Head of Partnership at DODO NFT Researcher at Puzzle Ventures
Head of Partnership at DODO NFT Researcher at Puzzle Ventures
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If you look at the rankings of NFT marketplace trading volumes for the past 3 months, you will find that Blur's total volume has exceeded OpenSea, and almost all of the NFT projects’ floors are listed on Blur. What is the reason that Blur is so successful, and can its success continue? This article will take you through the journey of Blur.
At the end of March 2022, a piece of fundraising news appeared on Twitter, Blur raised 11M, led by Paradigm, and other angel investors are a group of NFT influencers, including Deeze, Zeneca, 6529, etc. The project information given in the announcement is limited, and what they want to do is: NFT pro-trading.
At the end of the last bull market, the NFT market was also heating up, with a variety of new blue-chip projects and NFT trading markets emerging. Since Looksrare opened up the new frontier of trading markets by starting the first airdrop of tokens to incentivize trading, new ideas were opened up. x2y2 is another competitor in this competition, introducing the concept of listing incentives.
Since then, the trading volume of these markets has been growing, and although most of the trading volume is wash-trading to earn tokens, the actual volume should not be underestimated. It is estimated that there are more than 15% to 20% of the volume occurs outside of OpenSea.
The NFT market has broken away from the situation where OpenSea dominates, and has become a market “led” by OpenSea. Although many people still only know Opensea, for the degens, even if there is a 0.1 ETH price difference, they won't take the loss, so they keep switching between platforms to get the lowest price for NFT. Under such demand, aggregation tools emerge.
There are two different types of users for using NFT aggregators, who value two different functions.
The first type is someone who wants to purchase a specific NFT and uses the aggregator for the purpose of more conveniently browsing all the NFTs on offer, finally purchasing an NFT they like or one that has been priced incorrectly. (Sniper)
Another type of user wants to buy a large number of NFTs in one go, and they will use the aggregation tool, because if they sweep the floor individually in an individual market, they will suffer a loss, and the major exchanges have not yet had the ability to bulk purchase at that time. (Trader)
The aggregators led by Genie started to show up, and after Genie went online, it attracted a lot of trading volume. But a few months later, it was replaced by Gem because the latter had a better UI/UX, faster updates, and lower failure rates in transactions. However, Genie was unable to make a comeback and was eventually acquired by Uniswap. This demonstrates that aggregators attach great importance to the user experience because they only help users buy NFTs more conveniently and don’t have a deep moat. If the product experience is not good, users might as well go directly to the market for trading. So better and faster products will quickly take the market share.
The majority of the trading volume in the market is dominated by big players, often applying the 30/70 law, which states that 70% of the trading volume is in the hands of 30% of the users, so the demands of these users are the most important. The user experience of aggregators like Gem and others is not much different from that of ordinary marketplaces. They are all similar to shopping websites, with relatively slow loading speeds, allowing users to easily browse each NFT and decide to buy gradually, rather than engage in professional trading.
NFT traders attach great importance to the timeliness of information, the smoothness of operations, and professional trading functions, and may miss opportunities because of a few seconds of time.
Before Blur, there were also some professional tools, such as Trait Sniper, but most of them were paid, with limited features and performance, and were not suitable for most traders. Blur was born to meet the needs of NFT traders, it has a fast and clean user interface, and real-time market data updates for browsing, sniping, and bulk purchasing, making it the most advanced tool for NFT traders to date.
Since mid-last year, Blur has been spreading in the NFT circle of whales, thanks to the powerful influence of angel investors and KOLs. They carried out a platform closed test, the rules are simple and invitation-only. They give users scores based on their past year of trading history on OpenSea, and users can also earn points by sending invitation codes to other users. The higher the score ranking, the higher the priority for testing eligibility. Since the market is dominated by big whales, these users with traffic can represent a large market share.
