Looksrare reportedly generated nft wash

Wash Trades

In regulated markets, wash trading is illegal, but the whole point of cryptocurrencies is to evade annoying regulations like this that prevent market manipulation. Nick Baker’s An NFT Just Sold for $532 Million, But Didn’t Really Sell at All dissects a blatant example:SourceThe process started Thursday at 6:13 p.m. New York time, when someone using an Ethereum address beginning with 0xef76 transferred the CryptoPunk to an address starting with 0x8e39.

About an hour and a half later, 0x8e39 sold the NFT to an address starting with 0x9b5a for 124,457 Ether — equal to $532 million — all of it borrowed from three sources, primarily Compound.

To pay for the trade, the buyer shipped the Ether tokens to the CryptoPunk’s smart contract, which transferred them to the seller — normal stuff, a buyer settling up with a seller.

Private sales are excluded from LOOKS rewards.

  • The team has insistend that wash trading should normally be extremely unprofitable.
  • The founders are anonymous and so are the seed investors. Despite these obvious red flags one must admit that the team has been listening very closely to community feedback.
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    LooksRare: Everything You Need to Know Here’s the answer.
    Great article by @ChrisHeidorn from Tokenized here: https://tokenizedhq.com/looksrare/


    What Is LooksRare?

    LooksRare is a community-first NFT marketplace that launched in January 2022. It aims to become a serious contender to the currently dominant OpenSea and is trying to achieve this by adopting a strong Web3 ethos.


    However,some traders have manipulated the systemby selling NFTs for highly exaggerated prices back and forth between their own controlled wallets—a form of wash trading. Collections like Meebits and Terraforms, which trade without royalties due to the creators, have generated billions of artificially inflated trading volume via LooksRare in recent weeks.

    As of Friday, January 28, crypto analytics firmCryptoSlam saidthat it hadidentified more than $8.3 billion worth of wash tradingon LooksRare.
    WithDune Analyticsreporting $9.5 billion in total trading volume at the time, that would suggest that about 87% of trading on the site was attributed to manipulated sales as of that date.

    Still, that leaves potentially more than $1 billion worth of legitimate trading volume—plus activity from the weekend and Monday—on a brand new NFT marketplace in January.

    Looksrare reportedly generated nft wash-in

    As some of you might remember, it was originally designed to be a currency that could be used to buy actual things! And although it fails to meet all the criteria that would make it a currency, it does have one thing in common with it: its price is underpinned by sheer faith. The difference being that with fiat currencies, that faith is effectively placed in the governments of the nation states who issue them, whereas for bitcoin, the faith is placed in .
    . . the hope that other people will keep having the faith. But even if it weren’t, the number multiplying the “price” is just wrong too:although 18.6m bitcoins have indeed been mined, far fewer can actually be said to be “in circulation” in any meaningful way.

    For a start, it is estimated that about 20 per cent of bitcoins have been lost in various ways, never to be recovered.

    Looksrare reportedly generated nft washer

    The community reward models set LooksRare apart from OpenSea, but with trading rewards at their highest level during the platform’s first 30 days, some users are abusing the system.

    Soon after the January 10 launch, data from CryptoSlam showed that LooksRare users were selling Meebits, Loot, and other royalty-free NFTs back and forth between the same wallets forupwards of $50 million worth of ETHeach way. At the time, the average sale price for a Meebits NFT over the previous week at OpenSea was 4.1 ETH ($13,800 at the time).

    LooksRare’s staggering initial trading numbers looked suspect, and the platform did not institute measures to disincentivize users from buying and selling their own NFTs at exaggerated prices.

    Looksrare reportedly generated nft washed

    In fact, LooksRareretweeted a threadfrom an investor that called such tactics “genius.” LooksRare did not respond toDecrypt’s earlier requests for comment.

