Cryptocurrency experts explained why the new non-fungible token (NFT) platform LooksRare has surpassed the industry leader OpenSea in terms of the number of trading volumes. Analysts said that the reason for this is not the popularity of the new service, but fraudulent transactions. Experts told how the site managed to provide transfers for 8 billion in just over 2 weeks after the launch of the service.
According to the CryptoSlam analytical portal, the volume of trading operations on LooksRare today exceeded $8 billion by January 29, 2022, despite the fact that the marketplace was launched only on January 10. It turned out that traders can send NFTs between their own wallets and thus manipulate the value of tokens, artificially increasing their demand and price.
According to Dune Analytics and CryptoSlam services, more than 88% of all transactions on the LooksRare site were the result of fictitious trading. This means that only 1 out of 10 purchases is real.
According to CryptoSlam specialists, their service uses several methods at once to filter fictitious trading data. The programmers specially wrote and integrated an algorithm to detect such transactions. According to them, platform developers should understand this situation and take appropriate measures.
Analysts said that users need fake auctions to get native tokens of the LOOKS site. So far, 2.87 million virtual coins have been transferred to traders as a reward.
These virtual assets are relied on daily by market participants for trading certain collections of NFTs and making certain trading volumes.
According to statistics, users receive digital currency LOOKS worth about $20 million every day. Moreover, traders have the opportunity to stake and receive passive income. The rewards come in Wrapped Ethereum (wrapped tokens) with an Annual Interest Rate (APY) of 480.77%.
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