Blur was developed from the beginning for professional users, which means that Blur's various functions had a general direction during the closed test, and it did not need to spend more effort to win the favor of ordinary retail investors. On the contrary, platforms like OpenSea have a large number of users, but their trading volume is not much greater than Blur's. By choosing this path, Blur saved a lot of marketing resources, it didn't need to do retail marketing like Looksrare, x2y2, or gem to make them use the product. By allowing big whales to use Blur, these KOLs will indirectly promote Blur on Twitter, and its effect is very significant. If the product itself is of better quality than existing competitors, retail investors are also willing to give it a try.
For an aggregator, the aggregation function cannot make money. Once a decision is made to charge fees, many users may not be willing to use the platform, as they can obtain the NFT order information on the platform and bypass it to directly purchase on the market where the orders are placed. However, if the platform makes the information untransparent, there will be fewer users using it. So the aggregator must act as a volume hub and earn money through other products.
Like Gem and Genie, aggregators of this type eventually failed to find the source of income and were eventually acquired. OpenSea, in order to retain user traffic, will eventually integrate Gem into its own UI. Uniswap, on the other hand, achieved its grand plan of introducing defi users to purchase NFTs through Genie. From the above, it can be seen that a sole aggregator product is not feasible, and composability must come into play.
Blur naturally thought of the marketplace. While ensuring that users get the best NFT quotes on chain, it allows users to place orders and make bids on the same platform. This cannot be done on other platforms, so Blur will earn profit from buying and selling while users use the aggregation function. This makes Looksrare and x2y2 jealous, to the point that they are also developing their own aggregation solutions, x2y2 is about to release Pro, and Looksrare is developing an aggregation tool based on Reservoir.
Although Blur's API is in development, the speed of development is quite slow, making it impossible for the outside world to access the liquidity of Blur's own market, temporarily creating a system that only goes in and not out. That is, Blur can aggregate external liquidity, but other aggregators cannot aggregate Blur. However, due to Blur's large market share, people have started to feel dissatisfied with its monopoly in the aggregation market.
How can an aggregator make the volume of its own marketplace even surpass OpenSea? Token rewards and product operations come second, and the most important thing is optional royalties. Because of the issue of optional royalties, OpenSea and Blur are fighting.
When Blur was launched, the most notable thing was optional royalties. Of course, it wasn't the first to do so. As early as the end of August 2022, x2y2 was the first to announce that they support optional royalties. This has led to many questions because most of the NFT projects’ ongoing revenue is from secondary market royalties. Many people think that this is not good for the entire NFT ecosystem, but this has become an opportunity for these second-tier marketplaces to expand.
NFT royalties are a fee that needs to be paid to the project team in the NFT transaction, set by the team itself (usually around 5%-10%). Based on the standard ERC-721 contract, the project team cannot forcibly collect royalties, and it is completely dependent on the implementation of the marketplaces. Because the high amount of royalties makes users unwilling to pay, many people prefer to choose these optional royalty markets to list NFTs. Since sellers will earn more profits in optional royalty markets than in mandatory royalty platforms, they are more willing to sell at a lower price in optional royalty markets, which pulls down the floor price of the marketplace. The price on mandatory royalty trading markets like OpenSea is often relatively higher, which reduces the buyer's incentive for purchasing on such platforms, and the volume begins to decrease.
Actually, shortly after Blur came out, x2y2 had already realized the potential threat of Blur, because Blur has zero transaction fees, while x2y2, which also has optional royalty, still has a 0.5% transaction fee. x2y2 once tried to counteract Blur by restricting API keys, and although the problem of buying x2y2 NFT on Blur was solved, one still can't list NFTs on x2y2 through Blur.
For OpenSea, the volume of transactions it lost is much greater than that of x2y2, to the extent that the trading volume is almost caught up by Blur. During the bear market crisis, OpenSea finally decided to make a move. At that time, it had two options: the first was to announce that it also became an optional royalty platform, and the second was to implement a new royalty enforcement program. However, due to public pressure and the fact that even the execution of the first one could not compete with Blur's low transaction fees, it had to choose the latter.
