NFT trading volumes hit $2 billion in February, highest since LUNA crash, thanks to blur

The war for market share in the space of non-fungible tokens (NFTs) may have positive effects after all.

Much of the increase can be attributed to the growing popularity of zero-fee marketplace Blur. While NFT sales, the number of tokens traded, decreased by around 32% from January, trade volume, the amount of cryptocurrency transacted across those trades, increased by around 120%. Much of this has to do with incentivized trades ahead of Blur’s native token airdrop in mid-February.

Sara Gherghelas, blockchain research analyst at DappRadar told CoinDesk that while Blur is gaining market share and challenging the historically leading NFT marketplace OpenSea, the marketplace is not bringing new traders into NFTs. While OpenSea is aimed at retail traders, Blur’s focus on professional traders can increase trading volume, not new buyers.

“Blur does not make for adoption,” Gherghelas said. “Right now they’re just bringing hype with the token launch, but it’s impressive what they’re doing.”

Since Blur launched in October, it has been focused on targeting floor-sweeping NFT traders who want to make large purchases without fees. It quickly gained popularity by encouraging traders to trade on the platform to be eligible to receive their original token BLUR before the token’s release in February. Two days after the token was published, Blur surpassed OpenSea in trading volume, and has since challenged the leading marketplace’s status.

While Blur has played a major role in February’s NFT trading volume, DappRadar has also reported that Yuga Labs’ NFT collections contributed 30% of Ethereum-based NFT trading volume last month. Its Dookey Dash skill-based coin played a big part in this figure – earlier this week the winning key, an NFT earned by receiving the highest score in the game, sold for $1.6 million.

Gherghelas told CoinDesk that Yuga Labs customers don’t care about coveted rarities in the NFTs, and that dedicated customers will buy what they drop to become part of the larger community the company is building.

She noted that Yuga buyers will be ready to embrace TwelveFold – the upcoming Bitcoin NFT generative art collection.

“It’s another way that they’re trying to dominate the market,” Gherghelas said. “It’s surprising why Yuga Labs wanted to launch this…this could be something interesting that the market will develop [towards].”

The rush of Yuga Labs fans to jump into the sewers and play Dookey Dash wasn’t the only bullish sign for blockchain gaming, according to the report. While 2022 saw the decline of the game-to-earn model popularized by projects like Axie Infinity, in 2023 the Web3 game projects focus on the metaverse and being able to develop better projects, supported by game engines like Unity which released support for SDKs for MetaMask and other decentralized projects.