Researchers report that about 95% of all transactions on the site are scams. 

NFT Marketplace LooksRare Accused of Mass Scam

Analytical platform CryptoSlam stated that only 5% of transactions on LooksRare are not related to fraudulent activities. Bloomberg reports this. 

The marketplace launched in January 2022, positioning itself as an alternative to OpenSea. Key innovations include rewarding transactions in LOOKS tokens and distributing a portion of the site’s fee income to its holders. Since its launch, the total trading volume on the site has exceeded $22.2 billion with 106.000 transactions. Thus, the total volume of scam trades on LooksRare is over $18 billion. 

Fraudulent transactions are NFT sales between the wallets of a single user or group of individuals. Such transactions make no economic sense and are used on platforms like OpenSea to artificially inflate the value of tokens. But the main point of such “trades” on LooksRare is to get LOOKS tokens credited for each transaction. 

Besides, the trading volume on LooksRare hides the general slump of hype around NFTs. According to Dune Analytics, OpenSea has seen a decline in trading volume since January. So, during March, the volume on the largest NFT marketplace decreased by 67%, and the number of active traders decreased by 23%. In February this year, Chainalysis analysts already reported about large volumes of fictitious trading of non-fungible tokens and increased money laundering on the NFT market.

Author: Mark Wallerstein
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