In November 2022, OpenSea released the "Operator Filter Registry," a blacklist that blocks the optional royalty markets in the contract code and requires all new projects after January to choose between optional royalties and mandatory royalties. If mandatory royalties are selected, they must use OpenSea's "Operator Filter Registry" code. The blocked trading markets, of course, consist Blur. The impact of this news is so great that some trading markets have to compromise, such as x2y2. Their marketing strategy is to get the traffic of long-tailed new projects, so if these new projects choose to implement OpenSea's blacklist code, they can't be traded on x2y2. When x2y2 enforced the royalties, it is then removed from the blacklist. The effect of this blacklist strategy is a little delayed. When everyone was still celebrating the ATH volume on Blur during the holidays, the storm is coming.
The long-awaited two major new NFT projects in 2023, Captainz of Memeland and Sewer Pass from Yuga Labs, broke the silence. Without exception, they adopted the OpenSea blacklist and kept Blur out. All the traffic was on OpenSea and x2y2, setting a new high, while Blur's traffic suddenly became third.
So Blur got stuck in a strange situation. Although the royalties of existing old projects could not be enforced, the volume of these old blue chips still remained on Blur. But over time, as more and more new projects emerged, Blur could not earn future fees from these projects, in other words, it could only live on old collections.
However, there is always a way out of trouble. Not long ago, these blacklisted projects could actually be listed on Blur! Why? It turned out that Blur used OpenSea's own underlying trading protocol Seaport to develop a new trading market. Since Seaport is OpenSea's own protocol and is not blacklisted. Although the problem has been solved, the new NFTs still need to pay royalties because Seaport enforces them. But this is already pretty good, as Blur still saves 2.5% on transaction fees, and the floor has started to appear on Blur. Although the advantage is no longer great, it is enough to make up a game.
What kind of method can a new platform use to attract users? As a Web3 native protocol, the method used by Blur is naturally an airdrop!
As long as users list an NFT on Blur for more than 14 days, they can claim an airdrop, the amount of which is determined by their previous trading data on OpenSea. However, the airdrop is not tokens but mysterious boxes, which can be opened during the final token launch to obtain tokens. In other words, it's a delayed launch, giving users some off-chain points. This has been criticized by many users, so the initially high trading volume for the first few days did not last long. However, there is no way around this, because the market was really bleak in Q4 2022, with the entire NFT market value down 80% from its peak. It's better to slow down the airdrop and divide it into several phases. So they did, dividing it into three phases.
The second airdrop was determined by the trading volume on Blur, which was released in November. However, due to analytical error and wash trading, the number of boxes released was not accurate and many large traders only received a very small number of boxes. This was not 10 times the amount of the first airdrop as previously promised. At the same time, users were informed that this was not the last airdrop, the third airdrop, and the true token launch would be in Q1 of 2023. This caused more criticism from the community and even some FUD at one point. Blur had to compromise and adjust the airdrop amount to around 10 times the amount of the first airdrop. This move brought even more questioning because dropping coins in this way made everyone realize that these airdrop boxes were not worth much money. Moreover, in the case of an unclear future tokenomics and the impact of a bear market, the first thing that people thought of was dumping the airdrop. Many people think this will trigger the next NFT bear market. However, this did not affect Blur's trading volume, instead, the rules of the third airdrop pushed Blur to its peak.
The reward for the third airdrop is based on the buy orders (bids) user placed on Blur. The more trading volume the project has, the closer the bid price and floor price are, and the more airdrop rewards will be rewarded. Therefore, many idle funds in the market start bidding on Blur in order to receive the airdrop, causing the bid-ask spread of some blue-chip projects to approach zero. The total amount of buy orders for most blue-chip projects even exceeds the sum of all buy order value. This has led to extreme liquidity for NFTs on Blur and increased trading volume, as trading is no longer just limited to simple buy listings, but also involves accepting bids.
