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LooksRare: An Introduction to OpenSea's Newest Rival

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LooksRare: An Introduction to OpenSea's Newest Rival

What is LooksRare?

Let’s start with a better question – what isn’t LooksRare.org?  A highly anticipated NFT marketplace, LooksRare rewards users for buying and selling their NFTs via their native ecosystem token, $LOOKS. The platform launched to the public early on Monday, January 10, along with the activation of an initial airdrop claim for the $LOOKS token. Any user who had previously traded greater than three ETH in volume on OpenSea between June 16 and December 16 of 2021 was eligible to claim $LOOKS upon the listing of one NFT. Users have approximately nine days remaining to claim their tokens. If you have not done so, refer to our guide to claiming $LOOKS in three simple steps. 

The platform has a similar look and feel to OpenSea, but has unique features that could prove to be game-changing for how people buy and sell their NFTs. 

1. All marketplace fees (2%) are returned to $LOOKS stakers.

Not only are fees lower when compared to that of OpenSea (2.5%) but the fees for trading on LooksRare are all proportionally divided amongst $LOOKS token stakers. After purchasing or claiming the $LOOKS token, users can stake their tokens via the "Rewards" tab on LooksRare.org.

2. Users receive $LOOKS tokens for buying and selling NFTs.

Just for buying and selling NFTs on eligible collections, users will be rewarded with an amount of $LOOKS tokens. Eligible collections are denoted with the LooksRare logo next to their collection name. 

3. Trading, Listing, and other UI improvements create an enhanced user experience.

Certain features, like the ability to bid across an entire collection stand to provide an enhanced user experience that OpenSea does not presently support. 

What Can I Do On LooksRare? 

The home page presents the usual options: Explore, Collections, Rewards, and Wallet.  Let's take a closer look at the features LooksRare has to offer below. 

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Explore

On the Explore tab users can view NFT collections currently on the site and an activity feed that shows any transaction that takes place – listings, purchases, offers, etc.  This page can be used to identify “hot” collections that are seeing high transaction volume or to discover new projects. The traditional filters are visible however some features like the sorting drop down are marked as “Coming Soon."  At present time, these features do not differentiate much from what OpenSea offers when exploring NFT collections. 

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Collections

In the collections tab users can view the top traded NFT collections on the site with Floor, Total Volume, and 24H Volume statistics. Collections can be seen with two distinct markings next to their name – a blue checkmark for “Verified” and green LooksRare logo for Rewards enabled collections. These symbols are very important to the mechanics of the site and dictate whether a user will be able to claim $LOOKS rewards after buying or selling an NFT that is part of an eligible collection. Upon launch the site has already verified numerous collections based on OpenSea trading data, and has turned rewards on for at least 125 collections. Projects are not currently able to manually request verification, but the team has stated they are proactively verifying more collections daily.

LooksRare has laid out the criteria to become a verified collection in their supporting documents:

  • Legitimacy: this one is simple, don’t make a copycat of an existing collection claiming to be the genesis or original project.
  • Volume: LooksRare requires a collection to have at least a 250 ETH in all-time trading volume in order to be considered for verification. OpenSea currently only requires a collection to reach 100 ETH in volume to request verification. Collections must pass both the Legitimacy and Volume criteria to become verified, unless they are deemed Notable.
  • Notable:  collections may be eligible to become verified without meeting the volume criteria if they are affiliated with a “high-profile public figure or organization." While arbitrary, OpenSea also has a provision for notable accounts.

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Rewards

Wen token? Believe it or not, LooksRare is giving the community what they’ve always wanted – a marketplace native token that rewards users for engaging with the platform. $LOOKS has a maximum supply of 1,000,000,000 tokens and is slowly emitted over the course of approximately two years. The team has provided initial liquidity on Uniswap so users can freely buy and sell $LOOKS as they see fit.  As of today, there are three unique ways a user can earn $LOOKS tokens: 

1. Trading Rewards

Upon launching, LooksRare has already granted the green “Rewards” badge to 125 collections based on OpenSea trading volume and other criteria.  Going forward, once a collection has reached 1000 ETH in trading volume, the rewards badge will automatically be granted.  This is a key difference from the verification badge, which must be requested by the project team.  Collections who receive the green badge will have their $LOOKS rewards turned on the following day.  Detailed information on the reward periods can be found in the LooksRare supporting documents.

