LooksRare Dangles Carrot for OpenSea NFT Collectors

LooksRare launched with an airdrop today. The NFT marketplace is aiming to take on OpenSea.

LooksRare Targets OpenSea Users

A new NFT marketplace is hoping to topple OpenSea’s monopoly over the space.

LooksRare launched today with an airdrop for OpenSea users. The platform’s LOOKS token was distributed to anyone who traded at least 3 ETH (worth around $9,100 at press time) on OpenSea between 16 Jun. and 16 Dec., 2021. Per its tokenomics page, the airdrop accounts for 12% of the total supply of 1 billion.

Dune Analytics data shows that 185,223 Ethereum addresses are eligible to claim between 125 to 10,000 LOOKS tokens based on their trading volume. Soon after it opened for trading on Uniswap, the LOOKS token peaked at $4.71 before cooling to around $1.75.

The airdrop is crypto’s latest “vampire attack,” a strategic move in which a project aims to attract users from a leading competitor. Projects usually carry out vampire attacks by offering incentives such as tokens in hopes of attracting liquidity.

LooksRare is not the first project that has attempted a vampire attack on OpenSea via an airdrop. In October, another NFT marketplace called Infinity launched an airdrop for OpenSea traders that met certain eligibility conditions. However, it failed to gain significant traction following its launch.

LooksRare says it will reward users on an ongoing basis. Besides the initial airdrop, users will be able to earn LOOKS token rewards for trading verified collections. Furthermore, each transaction will carry a 2% trading fee that will be paid to users who stake LOOKS tokens. By contrast, OpenSea takes a 2.5% cut from every transaction rather than paying anything back to the end user.

Although several marketplaces like SuperRare, Foundation, and Zora have benefited from growing interest in NFTs, OpenSea was the big winner of the 2021 boom. It clocked about $14 billion in trading volume over the course of the year. However, despite its success, OpenSea has also come under fire from the NFT community for various reasons. In September, it suffered a major PR blunder when its then head of product was caught using insider information to profit on NFTs listed on the marketplace. Following that, in early December, it faced a fierce backlash when its new CFO Brian Roberts hinted that the firm was considering going public. Many NFT community members had hoped that OpenSea would decentralize the project by launching a token with an airdrop for early users, but the IPO plans suggested otherwise.

As OpenSea currently has no token, it can not offer incentives to users like decentralized projects can. That leaves space for competitors like LooksRare to thrive. Whether it will succeed remains to be seen.

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies.