Even though there was a lot of excitement regarding the LooksRare NFT marketplace, some of that momentum evaporated. Moreover, the $LOOKS token has lost over 72% of its value this past month. Reports over potential wash trading, coinciding with the recent reward drop, seemingly put the project in an awkward position.
LooksRare Hype Is Dissipating
It is understandable why so many people showed an interest in LooksRare. Finding an NFT marketplace that might be able to compete with OpenSea isn’t easy these days. Several projects have come and tried, yet none holds a candle to the leading marketplace for non-fungible tokens. Moreover, the newcomer introduced a $LOOKS token airdrop for users who had been rather active on OpenSea, sparking some social momentum.
Unfortunately, token airdrops remain a sure way to diminish asset value. LooksRare is no exception, as the project’s supply of over 246 million tokens has created a price decrease. A rather steep one, too, as the value of $7 per $LOOKS resulted in an all-time low of $1.49 just yesterday. People continue to dump these tokens very quickly and show no sign of slowing down.
Where Is The $LOOKS Floor?
Judging by the recent $LOOKS market momentum, a price reversal seems unlikely. Although all crypto markets are bearish once again, this token’s downfall has been going on for a while. Ever since spiking to $7.1 in late January, its value has struggled to remain stable for more than two days in a row. Volatility can yield significant profits, although shorting $LOOKS has been the more profitable approach lately.
Moreover, the 72.6% decline in the past 30 days shows there is no real long-term potential for this currency at the moment. Even though it has a strong trading volume, that doesn’t matter much if more liquidity is being sold than bought. A new all-time low looms around the corner, and it is a matter of time until $LOOKS falls below $1, if this trend continues.
Rewards Decrease And Washtrading Concerns
Two developments affect the current appeal of LooksRare and the $LOOKS token. First, a substantial decrease in $LOOKS emittance per block affects the earnings of NFT traders on the platform and impacts the staking rewards. One may argue a lower emission is beneficial, yet that isn’t enough to prevent the price from dropping even lower these days.
Second, there are concerns over wash trading. More specifically, users seling NFTs to themselves to collect rewards from the platform. That approach only works $LOOKS rewards have a high enough financial value to spend gas fees, which may not be the case for much longer. The reduced rewards might end any nefarious behavior – assuming any took place, to begin with – but it remains a concern for the platform and its users.
User And TX Statistics Seem Promising
The downfall of the $LOOKS token doesn’t mean people stopped using LooksRare altogether. In fact, the statistics by DAppRadar confirm the platform notes solid growth for users, transactions and volume. Over 30,000 users and nearly 80,000 transactions are prominent statistics on the platform, although they may be a sign of wash trading.
However, the volume of $2.89 billion in monthly volume is interesting. It makes LooskRare one of the most successful DApps on the market today, even though potential wash trading can inflate the volume rather rapidly. The user count is dropping off since the reward decreased, though, as are the volume and transactions. These statistics may look very different in a few weeks and will probably yield much lower numbers.
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