Emerging LooksRare and Opensea NFT Global Marketplace
You’ve probably utilized OpenSea if you’ve purchased an NFT just on Ethereum blockchain. It already has sold over $4 billion in NFTs in the last month, making it the largest NFT global market by volume.
The industry is primed for competition as NFTs Bridge the chasm into the mainstream. LooksRare, a neighborhood NFT marketplace, is one example. The LooksRare Marketplace has processed more transaction dollars than OpenSea nearly every day since its start on January 10th.
Let us just take a good look at how markets work before we get into LooksRare’s plan.
A typical community brings supply and demand together and facilitates transactions. It entails building a platform where NFT buyers and sellers can easily transact in the case of NFT marketplaces.
The ‘chicken and egg problem,’ which requires one side of the economy to attract the other, is a major difficulty for markets. Vendors will quit transacting on other platforms if there aren’t enough buyers. Similarly, a lack of availability will drive purchasers with limited options to other platforms.
Storefronts that successfully balance market dynamics can create tremendous interconnections that keep customers returning and keep adversaries out.
The LooksRare NFT Marketplace Strategy
So, how did LooksRare overcome its own chicken and egg problem so to pose a credible threat to OpenSea?
It’s still quite early to say, but here are a few of strategic decisions that have given LooksRare an edge:
1 Transparency of supply on the blockchain
Unlike on eBay, where sellers upload product information, NFT data is recorded on the blockchain for anyone to use. As a result, LooksRare had access to the same data as OpenSea and was able to match their stockpile on day one. LooksRare has been able to solve the labor supply of the chicken and egg dilemma in order to retain customers.
However, there is a catch: while the NFTs are demonstrated, they do not have price tags. In terms of selling their NFTs on the budding platform, sellers must add prices to them.
2. The $LOOKS token
The $LOOKS token is LooksRare’s primary tool for incentivizing buyers and sellers. This is how it works:
Step 1: The $LOOKS token will be launched. Give the founders 10% of the supply. Give the public 75% of your time. Divide the residual 15% among the Government coffers and other stockholders.
Step 2: Parachute $LOOKS at OpenSea’s advanced users depending on the amount of money spent on transactions (in this case, 3 ETH or more). Suddenly, the most active OpenSea users stand to benefit from LooksRare’s success.
Step 3: Allow users to purchase and invest $LOOKS. All service charges should be distributed as token stakes.
Step 4: Reward people with $LOOKS when they trade certain collections (those with over 1000 ETH in trading volume).
3. Platform user-friendliness
Lower transaction fees: OpenSea costs a 2.5 percent service charge, the entirety of which goes to OpenSea. LooksRare, on the other hand, charges only 2%, with all of the money going to $LOOKS stakes. It’s similar to purchasing a product at a lower cost in a retailer where you own a stake.
Quicker royalty payments: The royalty payments were made by OpenSea to merchants who took several days to function. They are collected and processed on LooksRare.
Collection Offers: LooksRare enables customers to make a ‘Collection Offer,’ which allows them to make the same offer on all items in a collection. If one person accepts their offer, all other offers on the collection’s items are removed. This is useful for people who only want to buy one piece from a collection and don’t mind which one they get. It also generates more bids for suppliers who want to sell.
Will the LooksRare NFT Market Place Win?
It’s too soon to tell.
Even though the trading volume on LooksRare NFT Marketplace has already surpassed that of OpenSea, a substantial chunk of this may be due to wiping down, in which users make repeated transaction records amongst themselves in order to gain rewards.
Although LooksRare’s total trading volume is 3X that of OpenSea, OpenSea still has 60X more transactions and 17X more users, as evidenced by the figures above. It implies that the majority of LooksRare’s transactions are carried out by crypto whales (folks with large amounts of crypto in their wallets). Other moats that OpenSea has yet to breach include a robust API and direct integration with Twitter’s new NFT profile picture feature.
There will also be competition in the near future, with Coinbase launching its own NFT marketplace. Coinbase’s current platform has millions of users and a track record of exceeding expectations.
Time will tell whether the NFT market becomes a winner-take-all environment or whether multiple players can coexist in different niches. In any case, the competition will be entertaining to watch.
Want to dabble in the LooksRare NFT Marketplace ecosystem?
Here are a few ways you can participate:
LooksRare’s global market is a great place to buy, sell, and trade NFTs.
1. On Uniswap, you can purchase $LOOKS.
2. Stake $LOOKS and receive Wrapped ETH and more $LOOKS as bonuses.
3. Earn rewards by providing liquidity for $LOOKS on Uniswap.