Non-fungible tokens or NFTs are unique, unlike Bitcoin and fiat currency, which are interchangeable. This uniqueness is part of the reason that makes them so popular, as, for the first time, it allows for provable digital ownership.
While it was in 2021 that NFTs went mainstream, they have been around before then. Back in 2017, CryptoKitties was one of the first NFTs to gain traction leading to the Ethereum congestion crisis. CryptoPunks, which have been sold for millions of dollars, have also been around since late 2017 when they were given for free.
As everyone boards the NFT train now, special NFT marketplaces have been entering the market with lucrative opportunities for users. Rarible and LooksRare are two such NFT marketplaces. Let’s check out what each one has to offer you and how they compare with each other.
Right when NFT mania started to trend up in 2020, founders Alex Salnikov and Alexei Falin launched the NFT marketplace Rarible. Before Rarible, both Salnikov and Falin helped launch other companies as well.
As NFTs gained mainstream adoption in 2021, Rarible raised $1.75 million in seed funding and then a few months later, in June, announced a $14.2 million Series A funding round from investment firms CoinFund, Venrock Capital, and 01 Advisors.
The startup said at the time that it will use the fresh capital to make the NFT space more approachable to everyday users and will focus on more user-friendly developments.
“We need a world where an indie creator can effortlessly create an NFT and sell it for $5 to his community of supporters, as well as where a pop icon can use NFTs to establish close contact with her multi-million audience in a sustainable way,” the company said.
As opposed to Rarible, LooksRare is a relatively new platform in the market, having launched in January 2022. Co-founded by pseudonymous Zodd and Guts, LooksRare came about by launching a vampire attack on the largest and most popular NFT marketplace OpenSea.
For this, LooksRare leveraged its LOOKS token to extract OpenSea’s existing user base by offering them free tokens. Those existing OpenSea users who traded more than 3 ETH worth of NFTs on the platform during a certain period were eligible to claim their free LOOKS tokens.
On Rarible, both the buyer and seller pay a 2.5% commission. Meanwhile, the community-focused LooksRare charges a 2% fee on all trades, 100% of which goes to those who stake their LOOKS tokens in the form of WETH. It offers support for both Ether (ETH) and Wrapped Ethereum (WETH).
Creators on Rarible can also set royalties, a percentage of future sales that will be paid out to them automatically whenever their NFT is resold. It further allows for split royalties, where several creators who collaborate on a project can divide secondary sale royalties.
While LooksRare one-upped OpenSea by launching its own tokens and giving it free to the users of the dominant NFT platform, whose users have been urging the company to reward its early and loyal users by airdropping their tokens, the model is not unique to LooksRare.
Rarible has its utility token called RARI, which governs Rarible DAO, a decentralized autonomous organization. As a governance token, the token holders vote to shape the future of the platform.
Besides participating in governance and submitting and voting on proposals to improve the platform, this ERC-20 token was also launched by Rarible as part of a liquidity mining program. Under the program, active users are incentivized with rewards paid out in RARI tokens.
“Driven by the will to give our community the power to influence decisions and incentivize active participation. We are launching our governance token. This new project-management model has proven to be efficient within the DeFi industry, and we’re excited to launch the first governance token in the NFT space,” the team said at the time of the RARI token’s launch.
Much like the RARI token, LooksRare rewards its users with the LOOKS token. Every buyer and seller of the platform is rewarded with 2.8 million LOOKS tokens per day for a month.
The platform that currently boasts 569.73% APR with LOOKS offers three ways to do so. The first is by staking where 100% of LooksRare’s trading fees are redistributed proportionally to LOOKS stakers. The second is through trading, meaning you earn LOOKS every time you buy or sell an NFT on the platform. Third, you can provide liquidity to the LOOKS-ETH pair on Uniswap V2 to earn additional LOOKS rewards in addition to DEX Uniswap’s regular liquidity provider rewards.
Launched in the summer of 2020, the RARI governance token has a total supply of 25 million, while currently, just over 5.5 million RARI tokens are circulating in the market.
The majority (60%) of RARI’s total supply is reserved for the platform users to be distributed to buyers and sellers over the first four years. About 41,250 RARI tokens are distributed every week among users building on the platform, in proportion to the sales volume, according to its website.
In comparison, LooksRare is distributing over 2.8 million LOOKS in trading rewards and more than 4,000 WETH in trading fees.
LOOKS, which has a maximum supply of 1 billion, is currently a $680 million market cap cryptocurrency trading at $3.83, down over 46% from its all-time high at $7.10, hit on Jan. 20. Currently, just under 175 million LOOKS are circulating in the market.
The token is currently available on popular centralized exchanges (CEXs) like FTX, Huobi, Gate.io, and Bybit, among others, as well as decentralized exchanges (DEX) Uniswap.
Meanwhile, RARI has a market capitalization of $46.6 million. The token hit its all-time high in March 2021 at $46.70 and is currently trading at $8.31. As for where to access these RARI tokens, the cryptocurrency is available on popular CEXs Coinbase and Kraken, as well as DEX Uniswap and SushiSwap.
