LooksRare team cashes out $30M in WETH, faces community backlash

The price of the native token LOOKS tumbled by 15% after the news of the cash-out became public.

LooksRare, a nonfungible token (NFT) marketplace touted to be the OpenSea killer, became the talk of the NFT world after the team behind the project cashed out millions in Ether (ETH).

The NFT marketplace confirmed that the core team has cashed out 10,500 WETH estimated to be worth $30 million from the unattributed staked native token LOOKS. The native token was used for paying fees on the platform and was also awarded to users when they sold their NFT on the platform. The unattributed LOOKS tokens were cashed out for Ether on the popular crypto mixing tool Tornado Cash.

Reported LooksRare Tornado Cash Address Source:EtherScan

The team received heavy backlash from the community on Twitter when the news became public and the price of the native token LOOKS also tumbled by nearly 15% in the aftermath. However, one of the team members took to Twitter to defend the withdrawal and claimed that the team earning rewards in wrapped Ethereum was never a secret.

Zodd, one of the core members, added that the LooksRare team has been working on the platform for over six months without any monetary compensation and had fronted the seven-figure cost before the launch.

Related: Gamestop partners with Immutable X for NFT marketplace announces $100M grant for creators

Responding to a tweet that the team has cashed out nearly $73 million in WETH, Zodd corrected the figure and claimed the actual amount was about $30 million. The team member also dismissed speculations of a probable rug pull and claimed they are going nowhere and the future of the platform is bright. 

The LooksRare team told Cointelegraph that the withdrawn WETH was a small portion earned from the trading fees and no LOOKS token has been sold. The team also added that 80,000 WETH was distributed among LOOKS stakers in the past 30 days.

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To address this:

First off, the amount is incorrect: it’s closer to 10,500 ETH and we have 10+ full-time team members.

You can verify the amount on the blockchain by checking ETH transfers sent out on the analytics tab from the team address.https://t.co/Z4Qkv5T02a

— Zodd (@ZoddLooksRare) February 14, 2022

The LooksRare community seemed unimpressed by the clarification behind the cash-out and suggested that the team purchase back the native token instead of cashing out in Ether. One user wrote:

“Love that you address this like "we haven't been paid for 6 months." So each team member just cashed out over 3 million USD (for 6 months' work) leaving the public bag holders broke with a shitty chart like this? Joke.... community-driven lol. Another crypto sad joke tbh.”

Another user questioned the motive of using a mixing tool for cashing out and wrote:

"So why tornado it? Seems like you kinda got caught cashing out and now damage control."