The Rise of NFT Marketplaces And The LooksRare Conundrum


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The blockchain world today is evolving rapidly alongside innovative technology and ideas of a digital environment or Metaverse. Non fungible tokens, NFTs, play a crucial role in the digitization of art, strengthening of tech communities, and flex. As NFTs gradually attain mainstream status, marketplaces designed to allow traders to sell, buy and mint digital assets are becoming popular.

The NFT trading sector experienced a tremendous rise in 2021, with collections and marketplaces moving from a $106 million valuation in 2020 to $44.2 billion. In response to this incredible growth speed, stakeholders, both individuals and firms are actively devising ways of engaging NFTs and their marketplaces.

A great thing about the NFT market is that there are several options to choose from, thus bringing a sense of competition to investors and stakeholders alike. To ease the use and existence of these NFTs, marketplaces solely designed for human participation are speedily being adopted globally.

One such platform is LooksRare, an ecosystem which offers rewards for participation. This decentralized establishment rewards vital market players like collectors and creators for their role in its operation. The rewards come in the form of $LOOKS, the native token of the LooksRare marketplace.  

LooksRare, the brainchild of Zodd and Guts, a pseudonym for its co-founders, saw an introduction to the NFT market on January 10, 2022. The platform was introduced into the NFT space through a vampire attack strategy, which concentrates on luring users from similar existing platforms. OpenSea, a popular NFT marketplace, was the platform’s focus at its launch. Presently, it is regarded as an alternative to the market leaders.

LooksRare And Users’ Reception

Transactions on this marketplace have gained traction globally as it continues to earn massive sales amounts even with a recent platform. More interesting is that its vast sales amounts were obtained with only a tiny percentage of OpenSea’s users. In January, LooksRare recorded sales five times higher than their main competitor with just 3000 users instead of the 70,000 of the latter. Owing to such high records, some investors found the figures too good to be true.  

However, a careful look at the platform’s approach and strategy would assure market players of the possibility of such occurrences. The platform made its launch by utilizing certain features to draw users to them, and a majority of people embraced this. With this, it is evident that LooksRare is transforming the face of NFT marketplaces and laying a foundation for more expansive competition in the coming years.

The platform also rewards its users with $LOOKS, proportional to their trading volume, and although this has raised concerns about wash trading, strategies have been put in place to discourage such action. In addition, the platform continues to develop and offer new features which threaten the dominance of OpenSea in the NFT market. Another beautiful aspect of this platform is that all NFT collections present on the Ethereumblockchain are available to its users, even certain ones that are not listed on OpenSea.

Conclusion

LooksRare continues to attract users with its reward system for traders and stakers. Being a decentralized platform focused on community building and development also gives it an edge over other NFT marketplaces. The availability of numerous new features also support its ability to meet the different NFT needs of its users.

With LooksRare and its market success, there is no doubt that the NFT marketplaces are rapidly evolving. Existing platforms like OpenSea would have to develop strategies and implement incentives to retain their users and exert market dominance. The continuous existence of LooksRare would also give rise to other platforms, thus leading to an expansion in the development of these marketplaces.

Published April 15th, 2022



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