Based on its successful performance in 2021, OpenSea likely expected 2022 to be a year of smooth sailing and rising profits. However, the NFT marketplace LooksRare hit the scene like a tidal wave, raising questions about its economy and its place in the NFT industry.
To that end, Coinbase took a deep dive into the rivalry to report on the younger but fast-growing NFT giant.
New fish on the block
While LooksRare got quite a bit of flak thanks to allegations — and then evidence — of intense laundry trading, Coinbase took a slightly different stance. The exchange’s report acknowledged that a small number of users made high-value trades to earn LOOKS tokens. However, the report highlighted the success of LooksRare’s non-wash trading volume, new features for traders and rewards for early adopters.
After laundry trading was taken out of the equation, Coinbase’s report said:
“… the remaining legitimate NFT volume is still more than what NFT marketplaces Rarible, SuperRare, Foundation, Makersplace and Aysnc did in all of 2021 together†
Go for the jugular vein
Coinbase’s report also examined what it called LooksRare’s “vampire attack” — a strategy where a company builds a service to rival an industry leader and offers clear rewards to users who switch sides. In this case, LooksRare picked up on a complaint raised by many OpenSea users. That is the desire for a native token.
In addition, both crypto and non-crypto artists have lashed out at OpenSea over the platform’s handling of allegations of art theft† The bad press has certainly hurt the adoption rate of the prevailing NFT market outside the crypto sector.
On the other hand, it might not be wise to embrace LooksRare right now. Coinbase’s report reminded users that LooksRare’s smart contracts were not audited at the time of launch. In addition, it added that anonymous teams meant users had to look for carpet puller boards.
In short, those new to the metaverse and NFT industry should stick with the vetted players.
don’t look up
While LooksRare’s LOOKS token has hit highs of nearly $7 in the past, LOOKS was trading looks with traders at $3.26 at the time of writing. The token has fallen by 14.25% in the past 24 hours.
Coinbase’s report also revealed,
“Since daily rewards are paid out as a percentage of the day’s volume, for example, if someone can wash the trade to 10% of that day’s volume, they could bring in $1 million in LOOKS.”
This post Coinbase Report Looks Beyond Laundry Trading to Reveal the Truth About OpenSea’s Competitor
was published first on https://ambcrypto.com/coinbase-report-looks-beyond-wash-trading-to-reveal-the-truth-about-openseas-competitor/