LooksRare Trading Volume Surpasses 5 Billion: Does Trading Mining Really Pay Off?

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NFT trading platform LooksRare recently launched a vampire attack on OpenSea through a LOOKS token airdrop. With its profit-sharing and trading mining mechanisms, LooksRare has attracted speculative users engaging in massive transactions. On January 12th, its trading volume even reached an astonishing $5 billion. But is trading mining truly profitable?

LooksRare Emerges as a Strong Competitor

LooksRare is an Ethereum-based NFT marketplace aiming to replace OpenSea as a more user-friendly platform.

"We’re tired of their arrogant attitude toward creators—prioritizing commercial value over community. They seek IPOs instead of considering how to benefit the ecosystem," the LooksRare team stated.

LooksRare’s first move was an airdrop for eligible users. Here are the criteria:

  1. OpenSea trading volume exceeding 3 ETH between June 16 and December 16, 2021.
  2. Users must list an NFT for sale on LooksRare.

Beyond the free airdrop, LOOKS tokens offer several functions:

  1. Stake LOOKS to earn rewards (paid in LOOKS).
  2. Provide LOOKS-ETH Uni V2 LP tokens for liquidity rewards (paid in LOOKS).
  3. LooksRare directs 100% of platform fees to LOOKS stakers (rewards in WETH).
  4. Purchasing eligible NFTs earns LOOKS rewards (collections with over 1,000 ETH in trading volume).

Eligible NFT collections display a trading reward badge.

LooksRare Outperforms OpenSea in Trading Volume

Despite being a nascent platform, LooksRare’s trading volume recently surpassed OpenSea—largely due to its trading mining rewards.

According to Dune Analytics:

However, LooksRare’s daily users and transactions lag far behind:

This anomaly suggests potential wash trading—users artificially inflating volume to farm rewards.

👉 Discover how trading mining strategies impact NFT markets

Is Wash Trading Profitable?

Let’s calculate based on LooksRare’s whitepaper and trading data (assuming $10M daily volume per user):

While profitable at scale, rising platform volume demands higher individual contributions. Post-30-day reward reductions will likely diminish returns.

Extreme Funding Rates

FTX’s LOOKS perpetual contracts show staggering negative funding rates (~-0.1%), suggesting heavy short interest. This could reflect:

👉 Learn how funding rates signal market sentiment

FAQs

1. Is LooksRare’s trading volume organic?
No—data indicates significant wash trading to farm rewards.

2. Can trading mining remain profitable long-term?
Unlikely, as rewards decline after 30 days and competition increases.

3. Why is LOOKS’ funding rate so negative?
Possible hedging by traders or speculative shorting against staking yields.

Risk Disclaimer

Cryptocurrency investments carry high risk. Prices are volatile, and you may lose your entire capital. Always assess risks carefully.

Note: This article does not constitute financial advice. Trade cautiously.


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