OpenSea was the 800 pound gorilla in the NFT marketplace space. On Jan 4th, the company announced a $300M funding round at a $13 Billion plus valuation. All the momentum was with OpenSea and it was poised to get a strangehold on the exploding NFT marketplace space.
But all that changed over the course of 24 hours.
Two weeks into January, OpenSea had already received over 2 billion in Ethereum from its sales and was on pace for another record sales month.
On January 10th, NFT marketplace competitor LooksRare launched. Along with the website launch, LooksRare also launched its LOOKS token. The token would be given to users of the website to incentivize certain activities, such as buying and selling NFTs.
But LooksRare decided to do something else with the LOOKS token. LooksRare decided to give away 120 Million of the LOOKS tokens to current OpenSea users. LooksRare targeted OpenSea users who had bought and sold at least 3 ETH worth of NFTs from June-December on OpenSea. That’s roughly $8,000 worth of activity as of this writing.
The more activity on OpenSea, the more LOOKS tokens you received, in a range of at least 125 tokens, all the way up to 10,000 for the biggest OpenSea users. As of this writing, the LOOKS token is trading for roughly $4 a token. So the airdropped LOOKS tokens to OpenSea users had a value of between $500-$40,000.
Yikes!
$LOOKS Day 10 trading rewards have been distributed.
Active LOOKS stakers earn WETH every block (every 15 secs or so)
The trading rewards calculation period for day 11 is live.
💰 2,866,500 LOOKS ($14.7M USD)
💰 3,577 $ETH ($10M USD)👀💎https://t.co/xLrd3PKRKX pic.twitter.com/ADR3sReGQ4
— LooksRare (@LooksRare) January 21, 2022
Here’s the brilliant part: In order to ‘activate’ the LOOKS tokens, the OpenSea user has to go to the LooksRare website and list an NFT for sale. So the move not only encourages OpenSea users to check out LooksRare, but it makes receiving the LOOKS tokens dependent on actually listing an NFT on the platform.
As you might expect, listing volume on LooksRare immediately spiked, and after a week LooksRare was realizing trading volume of two to three times what OpenSea was seeing!
Another brilliant move LooksRare made is by taking an actual sale on OpenSea, and then calculating how much money the seller would have made if the same NFT had been listed and sold on LooksRare:
LooksRare vs Opensea – @BoredApeYC
The buyer got $3.5k in trading rewards. On Opensea, they would have gotten none.
The seller saved $1.5k in fees and got $3.5k in trading rewards. That's $5k+ more than they would have gotten on OpenSea.
👀💎https://t.co/66hbVzLSXv#BAYC pic.twitter.com/x07xWPwPno
— LooksRare (@LooksRare) January 15, 2022
To be honest, LooksRare should be doing these comparison tweets every day. It’s a great way to clearly demonstrate the price difference in selling on LooksRare versus OpenSea.
How would this apply to an ‘average’ business?
Let’s revisit what LooksRare did in airdropping LOOKS tokens to OpenSea users. What LooksRare did was send LOOKS tokens directly to the wallets that OpenSea users were using. The buyer history was available on the blockchain, so LooksRare had access to sales history and could easily identify the wallets that had generated the sales that met their criteria.
How could this work in the more mainstream business world? Here’s an example: Your fast food brand decides to launch a mobile app where you connect your digital wallet to the app and pay through the app. That means the sales history of your wallet (your digital identity) would be trackable on the blockchain.
Let’s say a competitor fast food chain launches their own mobile app, which is also setup as your mobile app is, so you connect your wallet. When someone signs up for your competitor’s app, they receive 10 free FOOD tokens, that can be used to buy food via your app. Think of FOOD tokens as rewards points that many current fast food apps such as Chick Fil A use today.
What your competitor could also do is airdrop FOOD tokens directly into the wallets of YOUR customers who are using YOUR mobile app! And they could set the same qualifications on the FOOD tokens as LooksRare did on its LOOKS tokens; Your customers would have to go to your competitor’s app to redeem the FOOD tokens. This is also called a ‘vampire attack’, in marketing terms, because the intent is to suck the best users away from your app, and into the competitor’s app.
Be aware of how web3 technologies are impacting marketing
Now is a wonderful time to watch how companies and even individuals are leveraging and experimenting with emerging web3 technologies in their marketing and branding efforts. As these technologies emerge and develop, they will create new and exciting opportunities for companies to market themselves, and deliver better experiences to customers.
Note: Thank you to the brilliant Adel de Meyer for giving me assistance explaining the technical aspects of how the web3 technologies in this article would work. Please follow Adel on Twitter, she’s my go-to expert on crypto, NFTs and web3.
