Looksrare NFT Marketplace Competes with OpenSea

[TR; DR]
Looksrare is a direct competitor of OpenSea.
Looksrare used vampire attack strategy to gain part of Opensea’s market share.
Lower trading fees, , 100% distribution of trading fees to the community and instant collection of royalties are the advantages that Looksrare has over Opensea.
Gate.io provides initial NFT offering service to NFT creators.


The NFT market that expanded rapidly in 2021 seems to be maturing at a fast pace, with many newcomers. However, for a long time now, OpenSea has been the undisputed leader in the NFT market, something which may change with the launch of Looksrare. The reason is that although OpenSea still dominates in some aspects, Looksrare is also out-competing it in some ways such as trading volume.

What strategy does Looks use to compete with Opensea?
It is not a common thing for a new marketplace to pose serious competition to an existing one a few days after its launch. This is because many users or customers maintain loyalty to the existing service providers. Despite this, Looksrare brought stiff competition to Opensea a few days after its launch. The question is: how did it achieve this?

The answer is simple: Looksrare used the vampire attack, which is a method that blockchain based projects use to lure their users and investors from existing platforms through offering better incentives. Like the case of any other vampire attack, Looksrare aimed to gain liquidity and users of its competitors, of which Opensea is the biggest one.

Looking at Looksrare’s vampire attack strategy, the target was Opensea because it offers rewards for people who have been trading NFTs on Opensea for some time. Specifically, Looksrare’s airdrop was for OpenSea users who had a trading volume of at least 3 Eth within six months. In addition, Looksrare uses a tier system to reward traders with trading volumes of more than 3 ETH


The reason for this incentive scheme is to increase its trading volume. To further lure other NFT traders to its platform, Looksrare gives additional rewards to individuals who achieve trading volumes of 1 000 ETH. In this respect, any traders who trade eligible collections receive Looksrare’s internal token, $Looks. By using this incentive scheme, Looksrare aims to increase its liquidity.

However, these are not the only benefits which attract many users from Opensea and other NFT marketplaces to Looksrare. There are other financial incentives ingrained in the system. However, before we focus on the additional benefits of using Looksrare marketplace, let’s explore what the organisation is.

What is Looksrare?

Probably we can start off by explaining what OpenSea is. Without question, OpenSea had been the leading NFT marketplace before the launch of Looksrare. We need to wait a bit longer to find out if Looksrare will take the first spot in the NFT market.

Essentially, OpenSea is a peer-to-peer marketplace for NFT and other rare digital assets as well as collectibles. People can do various things at OpenSea such as buying and selling different kinds of NFTs. You can also create your NFTs at any time. In addition, people can learn much about new and trending NFT projects on the market.


Having said this, let’s turn our attention to Looksrare which is a new marketplace for Ethereum based NFTs. It refers to itself as a community first NFT marketplace which rewards the users for their participation. Accordingly, it is a direct competitor of OpenSea marketplace as it allows its users to trade the NFTs that exist on Opensea.

Comparison between OpenSea and Looksrare

Since these organisations have positioned themselves as direct competitors in the NFT market, let’s make a simple comparison of the two in regards to their features and conditions.

Trading fees: OpenSea has 2.5% trading fees for all transactions including private sales. On the contrary Looksrare has 2% trading fees on basic sales, but zero fees on private sales. Thus, generally Looksrare’s fee is 20% lower than that of OpenSea, something which attracts more traders on its platform.


Distribution of trading fees: OpenSea keeps 100% of the trading fees, while Looksrare distributes the entire fees to the community. Specifically, Looksrare distributes 100% of the revenue generated through trading fees to the stakers of its token, $Look.

Collection of royalties: On Looksrare, NFT creators and collectors claim their royalties instantly while at OpenSea they wait for a longer period of almost a week to do so.

Why Looksrare seem a close competitor of OpenSea?

Within a week of its launch, Looksrare had over $1 billion dollars in sales, a figure which was more than 40% of OpenSea’s. As a fact, Looksrare launched its NFT marketplace on 10 January 2022, creating a huge hype in the sector. From that time onwards, Looksrare mostly dominates the daily sales record, something which many people had not expected. However, considering its airdrop program and other incentives there is nothing surprising about that.

Gate.io NFT Marketplace

The above discussion seems to paint a picture that there are only two main NFT marketplaces. This is far from the truth since there are many other marketplaces for NFTs. For example Gate.io has also a vibrant NFT marketplace where people can create, buy and sell them at any time. The good thing is that it is completely free for creators to upload their NFTs.

Furthermore, there are many NFTs on the Gate.io marketplace which people can buy. The prices of the NFTs are set in USDT, which is a popular stablecoin. For each NFT, there is a short de_script_ion as well as the number of items, the floor price and the traded volume. This information should indicate the value of the individual NFT.

Initial NFT offering

As the term indicates, people can list their NFTs for the first time on Gate.io. This Initial Coin Offering (INO) caters for various categories of NFTs which include artwork, collectibles, metaverse, music, film and gaming. Before each NFT is listed there is strict vetting to ensure that there is quality in the marketplace.

In addition, if the NFTs are upvoted by the community they stand a chance to get a grant.

OpenPunks: OpenPunks is a community driven NFT creation platform where artists from across the globe can participate at will. The main aim of this platform is to enable anyone interested in NFTs to showcase his/her artistic expertise.
Conclusion

The NFT community is happy about the launch of Looksrare which has emerged as a close competitor of OpenSea.The airdrop of $Look token, lower trading fees and other incentives attract many people to Looksrare. However, there are many other NFTs marketplaces such as Gate.io, where people can mint, buy and sell NFTs.

Author: Mashell. C, Gate.io Researcher
This article represents only the views of the researcher and does not constitute any investment suggestions.
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