24 Jan 2022
It’s a good time to be an NFT whale
The NFT market on Ethereum is holding strong despite the broader market downturn over the last week. ETH may be down 25.5%, but the amount of ETH exchanged for NFTs in crown collections has stayed relatively consistent—and there’s a good reason for that.
Over $4bn worth of NFTs have been traded on LookRare since the platform launched just sixteen days ago, and trading volume has continuously surpassed that of OpenSea—the NFT marketplace leader.LooksRare has seen double the trading volume of OpenSea since it launched. However, comparing user and transaction counts over the same period paints a very different picture.The data on the bottom graph indicates that a small number of users are making high-value transactions on LooksRare.Buyers and sellers earn $LOOKS tokens based on their share of the total daily volume traded on the platform. In other words, LooksRare incentivizes trading on its marketplace.Many of these NFTs changed hands at insanely high prices, clearly wash trades made to boost trading volumes and earn $LOOKS rewards, as we reported last week. It will be interesting to see how the platform will perform when trading and staking rewards are cut in half on Feb 10th.As for OpenSea, the collections that account for most of the platform's trading volume are not owned by the average (less risk-tolerant) ETH trader. Hence it may seem like the 'illiquidity’ criticism stems from an investment strategy that does not apply to established NFTs.