Blur takes over OpenSea as Ethereum NFT Trading takes off

Following two months in a row of sales growth, NFT trade accelerated rapidly in the past week which Ethereum NFT volume more than doubled during this time. It is because of a developing market that the emerging marketplace Blur has overtaken leader OpenSeawith traders quickly flipping valuable NFTs as they are DeFi tokens.

In accordance data from DappRadar, Blur has generated $460 million worth of Ethereum NFT trades in the past seven days – a 361% increase over the previous time frame. Meanwhile, OpenSea saw a 12% increase in trading volume to $107 million during that period. The third-place marketplace, X2Y2, had just under $11 million in trades at the time.

All in all, CryptoSlam points to a 155% week-over-week increase in Ethereum NFT trading volume. The increase in volume comes during a week where Blur has dropped the BLUR management token to NFT traders who earned rewards through the marketplace, and also by trading elsewhere ahead of Blur’s own launch last fall.

The BLUR token has a market value of 466 million dollars, at the current price of $1.20 per token, and it seems that at least some NFT collectors have thrown their airdropped funds back into buying NFTs. And they primarily use Blur to buy and sell NFTs, as market data shows.

However, the increase in trading volume at Blur does not appear to be primarily driven by traders simply selling their BLUR tokens and buying and holding high-value NFTs. Instead, whale traders with significant NFT holdings appear to be flipping NFTs with even greater frequency than before in an attempt to increase potential future token reward allocations.

For example, the biggest NFT project (across the entire market) in the last week in terms of trading volume is Otherside, Yuga Labs’ upcoming metaverse game. The NFT plots generated around $63 million in trades in the past week, per CryptoSlam, marking a 318% week-over-week increase.

The biggest seller during that span is the wallet to MachiBigBrothera known pseudonymous NFT trader, who was involved in almost 1300 Otherside NFT trades generated a turnover of 4.3 million dollars in the process. A look at his trading activity shows a constant flood of incoming and outgoing trades, and this is just one example of many.

It is facilitated by Blur’s unique marketplace model, which not only largely incentivizes heavy activity with the promise of token rewards, but specifically rewards traders for using bid pools that enable bulk trading for NFTs.

Blur is teasing its next “Season 2” token airdrop, specifically noting that traders who “bid on peak collections closer to the floor will get more rewards.” In other words, traders who place a bid close to floor price– that is, the cheapest available NFT for a particular project – of a popular project will maximize their eventual rewards. They both buy and sell in bulk as a result.

That is why projects such as Otherside, the Mutant Ape Yacht Cluband Moonbirds everyone is flying this week and why many of the NFTs in these projects are trading hands over and over. And MachiBigBrother, the aforementioned whale trader, currently sits atop Blur’s Season 2 trading rewards leaderboard.

DeFi, an umbrella term for non-custodial trading and lending services, took the Ethereum space by storm in 2020 and has played a significant role in the growth of the ecosystem ever since. Now, tThrough token rewards and gamification techniques, Blur has encouraged traders to treat NFTs more like DeFi tokens, flipping frequently and trying to maximize all potential benefits through liquidity mining. Some traders even have posted guides on how to best mine Blur’s token rewards without making potentially costly mistakes in the process.

The NFT-meets-DeFi approach is not entirely new. We have seen DeFi-like implementations for NFTs in recent months, such as Sudoswap and Hadeswap which embraces liquidity pools versus traditional marketplace listings, plus BendDAO use that kind of format for NFT-based loans. Other NFT-based loan protocols have increased in recent months and flourished.

Last August, amid earlier debates surrounding NFT flipping and royalties, Crypto Twitter personality Cobie tweeted that NFTs are “altcoins with images.” It was a controversial solution at the time, but Blur’s DeFi-like approach to NFT trading has executed this concept on a scale previously unseen – and the impact has been huge.

OpenSea, long the market leader in terms of trading volume, has been overshadowed by Blur’s trading frenzy – and as a result, OpenSea announced Friday that it has temporarily cut its own 2.5% marketplace fee, and will cut back on some of the rights enforcement protections for creators. This means that OpenSea, in an effort to remain competitive with Blur, is effectively going “zero fee”, forgoing the fees that drive its own primary source of income, as well as the fees that fund most NFT projects.

As when OpenSea publicly considered changes to the creator royalty model last autumn many NFT artists and creators have vocal pushed back against the move. But Blur, who apparently don’t fully respect cross-project royalties forced OpenSea’s hand last week as the longtime leader tries to adjust to a new normal.

OpenSea still serves more unique wallets than Blur—about 106,000 for OpenSea in the last week, with about 66,000 for Blur. But Blur has shot ahead in terms of the number of transactions, along with the widening gap in trade volume.

Like more exaggerated examples of wash trading, the flood of NFT flipping and reward “farming” on Blur is confounding the market data – and the increasing trading volume from the last week does not indicate that the NFT market is growing and bringing in many new collectors. . It is mostly whales that trade among themselves.

“We don’t grow the cake,” tweeted Web3 Project Founder Naveen Jain. “It’s the same people circulating assets and ETH around and around.”

That’s apparently true, but the entire market is still forced to deal with the changing tides – from Blur and OpenSea fighting for market share to project creators seeing their revenue streams dry up as platforms cater more to NFT flippers and pro-traders.