    Known wash sales from @LooksRareNFT have been removed from https://t.co/ZZjU7vNTUh’s Top NFT Collectible Sales. The collections impacted are:

    ⚡️meetbits (@larvalabs) ⚡️@lootproject ⚡️terraforms (@mathcastles) ⚡️@CryptoPhunksV2 ⚡️@the_n_project_ pic.twitter.com/dC3UeTcdJZ

    — CryptoSlam! (@cryptoslamio) January 20, 2022

    CryptoSlam—which recentlyraised $9 million from Mark Cubanand others—removed wash trading datafrom its total sales metrics last week, and has implemented a tracker for each NFT collection that shows the total amount of wash trading to date.

    Sales for NFT project Loot reached $192 million in its first week, and MekaVerse wasn’t far behind.

    After the initial boost, many of these projects invariably fall off the map. In the past seven days, Loot has generated just $500k in sales, down 99.7% from its peak.
    And pity the early-stage MekaVerse investor — average sale prices have collapsed from $21k to $2.7k as trading volume has dried up.

    The reason for the decline is straightforward: many of these lower-quality projects live on hype alone. Their artistic merits are questionable at best, and few investors care to buy them on the secondary market.

    Even higher-quality projects aren’t immune.
    Art Blocks, a highly promising Ethereum project, has seen average sale prices tumble from $15,000 in September to $2,600 today, according to NFT site Nonfungible.

    The exchanges were clustered in three distinct groups based on previous findings: (1) accurately-reporting exchanges, (2) exchanges that engaged in wash trading, (3) exchanges with mixed evidence of wash trading. A comparison of the reported to the predicted trading volume, calibrated on the accurately-reporting exchanges, suggests that group 2 exchanges exaggerate their true volume by a factor of 25 to 50, and exchanges of group 3 by a factor of 1.25 to 33.

    Second, Crypto Wash Trading by Lin William Cong, Xi Li, Ke Tang and Yang Yang:We introduce systematic tests exploiting robust statistical and behavioral patterns in trading to detect fake transactions on 29 cryptocurrency exchanges.

    Meanwhile, the marketplace’s previous Polygon record was set in December with $76 million, as NFT trading on the scaling solution has steadily increased in recent months.

    On the Ethereum front, OpenSea had its best single day in months yesterday, January 31, with $233 million worth of NFT trading. It’s one of four single days above the $200 million mark for Ethereum trading in January for the marketplace.

    OpenSea initiallyappeared to be on trackfor an even more sizable finish.

    However, the Dune Analytics dashboard created by Richard Chen, general partner at venture fund 1confirmation, was double-counting transactions sent by newer aggregators likeGenieand Gem.

    ) RTFKT. So today, we’ll examine the other end of the spectrum:

    The 3 NFT projects to avoid.

    Wash Trading Takes to the Stars

    When InvestorPlace’s Brenden Rearick first wrote about NFT exchange LooksRare (CCC:LOOKS-USD), he noted how the new firm was setting the NFT world on fire.

    “The platform is blowing up in popularity just days after its launch… it promises to challenge the dominance of NFT trading platforms like OpenSea”

    It soon became apparent, however, that much of the site’s trading consisted of “wash sales,” the practice of selling pieces to yourself over and over again.

    Why would anyone do that? To earn trading rewards from LooksRare.

    By dispensing $15 million per day to high-volume traders, the exchange unwittingly turned itself into a hub for scams and self-promoters.

    OpenSea | Source: Dune Analytics

    The charts above show that LooksRare’s number of users and daily transactions is only a small fraction (2%-3%) of OpenSea, but the transaction volume is more than three or even four times the OpeaSea time.

    On January 19th as an example, the average trading volume on LooksRare is around $380,000 per user, while on OpenSea it is only $3,000. Likewise, the average volume per transaction on LookRare is around $415,000, while on OpenSea it is only $1,676.

    Essentially, the data shows a very small group of users who made transactions worth hundreds of thousands of dollars.

    This is definitely not a playground for casual NFT buyers.

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