'NFT' is not a new word on the internet today. It is not news that many are profiting in millions of dollars from this fast-growing industry, and individuals, brands, and businesses alike are jumping in on it.
Twitter's first tweet, which began the popular social media site, was sold as a $2.9 million NFT by Jack Dorsey, Twitter's creator. Beeple, a digital artist, sold his NFT collage for $69 million in March 2021, making him the third most valuable living artist, following Jeff Koons and David Hockney. With these success stories coming from the space, it is easy to see why many seek to mint, buy and sell NFTs.
When getting started, the first place to look at NFT marketplaces, as you can only do NFT transactions on these platforms. While dedicated marketplaces like OpenSea (the world's primary and largest NFT marketplace with over $20 billion in sales since its launch) and Rarible have long dominated the space, some of the world's largest cryptocurrency exchanges have recently entered the fray.
Binance launched its NFT marketplace in June 2021, while Coinbase revealed plans for one in October 2021, with over 1.4 million people signing up for the waitlist in the first 48 hours. However, the biggest competitor for OpenSea looking to dominate the NFT marketplace is LooksRare.
Opensea Vs LooksRare
LooksRare made quite a stir on NFT Twitter when they launched a "vampire-attack"- as is now called on OpenSea- on users by offering airdrops with their platform token, $LOOKS, to OpenSea users based on how they spend on the platform.
This open conversion strategy was very successful, and NFT Twitter went loud with excitement and bristling, as overnight, an entirely separate platform paid NFT collectors just for using OpenSea. It significantly increased the popularity of LooksRare and its token, $LOOKS. Although the Ethereum-based NFT marketplace, OpenSea, has been active for much longer and is more popular than LooksRare, LooksRare's successful introduction could signal a shift.
Looksrare, a developing marketplace, was launched in early 2022, whereas OpenSea, a unicorn, was launched in December 2017. But when LooksRare exploded into the scene, the platform generated approximately $400 million in sales in a single day, surpassing OpenSea's daily volume.
This momentum could indicate that LooksRare will be able to overtake OpenSea in terms of market share. However, good investors know to look for solid fundamentals when forecasting or predicting and carefully analyze the market before making decisions. While this is a good strategy, the crypto industry is a tricky space, and it is worthy of note that several unperceived factors may affect market trends at any time.
LooksRare Pros and Cons
Pros
- Compared to other markets, the platform has the lowest fees in the business. They impose a transaction cost of 2%, while their closest competitor charges a fee of 2.5 percent.
- LooksRare allows you to search for and view any non-fungible token on the Ethereum blockchain due to its wide range. You may also sort through your assets of interest using their category system.
- When you perform transactions on our platform, you won't have to worry about your cryptocurrencies or NFTs being compromised as the platform is entirely decentralized.
- The user interface is straightforward, even for those new to the NFT realm.
Cons
- There is presently no means or mechanism for creators to mint their own NFTs on the platform.
- You cannot buy assets with credit cards, fiat currency (like GBP, USD, AUD), or other cryptocurrencies at the moment.
Opensea Pros and Cons
Pros
- You do not need to establish an account with OpenSea. All you have to do now is link your cryptocurrency wallet. When selling or buying NFTs, you don't have to share your personal information, which means anonymity. On the other hand, the platform collects personal information and blockchain addresses to improve its service and does not make them public.
- OpenSea accepts over 200 payment methods, with Ether being the most popular. Stablecoins, significant currencies, and coins like BTC are among the others.
- OpenSea now displays approximately 20 million user-owned items, whereas most NFT websites specialize in a particular niche. Users can list their NFTs using a variety of methods. Right now, the most popular category is artwork. These can be auctioned or sold at a set price.
- The platform has a sizable and active user base. OpenSea surpassed one million users in January, according to reports. It now has over $13.3 billion in market capitalization.
Cons
- Hackers exploited a flaw in the OpenSea NFT marketplace to steal rare NFTs for a fraction of their market value and resell them for over $1 million. This raised brows about security as many suggested that OpenSea does not cater enough for security.
- OpenSea does not presently support payments in traditional currencies such as USD or AUD, but the platform has promised to address this. To this end, Dharma Labs, a forerunner in DeFi which aims to provide a seamless user interface for swapping or lending tokens, has been acquired by OpenSea. Allowing users to deposit fiat with their debit card and subsequently swap tokens on Uniswap v3 could help overcome the gaps in crypto and fiat.
- A high-ranking firm employee quit in September 2021. According to OpenSea's statements, the person in question bidded on NFTs that he understood would be displayed on the site- insider trading that showed management exploitation. The team has pledged to take action if team members use sensitive information to make NFT purchases.
Is LooksRare Cheaper Than Opensea?
Implementing a more distributed system, LooksRare allocates ETH from its 2% transaction fees to customers who have purchased its $LOOKS tokens. Still, more importantly, users with a significant history of trading on OpenSea are given free $LOOKS tokens, as mentioned earlier.
A spokesperson from its pseudonymous management commented that the platform was built to provide an NFT marketplace run by NFT people and for NFT people. This spokesperson added that: "$LOOKS stakers earn platform fees, whereas the platform fees from most other markets know about exploring a central entity. When you compare the models, which approach is more vampiric?"
This makes LooksRare very desirable and coupled with its low transaction fees, and this culminates into a platform worth reckoning by OpenSea. The platform fees by both marketplaces are evaluated as below:
OpenSea
LooksRare
2.5%
2%
While OpenSea allows for minting and charges fees, users cannot mint on LooksRare. However, they get extra $LOOKS token incentives, and the 2% fees listed by the platform are completely distributed to $LOOKS token stakers as rewards.
What Blockchains Do Opensea Support?
LooksRare has various drawbacks, such as lack of minting and limited blockchain use cases, but meanwhile, OpenSea is dominating the game. OpenSea's growth can be credited to organic and sustained growth, whereas LooksRare relies on an incentive strategy to attract NFT users. It appears to be working for the time being, but only if the platform can keep up the momentum and adopt a good strategy will its likely potential enable it to become the number one NFT marketplace.
And so, LooksRare may take several months or even years to catch up to the offerings and advantages of OpenSea. One of which is that OpenSea currently offers cross-blockchain support across Klayton, Polygon, and Ethereum blockchains.
What Blockchains Do LooksRare Support?
Currently, LooksRare is built on OpenSea and doesn't offer any other blockchain support, being a new marketplace but may take considerable strides in leaps and bounds to this effect.
Conclusion
Many people insist that LooksRare's trading volume is only the result of incentivization and wash trading– having many accounts inflate prices by buying their own NFTs. However, more people are migrating to the platform and utilizing these incentives. While OpenSea has an active community, investors always look to make the most out of their investment. At the moment, LooksRare seems to offer greater rewards. Still, the market analysis must be thoroughly conducted as many have been greatly rewarded from OpenSea in the past and are unsure of the future of the new platform.
