When LooksRare launched less than a week ago people were pretty quick to state that it could take down OpenSea as the go-to Ethereum NFT marketplace. After all, LooksRare offered their $LOOKS token allowing people to stake and provide liquidity to the platform, lower platform fees, returns all of the platform fees to users via additional $LOOKS tokens, among other things. While this sounds really really great the ways that the $LOOKS tokens were distributed for trading allowed for a mass amount of wash sales.
Wash sales are not true sales. What occurs is the same person is "selling" the NFT between two wallets they have. If the individual does it with an NFT that does not have a royalty connected to it (meaning that the original creator does get a cut of the sale price) the only fees that the person would have to pay would be the 2% fee. During the first few days of token distributions based on the sale of NFT people gamed the system with these trades between their own wallets.
Due to the structure of the token distributions the fees charged did not offset what could be earned by doing this. Now, this is not going to remain profitable for long but what it has allowed is certain individuals to acquire huge amounts of $LOOKS tokens and not in a fairway. This is why the data for the first few days of NFT sales on the site have been called into question on if they accurately represent the true movement of assets between individuals.
I have found it really interesting that people do talk about this going on but everyone has really given these people a pass. While I understand they did something that was technically against the rules what they did wasn't the right thing to do either and diminished the view of the platform as a whole. Now the platform has to be careful to not have other issues as if they do people can pile on and say there have been issues since the beginning. It is a slippery slope and something that I am not sure has a true answer.
The issue with the token distribution overall is bad enough that on Harvest Finance days after the farm was launched the APY for the LOOKS-ETH farm is still over 7,300% APY. Further broken down LOOKS is responsible for 7,300% while iFARM is responsible for 19% APY. It will be interesting to see if the token is able to penetrate enough of the market to not end up controlled in the hands of a few but with yields like this anyone with a bag of ETH can easily just invest in this and end up with a large amount of LOOKS via yield farming.
Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
Robinhood
If you do not already have a Robinhood account if you sign up here and link your bank account we both earn FREE stock! You also will be put on the waitlist for crypto wallets as well! Don't forget Robinhood crypto trading is commission-free! 🤝
Fold App
Offers daily wheel spins to win free sats daily! If you sign up for Fold with my link here you will get 5,000 sats for free! Currently, you can get Fold's Premium Debit Card Fold+ for free until February 1st. If you sign up for that as well we each receive a free $25 credit!
Unstoppable Domains
Sign up using my link here and get a free $10 credit towards your first $40+ purchase!
Coinbase
Sign up for Coinbase and earn $10 of free Bitcoin when you buy or sell $100 in crypto with my referral here!
SMiles
If you are like me and walk to work every day this app rewards your walking with Sats! So far I have earned over 2,200 sats in just a few weeks walking to work! Here is my link!
