Tokenomics 101: LooksRare $LOOKS
Beyond Bootstrapping: Assessing the Tokenomics of LooksRare and their Viability in the Long Run
Introduction
LooksRare is a community-centric NFT marketplace that distinguishes itself from its main rival, OpenSea, by distributing 100% of the trading fees generated to its token stakers and incentivising collectors and traders with its LOOKS token rewards.
Upon its debut in early 2022, LooksRare experienced a surge in daily trading volume, facilitating a total volume of NFT trades of over $600 million on January 31st, 2021, more than double that of OpenSea as the graphic visualizes:
However, a significant portion of these figures was due to wash trading. If you need a refresher or are unfamiliar with the concept of wash trading, you can find a valuable resource for guidance here.
Nonetheless, excluding the volume resulting from wash trades, LooksRare managed to attain roughly 10% of OpenSea's trading volume within the first few weeks of launch, which is a significant achievement (Source). In this article, LooksRare's success factors will be examined and the future of LooksRare and its LOOKS token will be evaluated. The focus will be on their challenge to transition from incentive-fueled platform usage to a more sustainable usage through a competitive advantage for example.
Tokenomics
LooksRare incorporates LOOKS as its inherent and fungible utility token. LOOKS is specifically designed to provide the utility functions described by LooksRare and to facilitate their transfer (comp. Source).