Is LOOKS An Asymmetric Bet If NFTs Outperform Crypto?

    • LooksRare’s takes a majority market share among NFT marketplaces.
    • LOOKS still trading 80% below the all-time high made during its January launch.

    The non-fungible token (NFT) marketplace has always been an outlier. Last year, when crypto prices were falling between May and July, NFTs were booming. This year, as the market moves into bearish territory, NFTs seem to be the only solace for crypto investors.

    In the past few months, there have been tremendous developments in the NFT market. OpenSea integrated a second blockchain – Solana, Kevin Rose’s Moonbirds made a big minting splash, and Yuga Labs unveiled its Otherside metaverse.

    Yet, one big name in the NFT marketplace was missing in action – LooksRare, the recently launched NFT marketplace. It seems the marketplace’s big moves have been missed by the industry because as everything else trends downwards, Looks is moving up.

    Taking The Lead

    On May 10, LooksRare took a majority 51% market share by trading volume for the first time since mid-April. This was surprising, considering at the beginning of May, LooksRare’s market share was less than 12%.

    Source: Dune Analytics

    It should be noted that this is according to total transaction volume in USD and not transacting users. The latter metric has OpenSea up by a factor of 32 to 1. The reason for this was not OpenSea faltering, but a massive burst in trading volume on LooksRare. Just how much of a burst? Well, almost 5x the trading volume on Opensea on a 24-hour basis.

    Data last updated on May 8 | Source: Dune Analytics

    While there is no direct causation to the spike in trading volume on Looksrare, it could be due to interest in niche projects. Otherside’s Otherdeeds is seeing tremendous interest with a trading volume of over 1,500 ETH. Also, there is a renewed interest in established projects like Azuki, Bored Ape Yacht Club, and Mutant Ape Yacht Club.

    No Effect On Fundamentals

    A higher amount of attention to a DApp means nothing if it doesn’t have a token. Fortunately, LooksRare does. But unfortunately, its token is unaffected.

    The price of the native LOOKS token is still down at about $1, down 80% in the last few months.

    Source: LOOKSUSDT via Trading View

    The fundamentals of the project also show no change. Token Terminal shows LooksRare’s daily revenue stable at $2 million, down 87% since January.

    LooksRare is momentarily taking a lead in the NFT marketplace. But with the price of its token and revenue of the project underperforming ETH massively, is LOOKS really a good bet to take into the bear market?

    Aakash Athawasya
    Aakash is a market analyst at Vauld. He looks at on-chain data of Bitcoin, ETH, and the macroeconomic effect of crypto on the equity and commodity markets.

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