Tuesday, May 24, 2022
HomeActivityMore than 90% of Activity on LooksRare NFT platform May be "Wash...

More than 90% of Activity on LooksRare NFT platform May be “Wash Sales”

LooksRare platform rose up to the top in NFT marketplace transaction volume this year. It seems that most of the activity on this platform is due to wash transactions. According to reports, most transactions occur because people sell NFTs to their own wallets in order to make more coins.

In January 2008, two anonymous co-founders, Zodd and Guts, created the platform to challenge OpenSea . as the NFT market leader. NFT enthusiasts were attracted to the site by its new features. Nearly all of these ventures were centered around the LOOKS token.

The picture shows LooksRare logo
95% of LooksRare transactions are due to users selling NFTs to themselves to earn LOOKS token as a reward. Credit: LooksRare

Bulk of LooksRare Transactions Are Wash Sales

LooksRare offers token rewards for users who buy and sell NFTs on the site. This information was then used to their advantage by users. NFTs were traded back and forth between their Ethereum wallets using artificially inflated prices. They’ll be able to earn more LOOKS rewards by doing this than they would spend on LooksRare’s 2% marketplace fees and the Ethereum network’s own gas costs.

According to NFT analytics firm CryptoSlam, these activities generated $18 billion in the platform’s trading volume. This means around 95 percent of all activity on the platform might be wash sales.

LooksRare representatives have not yet commented on this information. Since there are no titles or pseudonyms on their website, it is impossible to reach them.

LooksRare allegedly covered up the cooling demand for NFT products. Dune Analytics data shows that OpenSea has seen its total sales fall every month since January. In addition, DappRadar data states the site’s sales volume went down by 67% in the last 30 days. The number of traders has decreased by 23%.

With the decrease of activity in the NFT market recently and LooksRare’s trading rewards set to drop significantly, we’ll see if it will remain profitable for wash traders to prey on the platform’s rewards model.

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All investment/financial opinions expressed by NFTevening.com are not recommendations.

This article is educational material.

As always, make your own research prior to making any kind of investment.

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Henry Hicks
Henry Hickshttps://nonfungibletalk.com
NFT and Crypto Enthusiast. Loves Travelling and Exploring the Metaverse!


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