Blur blows away OpenSea and wins 82% of NFT trading volume
OpenSea cuts fees to zero in futile attempt to discourage marketplace upstarts
It’s a time-honored tenet of business – cut the prices and the customers will come.
Tell OpenSea.
A week after the NFT marketplace scrapped the fee it collects on trades, Blur, its upstart rival, hasn’t missed a beat. The four-month-old NFT marketplace has captured a staggering 82% market share of Ethereum trading volume in the past week, according to a Dune Analytics dashboard created by hildobby, the pseudonymous researcher.
Blur went into overdrive after the project airdropped 12% of its BLUR tokens to the NFT trader on February 14th. It has accounted for more than 70% of the daily NFT trading volume on Ethereum for each day since the airdrop, prompting OpenSea to cut its fees. Blur launched with no-fee trading, which other marketplaces such as SudoSwap also do.
New Airdrop
Hildobby, whose dashboards are among the most popular on data site Dune, told The Defiant that they see a few primary trends at work. First, Blur have teased the release of a new airdrop that will make up another 10% of the offering in the near future.
The marketplace called Twitter that the way to maximize airdrop is through “loyalty”, which can be proven if users list their NFTs for sale exclusively on Blur.
NFTs are securities? All eyes turn to the Top Shot Case
Judge says it’s ‘plausible’ NBA top shot moment NFTs may have to register with regulators
Hildobby also pointed to Blur’s design. “Users who moved have become familiar with Blur and are offered better liquidity, the floor price is often lower and the bid price higher,” the researcher said. “This shows that users who have migrated find Blur a superior product even when the fees are no longer lower.”
Not everyone is convinced that Blur’s strategies will be sustainable. Kofi Kufuora contributor to DeFi Llama and former partner at 1confirmation, a venture firm, claimed that 53% of the volume on Blur comes from 500 wallets on Twitter.
Laundry trade
These can be quite professional traders, or potentially also users who want to maximize their airdrops, or a combination of the two. Laundry trading is certainly not unheard of in the NFT space – a study by Hildobby estimated that half of the NFT volume in 2022 was laundry trading.
Pacman, Blur’s former pseudonymous co-founder, revealed himself on February 21 at Twitter and used his legal name, Tieshun Roquerre, in an interview with The Block.
The battle between the two marketplaces has featured moves and counter moves from the implementation of royalties paid to NFT creators.
Cutting its own fees on February 17 wasn’t OpenSea’s only big shift that day – the marketplace also dropped enforced royalties to 0.5%.
Lower royalties
When The Defiant followed up with him, Kufuor said OpenSea may have made a mistake. “The more creator-focused demographic of the NFT space liked OpenSea still trying to stand up for royalties,” he said via Twitter messages. “Then the decision [to lower royalties] did not bring in any users or volume from that group.”
Kufuor admitted that the incentives are clearly on Blur’s side. “Pro traders already got 0 fees and 0.5 royalties on Blur AND Blur gave them free money,” he said. “If they moved, they would get the same fee rates but would miss out on the free money.”