Rarible has taken one step further as it works towards transitioning to a true DAO to ensure transparency and decentralization over the platform. Investing in the RARI token allows one to invest in the Rarible ecosystem as not only can you assist in the curation of artwork and moderation of creators, but also stake your RARI tokens to earn yield.
Billionaire investor Mark Cuban, who backs popular NFT platforms OpenSea and SuperRare, recently revealed that he also owns RARI tokens in his crypto portfolio. Shark tank star and owner of Dallas Maverick also said in an interview that 80% of his investments are now in and around cryptocurrencies, and DAOs are one area he is particularly interested in because it is “changing decision-making.”
Rarible DAO is a separate entity from the marketplace, and while the voting power is currently advisory only, the project is working towards its goal to become a completely decentralized and trustless DAO system and give its users full control over the platform.
But Rarible is not alone in its pursuit of handing all the control to the community, LooksRare is planning to have its token governance rights, as well, in the future DAO.
On Rarible’s marketplace, NFTs range from digital artworks, photography, music, games, to domains, and parcels of virtual land. The platform aims to link sellers, who are typically content creators, such as digital artists and buyers.
Before OpenSea became the most used NFT marketplace, Rarible was pulling in higher monthly trading volumes than its competitor, but it has since then lost some of its edges. Overall, Rarible has managed $250 million in total trading volume, as of January 2022.
LooksRare is a clear winner when it comes to volume, as it has even been beating OpenSea’s numbers. In total, LooksRare has posted $8.96 billion in volume, that too in just over a fortnight.
The platform has been recording over 30k in total transactions while attracting between 1k to 3k users daily. When it comes to revenue, LooksRare has been generating $176.4 million overall. And by distributing the fees to those who stake LOOKS tokens, the platform is allowing anyone to earn a share of the marketplace’s revenue.
All of these metrics have led LooksRare to acquire a dominant position in the NFT market, now accounting for the majority of the share at just over 69%, though down from its 78.3% peak just after a week of its launch.
Rarible’s share, on the other hand, is down under 1%, while at the beginning of 2021, it was at about 22%. Still a small player in the NFT market, Rarible posted a 5% increase from October, with the total value of volume coming in at an estimated $18.2 million.
Additionally, over 400,000 NFTs have been minted on the marketplace so far, and about 1.6 million users make up its overall community.
The older NFT marketplace has been working with many notable artists and companies, including digital artists like Pak, Aavegotchi, and eBoy, as well as Twitter, Floyd Mayweather Jr, and Lindsay Lohan, who have launched their projects on Rarible.
Rarible also partnered with Adobe to use the software giant’s Content Credentials to verify the authenticity of the digital content to “fight misinformation with attribution and verifiable truth of content.”
Besides supporting the most popular blockchain for NFTs, Ethereum, Rarible have also integrated Tezos and Flow. As a multi-chain platform, Rarible allows users to mint NFTs for near-zero gas fees and is planning to expand its support to several other major blockchains such as Solana and Polygon.
The platform has been hard at work throughout 2021, as NFTs went mainstream.
‘Lazy minting’ was one of the features introduced by Rarible, which allows both creator and buyer to not pay upfront gas fees but only when the sale actually happens. According to co-founder and head of product Salnikov, this feature makes NFT affordable and “ensures the longevity and sustainability of the industry” with “zero crypto onboarding.”
Rarible also allows its users to send NFTs as gifts even when the receiver doesn't have a crypto wallet. Another big development came in the form of Rarible Messenger, which was launched late last year to enable users to message any wallet on Rarible.com and all of its supported blockchains. Currently, instant message notifications are supported with other features like group chat to be introduced in the future to help users connect to their fans and communities.
“While we’re rolling it out as a built-in marketplace messaging tool, our ultimate goal is to release it as a standalone app to solve the blockchain messaging issue at its core, providing a decentralized and user-friendly solution for everyone out there,” said Rarible at the time.
In 2022, it introduced an order management tool to identify and cancel potential “risky sale orders” from OpenSea, helping users differentiate between their active and inactive orders.
LooksRare meanwhile is working on a feature that would let creators mint NFTs directly on the platform.
“To have freedom from control, your collection needs its own smart contract. One that you own,” said the team but noted that delivering the feature will take time.
NFT Sales had a 25,000% increase in 2021 as they reached $25 billion. After this explosive start, just one month in 2022, NFTs are already off to a good start. NFTs are clearly here to stay with their adoption and use cases only growing further.
Amidst NFTs’ mainstream popularity, several marketplaces have popped up. Among them, Rarible has managed to gain traction and make its name thanks to being user-friendly and having interactive UX/UI. It is continuously expanding and scaling its multi-chain operations while collaborating with other projects in not only the NFT but broader crypto space.
Rarible’s governance token RARI further helps it gain attraction. Much like Rarible, LooksRare offers its users earning opportunities through its reward and staking system.
Both LooksRare and Rarible are also grappling with the issue of “wash trading,” as participants manipulate the rewards model and farm more tokens.
But it is just the beginning and not only are these platforms themselves developing, as NFT space grows, so will the marketplaces, with more to emerge, as well and give the existing ones stiff competition with even better incentives.