LooksRare Token LOOKS

LooksRare Basics in One Place

LooksRare is a decentralized NFT (non-fungible token) marketplace that allows users to buy, sell, and trade unique digital assets such as artwork, collectibles, and more. Built on the Ethereum network, it offers a secure and transparent platform for buying and selling NFTs.

The marketplace features a wide range of NFTs from emerging and established artists, making it a hub for collectors and enthusiasts to discover new and rare digital assets.

A Bit of History

LooksRare marketplace was founded in January 2022 by a duo of certain Zodd and Guts. Besides their nicknames, not much else is known about the co-founders of LooksRare. At that time pretty much the whole NFT market was controlled by OpenSea. 

So LooksRare did the same thing that SushiSwap did to Uniswap - they launched a Vampire attack. Users with more than 3 ETH worth of NFTs were airdropped LOOKS tokens with a condition that they had to list an NFT on the LooksRare marketplace. LooksRare users surged, as they continued to gain more incentives by staking LOOKS and trading NFTs. The LOOKS staking APR at that time was over an astonishing 500 %.

However, users quickly found out that they could easily buy and sell NFTs between their own addresses and still gain LOOKS incentives for that. The majority of daily trading volume was generated by a few addresses doing this so-called Wash trading. After a while, the incentives started to dry out and Wash trading became no longer profitable. LooksRare has been growing on a more sustainable trading volume since then.

LOOKS Tokenomics and Utility

LOOKS is the utility token of the LooksRare platform. The total supply is hard-capped at 1 billion LOOKS, the majority of which (75 %) is assigned to the community. There are many types of rewards associated with holding or staking the LOOKS tokens.

• Staking - users earn a portion of platform fees by committing LOOKS tokens
• Earning LOOKS for eligible NFT listings
• Trading rewards for both buyers and sellers

LOOKS Staking

Every time an NFT sale is processed through the LooksRare marketplace, a 2% fee is collected in a form of wrapped ETH. The fees accrued this way are later redistributed to the LOOKS stakers at the end of each block period. 

LooksRare platform offers two types of staking - in the first vault, users deposit LOOKS to auto-compound and earn more LOOKS. In the second (standard) vault LOOKS are deposited and the rewards are distributed in WETH + LOOKS. Bear in mind that the APY and APR may fluctuate heavily based on market conditions.

Trading and Listing Rewards

Users can earn LOOKS by listing their NFTs for sale granted they meet certain criteria of the platform. These criteria include for example price exceeding 1.4x of the floor price or a high 24-hour volume.

Both buyers and sellers can earn LOOKS rewards from transactions based on their trading volume. Trading rewards are calculated on a daily basis and distributed 2 hours after each day ends. The trading rewards program will last for approximately 721 days, after which all LOOKS token emissions will stop and the ecosystem will be self-sustaining.

Platform Features

The whole utility of the LooksRare platform revolves around providing a space where creators can list and sell their NFTs while helping collectors with finding new hidden pieces.

NFT Marketplace

In general, NFT marketplaces are platforms that allow for the buying, selling, and trading of non-fungible tokens (NFTs). NFTs are unique tokens that represent the ownership of a specific piece of content, such as a piece of art, music, or video. NFTs are stored on a blockchain, providing a secure and transparent record of ownership.

LooksRare offers a wide range of NFTs from established and emerging artists, creating a space for collectors and enthusiasts to discover new and rare digital assets. The advanced search capabilities of the LooksRare platform allow users to easily find the NFTs they are looking for using filters such as keywords, categories, and more.

NFT marketplaces are decentralized, meaning that all transactions are secured and recorded on a blockchain. The main added value of such marketplaces is establishing a connection between NFT creators and collectors. Without decentralized listings, it would have been very difficult to find the people interested in making a deal.

Listing and Selling NFTs

Basically, any user can list their creations on LooksRare and it is quite easy to do so. To create a listing, it is necessary to have an Ethereum wallet and some ETH for gas fees. Furthermore, users have to provide a contract of the NTF they wish to list accompanied by a description of some sort.

The NFTs are listed for a fixed price denominated in wETH, but if the price seems unreasonable, users are able to make an offering. It is then up to the seller, whether to accept the offering.

Upon listing a new NFT, users also define the creator royalty fee. Royalty is a certain percentage of the price that is paid to the creator every time the specific NTF is sold in a public auction. Creators will receive this royalty automatically in wETH.

Buying

LooksRare features a user-friendly search engine that can recommend and help users find interesting NFTs to purchase. On the platform, users have the option to buy NFTs at the listed price or participate in auctions by bidding at the price they wish to pay. It's important to note that buying NFTs may result in paying high Ethereum gas fees.

A base fee of 2 % is collected on behalf of the platform and distributed to LOOKS token stakers. A royalty fee is also paid to the NFT creator, which was set in the event of listing.

Collection Management

Users are able to set up their NFT collections anywhere on the Ethereum network, as LooksRare indexes all of it. Creating collections is as straightforward as listing a single NFT, important parts include descriptions and links to social media.

Be aware of malicious creators who create copies of well-known collections in order to trick buyers. To prevent this from happening, LooksRare provides a verification checkmark. This checkmark means that the collection was not created in order to scam users and it has a significant trading volume of 250 ETH cumulative.

LooksRare vs OpenSea

When comparing the two, it is important to note that LooksRare is not a fork of OpenSea and thus has a custom build smart contracts. Features of both are similar, but LooksRare has a very different incentive structure and lower transaction fees, which gave them a competitive edge. The core features remain more or less the same, with OpenSea supporting many networks and LooksRare solely on Ethereum.

Security and Governance

To this day LooksRare has been subjected to multiple audits by independent auditors. This type of security check helps to mitigate concerns about smart contract code and bugs. The platform also has active bug bounties with attractive rewards to eliminate any potential leftover risks. 

Anyone deciding to enter an NFT marketplace such as LooksRare should keep in mind the market risks associated with NFT trading. These include very high volatility, lack of utility of most projects, and numerous fraudulent/scam schemes. High Ethereum gas fees can also be a major obstacle for many users. Overall, NFT marketplaces are a new and experimental technology, anyone wanting to participate should do so with caution.

The governance model is projected to use LOOKS tokens as a means for voting on changes and upgrades to the protocol. At this time the executive power remains within the core developer team, making the protocol somewhat centralized.

Key Takeaways:

• LooksRare is a community-oriented NFT marketplace, allowing users to list, sell and buy NFTs
• The native token of the platform is LOOKS
• LOOKS can be staked to receive a share of the collected platform fees (LOOKS + wETH)
• Eligible NFT listings generate LOOKS rewards
• Users are incentivized to actively trade - both buyers and sellers receive LOOKS