- The LooksRare team on Monday confirmed it had received in excess of $30 million in rewards
- The report and explanation provided raised split opinions within the LooksRare community
The team behind NFT marketplace LooksRare has revealed that it cashed out $30 million in ETH, much to the community’s disapproval. One member of the team elucidated that the earnings the team received have never been secret, providing details to prove so.
The team member, Zodd, said that the funds were directed to more than ten team members. He explained that to keep the project afloat, the contributors worked around the clock for more than six months without any remuneration until their first WETH earnings came through. He added that the members collectively incurred up to 7 figure pre-launch costs.
“The LooksRare team has been grinding night and day for 6+ months with zero compensation until the first team WETH distribution. I can also tell you that team members also collectively fronted more than 7 figures in costs prior to launch,” a tweet from the LooksRare contributor read.
He added that a good portion of the funds was going back into NFTs anyway.
User privacy concerns necessitated the use of a coin mixer
On the question of using a coin mixer (Tornado Cash) – a tool often employed to extensively obscure cash, Zodd said that it served to retain the anonymity of the creators, adding that as for anons, privacy is more than a fundamental right – it is a requirement.
Despite the convincing explanation, a section of the community remained unimpressed by the action. The unmoved members demanded that the team purchase back LOOK tokens rather than holding funds in ETH.
When users sell their NFTs on the LooksRare marketplace, they receive LOOKS tokens as compensation. LOOKS tokens can be staked to reap the rewards, and this is how the developer team managed to cash out the $30 million.
In this case, the team staked the unattributed tokens and received rewards in wrapped ETH. The WETH was then cashed out via a coin mixing protocol. Following confirmation of the official team’s doings, LOOKS dropped by up to 15% in the first few hours.
LooksRare only launched last month as a potentially strong OpenSea competitor, and by the second day of launch, it had doubled the latter’s transaction volume. Data from DappRadar shows LooksRare currently leads in 30-day, 7-day and 24-hr NFT trading volumes.