LOOKS - Well...looks like we got a rare one here

Asset covered: LooksRare (LOOKS)

While majority of the market continues the downtrend, $LOOKS appears to have decoupled since 17th Jan.


Let's take a quick look (no pun intended).


Price

LOOKS price action - Sanbase

LOOKS' been on a decent run since it started trading, making higher highs and higher lows with decent trading volume as well. That said, the recent run up isn't seeing that much volume compared to when it first launched may indicate we are entering into frothy territory if volume doesn't pick up.



Funding rate

LOOKS funding rate - Coinglass

One of the other drivers for LOOKS' price action can be attributed to majority of leverage traders shorting LOOKS with every chance they can get (naturally so give that majority of the crypto market is on a downtrend so far), as it can be observed from the funding rates' being consistently in the negative territory since 12th Jan 2022.


That said, over leveraged LONGS did get rekt at the start according to liquidation data. But once they got flushed out, it was go time.

LOOKS liquidations - Coinglass

As the price of LOOKS continues upwards, overleveraged SHORTS should be sweating now. Some have already been liquidated, and those looking to avoid liquidation will have to take a lost and close their positions by buying back LOOKS.



So......


What is LOOKS?

LOOKS is a token that was airdropped recently for the platform LooksRare (build by an Anon team) , a community-first NFT marketplace that actively rewards traders, collectors and creators for participating.


Part of being community-first means that LooksRare rewards, empowers, and gives back to the platform's users and creators.

  • ğŸ’Ž Get rewarded - Users that buy or sell NFTs from eligible collections earn LOOKS tokens.
  • 🤝 Share the platform fees - 100% of trading fees are earned by LOOKS stakers.
  • ⚡️ Creators get paid instantly - Creators get royalty payments at the moment of sale.

You can learn more about it here.



The Airdrop

LooksRare recorded all trading volume conducted by all users of Opensea from Ethereum Block 12642194 to Block 13812868 (16th Jun 2021 to 16th Dec 2021). Only volume on the Ethereum blockchain was recorded: Polygon blockchain (MATIC) volume was not included.


In order to claim the airdrop though, you'll need to list any ERC-721 or ERC-1155 NFT on the LooksRare exchange.


There'll be a 7-10 days window for claiming and will be ending soon.


You can learn more about how the the Airdrop works here.


Wondering how the airdrop is looking? hildobby has create a dashboard for it:

LOOKS airdrop stats - hilldobby

More than 70% of LOOKS were claimed within the first 3 days of launch.


During which, as observed by MoonOverlord, a good amount of airdrop participants sold their $LOOKS into the hands of whales. Probably due to the lackluster performance of airdropped tokens lately ($SOS, $ENS, $WTF).

LOOKS initial trading action

One week in and it still appears that some eligible users might know that they have LOOKS to be claimed as only 63.54% of eligible addresses made the claim.


All unclaimed LOOKS will return to the treasury once the claim period is up. So be sure to claim yours if you have not already.



Looksrare vs Opensea

With Looksrare being an open vampire attack on Opensea, let's take a look at how it's faring so far.


Valuation

LOOKS - $6.2bn (FDV at current prices)

Opensea - $13.3bn (in its recent raise)


Not too shabby, given that LOOKS launched was just around 1 week ago, it's now almost at 50% of Opensea's valuation.


One does wonder just how crazy valuations will go to given that Coinbase, and now Meta is entering into the NFT exchange space.


Platform stats

hildobby has create a nice dashboard comparing both platform's usage:

Looksrare vs Opensea - hildobby

What really stands out is LooksRare's trading volume surpassing Opensea's significantly.


Here's why:


Majority of the trading volume you are seeing now on LooksRare is done by users with large amount of ETH and wash trading NFTs with 0% Royalty to take advantage of the daily trading rewards.

LOOKS trading rewards - LooksRare

Here's a nice comparison of Zero Royalty trading between the two platforms by borgley:

LooksRare vs Opensea Royalty volume - borgley

Below are the top collections on LooksRare:

Top collections - LooksRare

No surprises here as the Top 3 volume drivers are all 0% Royalty NFTs like Meetbits, Terraforms and Loot.


As long as the price of LOOKS maintains or keeps going up, wash trading on LooksRare continues to be profitable. And for today, it still is!


Here's a brief breakdown for wash trading on LooksRare to be profitable by El Yogui

LooksRare wash trading profitability - El Yogui

While wash traders receive LOOKS, they are likely to be LOOKS stakers as well to stack on the APR from LOOKS and WETH.

LOOKS fee sharing - Sanbase

The LOOKS' fee sharing contract is growing to a sizable amount now that it has collected $36M worth of WETH.

Rewards to be distributed to LOOKS stakers

For day 10, we are looking at around $16.1M USD worth of WETH to be distributed to LOOKS stakers.


This...leads us to...



The flywheel effect

High APR -> Higher LOOKS price -> Higher trading volume (Mmmmm, the juicy WETH fees!) -> High APR -> Higher LOOKS price


.....and the cycle repeats.


At the moment, we are indeed still seeing a high APR (698.82%) even after more LOOKS were bought and went straight to staking, the dilution wasn't that bad given the increase in LOOKS price, which again continues the flywheel.

MANA for your LOOKS sir?


One important thing to note though..... is that the rewards halving on Feb 10th, where we will see both trading and staking rewards halved.


With that in mind, will there still be enough incentive for wash traders and LOOKS stakers to keep the flywheel going?


Will LOOKS' price get high enough to maintain current APRs?


Will LooksRare get enough legit trading volume (in their vampire attack of OS) to buffer the loss of trading volume when rewards halving kicks in?


The LOOKS community is well aware of this, trying to figure out how best to game theory this event and how things will be after. Regardless, one probably can expect volatility soon.


All is fun and games and everyone is happy with their LOOKS until.... some whale decides to unstake a chunk to take profits.

LOOKS staking contract - Sanbase

The staking contract will be one to keep an eye out for as we get nearer to Feb 10.

Thanks for reading!

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