LooksRare Has Reportedly Generated $8B in Ethereum NFT Wash Trading
LooksRare has generated more than $8.3 billion worth of wash trades, representing the vast majority of the platform's sales volume to date.
LooksRare, a new Ethereum-based NFT marketplace, is generating a stir this month due its token launch and airdrop requirements, which have sparked wash trading on the platform. Since its launch, LooksRare has generated over $8 billion in trading volume, propelling it to first position on the DappRadar NFT Marketplace rating.
In the digital collectibles arena, wash trading occurs when the owners of NFTs sell to themselves in order to drive a price increase, or in this case, collect $LOOKS tokens.
This wash trading is stimulating mind blowing trading volume records and driving the marketplace up the ranks. As a result, more eyeballs are on the market, and airdrop opportunities and a vicious circle can form. Although the seven-day trading volume is nearly half that of Opensea, the number of traders is substantially lower, with only 5,000 compared to Opensea's 260,000. This indicates that a tiny group of dealers controls the platform, buying and selling to benefit themselves.
Because trading on LooksRare is now profitable, organic volume will continue to migrate from Opensea. Consequently, the amount of wash trading will presumably reduce overtime, as individuals who want to use it will be sharing benefits with those who aren't just there to farm tokens.
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