NFT investors are demanding that marketplaces recognize their users and provide them with value, prompting competitors like LookingRare (LOOKS), OpenDAO (SOS) and WTF to launch vampire attacks on OpenSea.

NFT appears to be continuing its uptrend with no sign of stopping. As of January 14, 2022, OpenSea recorded over $1.03 billion in transaction volume, while its most recent competitor LookRare recorded over $1.79 billion.

Top 8 NFT markets by number of transactions | Source: DappRadar

What is clear is that NFT collectors and dealers seem to be heading where there is value. Since early 2022, the focus has been on “community” and rewarding users for their participation.

OpenSea has generated more than $3.2 billion in total trade volume, although many NFT traders feel the market is betraying the concept of Web 3 “projects.

Community-driven NFT marketplace LooksRare and other platforms successfully conducted a vampire attack, resulting in disgruntled OpenSea users abandoning it for not appreciating and rewarding their participating users.

Participants appeared to have strong support for the value they were creating in the ecosystem and felt that competitors were meeting their needs.

However, will OpenSea’s competitors be able to influence users by claiming value and rewarding their participation? And can other projects exploit the vulnerability of users blindly following these terms and protocols?

SOS: OpenDao receives mixed reviews

Since its inception, SOS has raised 13.7 trillion SOS in staking ($45.6 million) and distributed 50% of its 100 trillion total stash to the community. Until January 12, 2022, eligible users will claim 145% APY for their veSOS governance token, which comes with voting rights for future projects and protocols.

SOS appeared to have sparked a fight for community activism, but was met with backlash after withdrawing its original plan to end the claim by June 30, 2022. Many people have expressed their disappointment and confusion, knowing that decisions are subject to change in a DAO call for a vote, and participation is highly encouraged.

Pool staking SOS | Source: SOS Queries Dune Analytics

There are currently over 200,000 holders and over $2.5 billion is traded and future project launches as well as the current NFT market could see more liquidity flowing into SOS.

SOS is down almost 70.5% and is trading at $0.00000246 despite a surging market that is said to offer unique trading opportunities for the NFT.

SOS/USD price chart | Source: CoinGecko

Is there more to look forward to than just wash trading?

Launched on January 10th, 2022, LookingRare is aimed at OpenSea – or rather, the lack of Web 3 initiatives and incentives – and has caught the attention of many who have debated the “death of OpenSea”.

The token is a “free” deposit, but it comes with a range of transaction fees, including placing NFTs for sale, airdrop requirements, and staking (optional).

Despite the price, according to data from Dune Analytics, more than 110,000 wallets have claimed LOOKS, out of about 60% of all eligible wallets.

Number of LOOKS compared to the wallet address that requested the airdrop | Source: Dune Analytics

LookRare has amassed a total trade volume of nearly $2.4 billion, but this metric only shows a piece of the whole pie. A closer look at the transaction volume gave some warning signals.

Comparing the number of transactions on LookRare with OpenSea shows that OpenSea processed more than 50 times the number of transactions on LookRare.

LookRare is estimated to have 17 times the number of users, but OpenSea’s number is only half that of the competition.

Immediately after launch, investors suspected that traders were washing trading with Larva Labs’ Meebits collection to take advantage of trading rewards.

Daily users of LookingRare vs. Open Sea | Source: Dune Analytics

While a group of individuals on LooksRare are winning and see its model as promising, others are raising questions and concerns about the sustainability of the platform.

Fees.wtf lives up to its name

Many lucky people benefited from the SOS and LOOK airdrops, but the Fees.wft airdrop is a different story. Originally, the project was a toll service on the Ethereum blockchain that calculates the total gas fees spent by users.

A user had to spend at least 0.05 Ether to qualify for the claim and as soon as traders were notified, they rushed to withdraw only to find that the initial liquidity was too low, resulting in 58 Ether ( $188,036) were deducted from the bot. One user tweeted:

“WTF: One service, one token, and five minutes into launch, a bot drained 58 ETH from the pool. Let’s see what happened.”

Cleverly named, it seems users don’t need to mint Fees.WTF NFT to experience the feeling of Rekt (Failure). Users unfamiliar with *Slippage Tolerance found that their orders filled significantly less than expected, with one user eventually trading above $135,000.

*Slippage tolerance is the difference between the price at the time of transaction confirmation and the actual price during token swap on AMM that is acceptable to the user.

Owner WTF Daily | Source: Dune Analytics

Despite down almost 84% since post-launch surge, WTF seems to continue to attract the attention of new holders as the claim window is still open and the number of holders is growing.

WTF price chart for daily frames | Source: Dune Analytics

By programming the contract that the team generates 4% per trade, the team is said to have made more than $3 million and continues to grow. Although the platform “intended” to reward users for the fees they spent, Fee.WTF still forced users to pay more fees than it actually was.

According to Lefteris Karapetsas, the founder of Rokitapp, the smart contract is encrypted to siphon ether from anyone who interacts with the contract. Upon further review, Karapetsas found that the contract is encrypted with a fixed whitelist of people who don’t have to pay transaction fees.

“Oh hey, let’s see post detailed study that the Fees.WTF team just published. If that doesn’t tell you what you need to know about the “project,” then I don’t know what else to say.”

Despite the suspicions of the wash trade and the controversial issues surrounding Cole, co-founder of Pudgy Penguin and investor in the project, LookRare still offers OpenSea a competitive advantage as it meets the current needs of Web 3 users. OpenDAO and LookingRare are excellent examples of, what OpenSea’s competitors own and are waiting to be exploited.

As more individuals enter the crypto ecosystem and many support Web 3 incentives, traders need to pay close attention and assess whether to put their attention and value on where to go as there are platforms that focus on that to exploit the vulnerability of their needs.

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