February 14th will see the third wave of Blur's airdrop and the long-awaited token release. Due to the expected airdrop, the funding pool for the buy order (bids) already has a balance of nearly 25,000 ETH. This is actually a way to rent liquidity through pre-mining, but the clever part is that it does not reveal the actual amount of the airdrop, which creates speculations. After the airdrop, good tokenomics is necessary if Blur wants to maintain such level of liquidity.
The first marketplace to use token economics was Looksrare. They introduced NFT trade mining, and listing mining and even designed a system where the closer the price is to the floor price, the more rewards you get, to increase listing liquidity. However, rewarding trades will cause wash trading and ultimately not bring much growth to the platform (just equivalent to a continuous token offering). Blur understands this and is likely to reward orders mainly to attract organic trading volume and market share, especially for buy orders. Its low transaction fees and optional taxes are enough to attract traders to create sell orders (listings) on Blur, so it doesn't need too many rewards for sellers. Other marketplaces s do not have a mature buy-order incentive mechanism, making traders and whales more willing to place buy orders on Blur to earn incentives. In the NFT market, especially in bull markets, the number of listing acceptance is far greater than bid acceptance due to the low liquidity risk of NFTs. However, for a mature market, the buy and sell sides should be balanced. If there is a good incentive model, the potential for buy order volume has a lot of potential. Currently, from blur’s airdrop model, it can be assumed that the closer the bid is to the floor price (the lower the spread), the higher the reward for buy orders.
Let’s do some math. If Blur can maintain a daily flow of 10,000 ether, assuming that Blur will charge 0.4% in fees in the future (it will not charge a higher fee than x2y2 for competitive reasons). Assuming it takes half of his revenue 0.2% to maintain the Blur token to distribute rewards, then it can give a token reward equivalent to around 7,300 ether in a year. If it still maintains the current liquidity of 25,000 ether, the APY will be around 30%. Although the risk of market making is high, it seems that its liquidity will not decrease too much after the airdrop, after all, the volume has not reached the bull market yet, and it also depends on the token price. Let's wait and see how the token launch will turn out.
After the token launch, besides good token economics, Blur can also make improvements in its product to solidify its position as the leader in the NFT professional trading market.
For NFT professional traders, other than better and smoother UI/UX, they prefer a one-stop experience. Blur has already made it possible for traders to buy aggregated NFT orders, at the same time list and bid on NFTs on its own marketplace. However, this is far from enough for traders, and there is still a lot of room for improvement in the future. Here are a few ideas:
Traders need to know not only the current floor price of a project but also the change in the floor price, just like the candle stick chart seen on centralized exchanges. In addition, they must have an understanding of the positions of large holders in the market, which cannot be separated from the analysis charts. For example, some analyses similar to NFTGO can be suitable to put them on Blur.
Although Blur allows users to place buy orders on the platform, it does not aggregate all of the buy orders in the market. For example, it is not possible to know the bids on OpenSea thru Blur, and there is a risk of missing an arbitrage opportunity. Skillet is an NFT buy order aggregation platform that allows users to settle NFTs at a better price. Blur could also include this feature.
For professional traders, in addition to the bulk buying and selling capabilities, they need more advanced order placement capabilities, such as bonding curves like SudoSwap, orders with complex logic, or limit orders that can be executed automatically. These can be referred to as some features of Tensor on Solana.
With all that said, Blur has turned out to be a successful project so far. Its user experience is good, attracting most professional traders on the market to use it and form long-term trading habits. The way of increasing liquidity through airdrops has made its trading volume surpass OpenSea in a short period of time, becoming a dark horse. It will be a very important NFT trading market for a very long time in the future. If it can solve the royalty issue, implement good tokenomics, and improve product features, it will have a very promising future.
