Non-fungible tokens (NFTs) are only growing bigger by the day; it’s only natural that marketplace tribalism has broken out among investors. It’s OpenSea versus the world, with dozens of other markets looking to unseat the king of digital art dealing. LooksRare (LOOKS-USD) has stepped up in recent months, and it has shown real promise in giving OpenSea a run for its money. But this week, as the LOOKS crypto takes a dive, there’s some fear sprouting up among LooksRare bulls. Adversaries of the platform continue to sow doubt. Investors are knocking heads on social media this morning over whether LooksRare is all it’s cracked up to be, or a scam.
LooksRare is an NFT platform that launched in mid-January, with this week marking its one-month anniversary. The platform is seeing fast success for a number of reasons. Firstly, it offers far lower fees for sellers than OpenSea does. It also includes trading rewards on top of the sell price, allowing sellers to pocket thousands of dollars for high-profile NFT sales. This rewards system is incentivizing owners of superstar NFT project like the Bored Ape Yacht Club to take their tokens to LooksRare over OpenSea.
Perhaps most appealing about the platform, though, is not its NFT market, but rather its DeFi staking platform. The LOOKS crypto is the vehicle through which investors can generate huge passive income yields. The platform promises an annual percentage rate (APR) of nearly 240% for those who stake LOOKS on the platform. In return for staking, users generate wrapped Ethereum (ETH-USD), or wETH, which mirrors the price of ETH.
LOOKS Crypto Prices Sink, Prompting Clash Between Bulls and Bears
This week, LooksRare is showing its first bit of serious volatility since launching. Some would consider this normal growing pains for a wildly and immediately successful protocol. However, others are throwing cold water on LOOKS crypto holders, claiming that the project is too good to be true. Indeed, LOOKS prices are dropping by over 20% today. After reaching an all-time high of nearly $7 in late January, the token is already trading below $1.70 today.
There are plenty of LOOKS bulls who say they are hunkering down in anticipation of a turnaround. Since LOOKS still offers some of the highest APRs among DeFi protocols, there is a belief that it will regain and ultimately capture new all-time highs. Others are reminding investors that they need to also interact with the protocol and its flagship service — the NFT marketplace — in order to help foster growth.
Those more bearish on LOOKS are sharing data that they believe outs LooksRare as a scheme. One user notes a transaction where developers sold off tens of thousands of wETH tokens. Other bears are going so far as to call the staking function of the service a Ponzi scheme, where developers keep rolling out more tokens in secret to reward stakers. Of course, this is the largest point of contention between bears and bulls; bullish investors dismiss the claims as fear, uncertainty and doubt (FUD).
All in all, the division between LOOKS crypto investors isn’t keeping new money from flowing into the platform. The token is trading down, yes, but trading volume is rising by 23% to start the day. It seems that there are plenty of investors buying the dip.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
