community in some ways and It's nothing new to the space.
There seems to be a bit of a divide over this as usual, but maybe not as big a divide as we have all seen in the past. The trading volume is off the charts and people are into it. Is it just another flash in the pan? A high flying quick bucks situation? Or something bigger that can actually take on a marketplace like OpenSea?
Whether or not it will last is anybody's guess this early on, but it's interesting if nothing else. Looking at this space you can see new projects exploding or failing everyday. Some of them have the staying power, some of them don't - it goes with the territory I suppose.
For the time being, we will be $LOOKing at the project from here and seeing where it goes.