The NFT industry saw a slight dip in 2022, gathering $24.7 billion worth of trades against 2021’s $25.1 billion. OpenSea, one of the largest NFT marketplaces, has dominated the space since its launch in 2017. However, a new player, Blur.io, has taken the lead, boasting 100% more sales volume than OpenSea in the past 30 days.
Blur launched in October 2022 after raising $11 million. Venture capital firm Paradigm led the series round that saw the debut of this fast-growing NFT marketplace. I reached the top in four months after getting $1.04 billion in sales volume between January and February.
Meanwhile, OpenSea realized $479 million in sales volume within the same period. These figures have sparked interest in the NFT industry, with many people using Blur.io for their trades. However, will the lead last, and most importantly, how did Blur get to this point?
Blur.io’s Clever Use of Care Package and Cryptocurrency Rewards
This marketplace features a native token, BLUR, central to its sales success. It promised care packages and hefty cryptocurrency rewards for its users at launch. While it lagged behind the major marketplaces in its early days, Blur kept to its word.
In early February, the marketplace delivered on its promise, delivering many tokens through airdrops. The tactic generated the intended results, with many switching to the platform. Who wouldn’t when early adopters may have made nearly $100,000 from the airdrops?
Blur isn’t letting the initial success get to its head, as it has another massive airdrop on the line. Its season 2 of airdrops will deliver 300 million tokens to its community. That has undoubtedly sent the NFT marketplace into a frenzy, as those who missed out on the first round hope to lock in.
It is All About Loyalty and Fees
Blur.io has maintained that the key to maximizing the benefits is loyalty. It states that those with 100% loyalty have more chances of receiving mythical care packages worth 100X uncommon care packages. However, the conditions are stricter than you would imagine.
The NFT marketplace listed three ways to max out the loyalty points, and they are as follows:
- Listing non-fungible tokens through the platform. It has advanced tools for listing on multiple platforms at the same time.
- The absence of third-party listings gives a 100% loyalty score in season 2.
- The listing rewards will be as high as the bidding rewards.
Any user that hopes to profit maximally from the season 2 airdrops must drop listings on other marketplaces. That is a tall order, but Blur.io hopes the incentives are enough.
Regarding the latter, the marketplace has zero trading fees and a maximum creator loyalty of 0.5%. This low price has been a big part of its success, especially since OpenSea is built similarly.
On the one hand, zero trading fees attract traders; on the other, maximum creator loyalty discourages creators. Blur.io saw this and said it would implement total creator royalties if creators blocked trades on their OpenSea listings.
Is Blur directly waging an industry war with OpenSea? Let’s see the latter’s response.
OpenSea’s Response and Strategy
The sudden upturn has generated ripples in the NFT industry. OpenSea’s full creator loyalty policy may have made it famous, but the 2.5% trading fee held it back.
In response to Blur’s recent wins, OpenSea announced 0% trading fees for a limited time. The platform also moved to a minimum creator royalty of 0.5%. However, the new move appears to conflict with its earlier commitment to enforcing creator royalty.
A spokesperson from the platform stepped forward to state the company’s long-term strategy. While it recognizes that today’s NFT ecosystem requires a different fee structure, the company hopes to diversify its business model. It hopes to achieve that via foundational infrastructure and creator tools for business growth.
Reservations About Blur’s Tokenomics
Releasing 300 million tokens via airdrops is a massive deal, especially for those who hope to catch on and profit from them. However, some still disagree on the strategy and its effects on the NFT industry.
Pedro Herrera, the head of research at DappRader, states that Blur’s 51 percent token supply allocation to its community is skewed. Hence, Ethereum whales will be the primary beneficiaries of the move. Add that to 80% of Blur’s volume coming from 500 wallets, and you can see the unsustainability of Blur’s strategy.
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