LooksRare bills itself as a platform “by NFT people, for NFT people” and uses reward mechanisms and special listing options to lure users from competitors.
LooksRare has yet to match OpenSea’s market capitalization but it has attracted a lot of attention for its emphasis on community and its unique engagement incentives. Here’s how it works.
What is LooksRare?
LooksRare is an Ethereum-based NFT marketplace that allows users to buy or sell NFTs to earn rewards in the form of its native utility tokens LOOKS. The platform has a standard 2% sales fee on all NFT sales, which is slightly lower than OpenSea’s 2.5%.
The LOOKS token is central to the LooksRare ecosystem and can be staked to receive shares of daily trading fees, received in LOOKS and wrapped ether (wETH).
To entice new users during its launch, LooksRare airdropped a supply of 120 million LOOKS to anyone who traded over 3 ETH on OpenSea between June and December of 2021. To claim their LOOKS, users had to list at least one NFT on LooksRare. This resulted in a flood of new listings to the site and a first-day trading volume of $105 million. In addition, nearly $2 million in platform fees were generated and distributed to LOOKS stakers.
The platform was co-founded by the pseudonymous “Zodd” and “Guts” and now has a team of 22 staff across the globe, although there is still some mystery surrounding its operations.
How to buy NFTs on LooksRare
LooksRare offers connection to three Ethereum-compatible wallets including MetaMask, WalletConnect and Coinbase Wallet.
To get started, click the “Connect” button on LooksRare’s homepage to link your preferred crypto wallet.
After your wallet is connected to LooksRare you can use the “Explore” or “Collections” tabs to see what NFTs are available.
When you find an NFT you like, you can click on it to view more details. If the NFT you’re looking at is up for sale, you could make an offer with ETH or wETH.
As a bonus, LooksRare allows users to place a “Collections Offer” if they don’t mind which NFT they get. For example, if you’re interested in getting a Mutant Ape NFT, you could place a “Collections Offer” on the Mutant Ape Yacht Club page. Once you submit your offer, anyone who holds a Mutant Ape NFT could agree to sell their NFT to you for your offer price.
To account for Ethereum gas fees, make sure your wallet has enough funds when making an offer to ensure a successful transaction.
How to sell NFTs on LooksRare
After connecting a wallet, click the “List an NFT” button on the homepage, which will bring you to a screen showing all of the NFTs held in your wallet. You can click “Sell” on any of the NFTs you wish to list on the LooksRare platform and set a fixed price and the number of days you want the listing to be active.
A new feature called “Conditional Listing” was recently added that allows users to list two items; when one item sells, the other listing is canceled and automatically returned to the seller’s wallet.
For those who want to mint an NFT collection directly on LooksRare, the platform offers access to third-party service Manifold Studio. Under the wallet icon, users will find a “Create a Collection” button, which will launch Manifold Studios’ website in another tab.
You can connect your wallet to Manifold Studio and import any images, audio tracks or videos you’d like to create as an NFT before launching it on LooksRare.
As a bonus, LooksRare offers royalties on-chain, meaning that whenever a sale is made through LooksRare, royalties are paid in the same transaction as the sale, giving creators instant payouts.
How to stake LOOKS tokens
Users can also earn passive income with $LOOKS tokens through staking. The process allows users to earn additional LOOKS on top of the trading fee rewards received in wETH.
To begin staking LOOKS, click the “Rewards” tab on LooksRare’s homepage.
Users have the option of “standard staking” their tokens for additional LOOKS and wETH, or they can choose to auto-compound their staked tokens, meaning that rewards received are automatically re-staked into the pool and users do not need to manually stake their tokens to increase their share.
The amount of staking rewards you receive can fluctuate, and depends on multiple factors, including the average daily trading volume and whether you choose to compound your staked tokens. Users also have the option of buying LOOKS tokens on crypto exchanges like Uniswap.
When users unstake their tokens, the amount of compounded rewards and the original staked amount will be added to a user’s wallet.
Reports of wash trading
While LooksRare is often touted for its reward and staking mechanisms, data compiled by NFT tracker CryptoSlam in April suggested that about $18 billion of the trading volume on the platform, or about 95% of the total activity, has been linked to wash trading.
Wash trading is a way for sellers to manipulate the market, often by buying and selling to themselves in order to make it seem as though an asset is in high demand. In LooksRare’s case, the rewards system may incentivize users to manipulate sales in order to gain LOOKS tokens. Wash trading is illegal under U.S. law and remains difficult to track in the crypto space.
Read More: How to Avoid Falling Victim to NFT Scams