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LooksRare Token & Staking Overview

What is the LooksRare Token ("LOOKS")?

The LooksRare token ("LOOKS") is the protocol token from the LooksRare ecosystem. It is an ERC-20 token deployed on the Ethereum blockchain.

LOOKS supply was pre-minted with 200 million tokens transferred at the deployment and has a supply cap of 1 billion tokens.

How is LOOKS distributed?

The LOOKS token's emission is controlled by the TokenDistributor contract that handles the issuance of freshly minted LOOKS tokens to two contracts:

  1. Distributor contract (TokenDistributor) — It allows staking LOOKS to earn LOOKS tokens.
  2. Splitter contract (TokenSplitter) — It receives LOOKS tokens that are distributed in an asynchronous way ("splitted" based on predefined weights) to:
  • Trading rewards distributor contract (TradingRewardsDistributor).
  • Treasury & team vesting contracts (VestingContractWithFeeSharing).

The LOOKS token is distributed to users in the LooksRare protocol to:

  • Stakers (FeeSharingSystem) — LOOKS token holders can deposit LOOKS that are auto-compounded at each user interaction. This smart contract is an additional layer on top of the TokenDistributor contract, which also unlocks WETH rewards, stemming from the LooksRare exchange's protocol fee collected at every trade.
  • Traders (TradingRewardsDistributor) - Traders can collect rewards using a rolling Merkle-tree based system that distributes daily LOOKS trading rewards based on volume activities (excluding private sale strategies). Computation of the trading rewards is done off-chain.
  • Liquidity providers (StakingPoolForUniswapV2Tokens) – Liquidity providers can deposit liquidity in Uniswap V2 and receive LP tokens that they can stake to earn LOOKS tokens.

Some LOOKS tokens, part of the pre-minted tokens, are vested by strategic sale participants (PrivateSaleWithFeeSharing) that also collect WETH based on the prorata of the LOOKS tokens held in this contract.

Vesting contracts (VestingContractWithFeeSharing) also collect WETH when rewards are distributed to users based on the prorata of the LOOKS held in this contract relative to the total LOOKS eligible for fee-sharing (active + passive staking).

Finally, other preminted tokens (120 million) were distributed through the airdrop contract (LooksRareAirdrop), that relies on Merkle-tree computation, with an added requirement to submit a valid maker ask order.

For details on the token release schedule, please refer to the token economics page.

What is the circulating supply of the LOOKS token?

The circulating supply can be calculated such as:

circulatingSupply = totalSupply() - balanceOf(TokenSplitter) - balanceOf(VestingContractTeam) - balanceOf(VestingContractTreasury) - balanceOf(PrivateSaleWithFeeSharing)

What is the difference between active staking and passive staking for fee-sharing?

The WETH tokens earned through the platform's fee-sharing mechanism are collected differently by Active and Passive stakers:

  • LOOKS stakers ("Active fee-sharing") — WETH are distributed daily to LOOKS stakers (FeeSharingSystem). The LOOKS stakers also receive LOOKS tokens.
  • Passive fee-sharing — WETH are distributed daily to vesting contracts. Participants eligible to passive fee-sharing do not receive LOOKS tokens from the user emission schedule.

Every day, the previous' day protocol fees (in WETH) are distributed based on the total LOOKS staked (both active and passive).

The distribution of WETH for LOOKS active stakers is linearly distributed over the period (since active stakers are free to deposit and withdraw LOOKS anytime). Conversely, for passive stakers, the daily WETH distribution happens at once.

Other design decisions

The design of the smart contracts relies greatly on the previous work and algorithms developed by leading DeFi protocols, specifically Synthetix (SIP-63), SushiSwap (MasterChef), and Yearn (auto-compounding strategies).