For more interesting NFT research articles, please follow me on Twitter.
If you look at the rankings of NFT marketplace trading volumes for the past 3 months, you will find that Blur's total volume has exceeded OpenSea, and almost all of the NFT projects’ floors are listed on Blur. What is the reason that Blur is so successful, and can its success continue? This article will take you through the journey of Blur.
At the end of March 2022, a piece of fundraising news appeared on Twitter, Blur raised 11M, led by Paradigm, and other angel investors are a group of NFT influencers, including Deeze, Zeneca, 6529, etc. The project information given in the announcement is limited, and what they want to do is: NFT pro-trading.
At the end of the last bull market, the NFT market was also heating up, with a variety of new blue-chip projects and NFT trading markets emerging. Since Looksrare opened up the new frontier of trading markets by starting the first airdrop of tokens to incentivize trading, new ideas were opened up. x2y2 is another competitor in this competition, introducing the concept of listing incentives.
Since then, the trading volume of these markets has been growing, and although most of the trading volume is wash-trading to earn tokens, the actual volume should not be underestimated. It is estimated that there are more than 15% to 20% of the volume occurs outside of OpenSea.
The NFT market has broken away from the situation where OpenSea dominates, and has become a market “led” by OpenSea. Although many people still only know Opensea, for the degens, even if there is a 0.1 ETH price difference, they won't take the loss, so they keep switching between platforms to get the lowest price for NFT. Under such demand, aggregation tools emerge.
There are two different types of users for using NFT aggregators, who value two different functions.
The first type is someone who wants to purchase a specific NFT and uses the aggregator for the purpose of more conveniently browsing all the NFTs on offer, finally purchasing an NFT they like or one that has been priced incorrectly. (Sniper)
Another type of user wants to buy a large number of NFTs in one go, and they will use the aggregation tool, because if they sweep the floor individually in an individual market, they will suffer a loss, and the major exchanges have not yet had the ability to bulk purchase at that time. (Trader)
The aggregators led by Genie started to show up, and after Genie went online, it attracted a lot of trading volume. But a few months later, it was replaced by Gem because the latter had a better UI/UX, faster updates, and lower failure rates in transactions. However, Genie was unable to make a comeback and was eventually acquired by Uniswap. This demonstrates that aggregators attach great importance to the user experience because they only help users buy NFTs more conveniently and don’t have a deep moat. If the product experience is not good, users might as well go directly to the market for trading. So better and faster products will quickly take the market share.
The majority of the trading volume in the market is dominated by big players, often applying the 30/70 law, which states that 70% of the trading volume is in the hands of 30% of the users, so the demands of these users are the most important. The user experience of aggregators like Gem and others is not much different from that of ordinary marketplaces. They are all similar to shopping websites, with relatively slow loading speeds, allowing users to easily browse each NFT and decide to buy gradually, rather than engage in professional trading.
NFT traders attach great importance to the timeliness of information, the smoothness of operations, and professional trading functions, and may miss opportunities because of a few seconds of time.
Before Blur, there were also some professional tools, such as Trait Sniper, but most of them were paid, with limited features and performance, and were not suitable for most traders. Blur was born to meet the needs of NFT traders, it has a fast and clean user interface, and real-time market data updates for browsing, sniping, and bulk purchasing, making it the most advanced tool for NFT traders to date.
Since mid-last year, Blur has been spreading in the NFT circle of whales, thanks to the powerful influence of angel investors and KOLs. They carried out a platform closed test, the rules are simple and invitation-only. They give users scores based on their past year of trading history on OpenSea, and users can also earn points by sending invitation codes to other users. The higher the score ranking, the higher the priority for testing eligibility. Since the market is dominated by big whales, these users with traffic can represent a large market share.
