LooksRare Generated $8 Billion In Ethereum NFT Wash Trading: Report

LooksRare generated $8 billion in Ethereum NFT wash tradign as users attempt to game the trading rewards model according to analytics company CryptoSlam so let’s read more today in our Ethereum news.

CryptoSlam said the vast majority of the hot NFT marketplace sales are illegitimate trades that were made to manipulate the token rewards model. The NFT marketplace LookRare generated $8 billion in ETH NFT wash trading which made up the vast majority of the sales volumes to date. Looksrare came out of nowhere to become the biggest rival yet to leading FNT marketplace OpenSea but there’s a huge risk on the trading figures coming out of the platform. It’s riffed with wash trading as users buy and sell NFTs between wallets they control in an effort to manipulate the daily trading rewards. NFT analytics company CryptoSalm reproted that it has identified more than $8.3 billion worth of was trading from LooksRare whcih made the vast majority of the trading volume on the marketplace.

$LOOKS Day 17 trading rewards have been distributed.

Active LOOKS stakers earn WETH every block (every 15 secs or so)

✨ALL COLLECTIONS NOW EARN TRADING REWARDS!✨

💰 4,261 $WETH ($10.2M USD)
💰 2,866,500 LOOKS ($12.6M USD)

👀💎https://t.co/xLrd3PKRKX pic.twitter.com/r9KOVO5kVB

— LooksRare 👀💎 – NFT Marketplace (@LooksRareNFT) January 28, 2022

Most of the wash trading came from royalty-free collections which means that the sellers don’t have to pay the creators a secondary sale fee. Larva Labs’ Meebits saw the most wash trading at $4.4 billion with Terraforms at $2.9 billion, CryptoPhunks at $251 million, and Loot at  $705 million. According to the data from Dune analytics, LooksRare amassed more than $9.5 billion in total ETH tradign volume and if the figures are accurate, about 87% of LooksRare tradign volume matches the criteria of wash trading.

LooksRare provides Wrapped Ethereum rewards for users that stake their LOOKS tokens in the platform and provides further incentives to amass and to hold a huge number of them. The community reward models set LooksRare apart from OpenSea but the tradign rewards at a higher level mean that some users were abusing the system in the first 30 days of the platform. Soon after the launch, data from cryptoSlam showed that LooksRare users were selling Meebits, Loot, and other NFTs back and forth and at the time, the average sale price for Meebits NFT at OpenSea was 4.1 ETH.

LooksRare generated a lot of buzzes when launched and delivered $20 million or more worth of total daily rewards to the users since its launch. It came after OpenSea enjoyed a record sales month with NFT trading volume now over $4.3 billion topping the previous record of $3.4 billion from 2021. With LooksRare trading rewards set to drop at the 30-day mark after the launch, we might see if it remains profitable for wash traders to use the game rewards mode and whether the ballooning trading numbers will crash in turn.