When a user buys or sells an NFT that is part of an eligible collection they are rewarded a percentage of all $LOOKS tokens distributed by the platform that day based on their proportion of volume to the overall eligible collection volume.  LooksRare is incentivizing users to begin trading their NFTs on day one by boosting the amount of $LOOKS allocated in the first 30 days and reducing it over time.

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2. Staking $LOOKS

In addition to receiving looks from actively trading on the site, users can also stake their $LOOKS to earn additional rewards over the course of the next year.  Similar to the trading rewards emission schedule, LooksRare is incentivizing single-sided staking with boosted reward allocations for the next 30 days. In addition to $LOOKS rewards, stakers are the primary beneficiary of wETH sales fees the site collects. Once a day all wETH trading fees are pooled and distributed amongst users who have staked $LOOKS, proportional to their share of the staking pool. Redistributing sales fees to the users is one of the biggest differentiators LooksRare has relative to OpenSea and other NFT marketplaces.

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3. Providing Liquidity for the $LOOKS/WETH Pair

To ensure there is always sufficient liquidity for $LOOKS, the team has allocated additional rewards for users who provide liquidity for LOOKS/wETH on Uniswap.  Liquidity providers will receive the normal trading fees taken by Uniswap as well as their share of the 10 $LOOKS per block that is distributed to all liquidity providers.  It is important to note that while there may be additional pools available on other exchanges (i.e. Sushiswap), the additional $LOOKS rewards are only given to users who provide their tokens to the designated pool. More information on being a liquidity provider in the LOOKS/WETH pool can be found on LooksRare’s “About” section. For information on using Uniswap, refer to our "How To Use Uniswap" guide! 

Buying and Selling NFTs on LooksRare

While mechanics to trade NFTs on LooksRare are very similar to OpenSea, there are several quality-of-life improvements the team has implemented to make the user experience more enjoyable and cost effective. 

The first improvement solves a pain point many have experienced on OpenSea – having to receive funds in wETH when accepting an offer. LooksRare has built functionality into their contracts that lets a user purchase any NFT with ETH, WETH, or a combination of both. This feature will reduce gas costs incurred when wrapping or unwrapping ETH, which could encourage more offers being submitted and/or accepted.

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The next unique feature the marketplace offers that OpenSea lacks is the ability to make a wETH offer for any NFT in the collection without the aid of an automated offer bot. To make an offer across an entire collection select the “Make Collection Offer” button on the collection’s landing page with the desired purchase price and submit. If a seller accepts the offer the transaction will be executed and other sellers will be unable to accept it. Revoking the offer upon a transaction taking place protects users from having multiple sellers accepting a collection-wide offer at the same time – more encouraging news for marketplace activity. It is important to note, this placing a collection offer makes it possible for any respective NFT holder from that collection to accept the offer, regardless of traits or rarity of the NFT. 

Lastly, when a user wants to delist an NFT on OpenSea they have to complete a separate transaction for every price it had been listed at. Meaning, if an NFT is listed at 2 ETH, lowered to 1.5, and lowered again to 1 the seller would have to complete three unique transactions – and pay gas fees – to completely remove the NFT from the marketplace. LooksRare has solved this expensive problem for its users. When canceling a listing that has had one or more price decreases, the seller only has to complete one transaction to remove it from the marketplace. Referring to our "How To Save On Gas Fees" article will not be quite as applicable for LooksRare. 

Can LooksRare Win The NFT Marketplace Battle?

Only live for a few days, it is impossible to know the magnitude of LooksRare's potential success. On paper, LooksRare has the tools to compete with OpenSea as an NFT marketplace.

Lower marketplace fees that get returned to users? Done. 

Rewarding users who buy, sell, and support the platform via staking $LOOKS tokens? Check. 

Implementing features out of the box that make user experience simpler and less expensive? Absolutely. 

Too early to tell, but look out for this marketplace in 2022, they have a lot in store.

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