Blur was developed from the beginning for professional users, which means that Blur's various functions had a general direction during the closed test, and it did not need to spend more effort to win the favor of ordinary retail investors. On the contrary, platforms like OpenSea have a large number of users, but their trading volume is not much greater than Blur's. By choosing this path, Blur saved a lot of marketing resources, it didn't need to do retail marketing like Looksrare, x2y2, or gem to make them use the product. By allowing big whales to use Blur, these KOLs will indirectly promote Blur on Twitter, and its effect is very significant. If the product itself is of better quality than existing competitors, retail investors are also willing to give it a try.
For an aggregator, the aggregation function cannot make money. Once a decision is made to charge fees, many users may not be willing to use the platform, as they can obtain the NFT order information on the platform and bypass it to directly purchase on the market where the orders are placed. However, if the platform makes the information untransparent, there will be fewer users using it. So the aggregator must act as a volume hub and earn money through other products.
Like Gem and Genie, aggregators of this type eventually failed to find the source of income and were eventually acquired. OpenSea, in order to retain user traffic, will eventually integrate Gem into its own UI. Uniswap, on the other hand, achieved its grand plan of introducing defi users to purchase NFTs through Genie. From the above, it can be seen that a sole aggregator product is not feasible, and composability must come into play.
Blur naturally thought of the marketplace. While ensuring that users get the best NFT quotes on chain, it allows users to place orders and make bids on the same platform. This cannot be done on other platforms, so Blur will earn profit from buying and selling while users use the aggregation function. This makes Looksrare and x2y2 jealous, to the point that they are also developing their own aggregation solutions, x2y2 is about to release Pro, and Looksrare is developing an aggregation tool based on Reservoir.
Although Blur's API is in development, the speed of development is quite slow, making it impossible for the outside world to access the liquidity of Blur's own market, temporarily creating a system that only goes in and not out. That is, Blur can aggregate external liquidity, but other aggregators cannot aggregate Blur. However, due to Blur's large market share, people have started to feel dissatisfied with its monopoly in the aggregation market.
How can an aggregator make the volume of its own marketplace even surpass OpenSea? Token rewards and product operations come second, and the most important thing is optional royalties. Because of the issue of optional royalties, OpenSea and Blur are fighting.
When Blur was launched, the most notable thing was optional royalties. Of course, it wasn't the first to do so. As early as the end of August 2022, x2y2 was the first to announce that they support optional royalties. This has led to many questions because most of the NFT projects’ ongoing revenue is from secondary market royalties. Many people think that this is not good for the entire NFT ecosystem, but this has become an opportunity for these second-tier marketplaces to expand.
NFT royalties are a fee that needs to be paid to the project team in the NFT transaction, set by the team itself (usually around 5%-10%). Based on the standard ERC-721 contract, the project team cannot forcibly collect royalties, and it is completely dependent on the implementation of the marketplaces. Because the high amount of royalties makes users unwilling to pay, many people prefer to choose these optional royalty markets to list NFTs. Since sellers will earn more profits in optional royalty markets than in mandatory royalty platforms, they are more willing to sell at a lower price in optional royalty markets, which pulls down the floor price of the marketplace. The price on mandatory royalty trading markets like OpenSea is often relatively higher, which reduces the buyer's incentive for purchasing on such platforms, and the volume begins to decrease.
Actually, shortly after Blur came out, x2y2 had already realized the potential threat of Blur, because Blur has zero transaction fees, while x2y2, which also has optional royalty, still has a 0.5% transaction fee. x2y2 once tried to counteract Blur by restricting API keys, and although the problem of buying x2y2 NFT on Blur was solved, one still can't list NFTs on x2y2 through Blur.
For OpenSea, the volume of transactions it lost is much greater than that of x2y2, to the extent that the trading volume is almost caught up by Blur. During the bear market crisis, OpenSea finally decided to make a move. At that time, it had two options: the first was to announce that it also became an optional royalty platform, and the second was to implement a new royalty enforcement program. However, due to public pressure and the fact that even the execution of the first one could not compete with Blur's low transaction fees, it had to choose the latter.
In November 2022, OpenSea released the "Operator Filter Registry," a blacklist that blocks the optional royalty markets in the contract code and requires all new projects after January to choose between optional royalties and mandatory royalties. If mandatory royalties are selected, they must use OpenSea's "Operator Filter Registry" code. The blocked trading markets, of course, consist Blur. The impact of this news is so great that some trading markets have to compromise, such as x2y2. Their marketing strategy is to get the traffic of long-tailed new projects, so if these new projects choose to implement OpenSea's blacklist code, they can't be traded on x2y2. When x2y2 enforced the royalties, it is then removed from the blacklist. The effect of this blacklist strategy is a little delayed. When everyone was still celebrating the ATH volume on Blur during the holidays, the storm is coming.
The long-awaited two major new NFT projects in 2023, Captainz of Memeland and Sewer Pass from Yuga Labs, broke the silence. Without exception, they adopted the OpenSea blacklist and kept Blur out. All the traffic was on OpenSea and x2y2, setting a new high, while Blur's traffic suddenly became third.
So Blur got stuck in a strange situation. Although the royalties of existing old projects could not be enforced, the volume of these old blue chips still remained on Blur. But over time, as more and more new projects emerged, Blur could not earn future fees from these projects, in other words, it could only live on old collections.
However, there is always a way out of trouble. Not long ago, these blacklisted projects could actually be listed on Blur! Why? It turned out that Blur used OpenSea's own underlying trading protocol Seaport to develop a new trading market. Since Seaport is OpenSea's own protocol and is not blacklisted. Although the problem has been solved, the new NFTs still need to pay royalties because Seaport enforces them. But this is already pretty good, as Blur still saves 2.5% on transaction fees, and the floor has started to appear on Blur. Although the advantage is no longer great, it is enough to make up a game.
What kind of method can a new platform use to attract users? As a Web3 native protocol, the method used by Blur is naturally an airdrop!
As long as users list an NFT on Blur for more than 14 days, they can claim an airdrop, the amount of which is determined by their previous trading data on OpenSea. However, the airdrop is not tokens but mysterious boxes, which can be opened during the final token launch to obtain tokens. In other words, it's a delayed launch, giving users some off-chain points. This has been criticized by many users, so the initially high trading volume for the first few days did not last long. However, there is no way around this, because the market was really bleak in Q4 2022, with the entire NFT market value down 80% from its peak. It's better to slow down the airdrop and divide it into several phases. So they did, dividing it into three phases.
The second airdrop was determined by the trading volume on Blur, which was released in November. However, due to analytical error and wash trading, the number of boxes released was not accurate and many large traders only received a very small number of boxes. This was not 10 times the amount of the first airdrop as previously promised. At the same time, users were informed that this was not the last airdrop, the third airdrop, and the true token launch would be in Q1 of 2023. This caused more criticism from the community and even some FUD at one point. Blur had to compromise and adjust the airdrop amount to around 10 times the amount of the first airdrop. This move brought even more questioning because dropping coins in this way made everyone realize that these airdrop boxes were not worth much money. Moreover, in the case of an unclear future tokenomics and the impact of a bear market, the first thing that people thought of was dumping the airdrop. Many people think this will trigger the next NFT bear market. However, this did not affect Blur's trading volume, instead, the rules of the third airdrop pushed Blur to its peak.
The reward for the third airdrop is based on the buy orders (bids) user placed on Blur. The more trading volume the project has, the closer the bid price and floor price are, and the more airdrop rewards will be rewarded. Therefore, many idle funds in the market start bidding on Blur in order to receive the airdrop, causing the bid-ask spread of some blue-chip projects to approach zero. The total amount of buy orders for most blue-chip projects even exceeds the sum of all buy order value. This has led to extreme liquidity for NFTs on Blur and increased trading volume, as trading is no longer just limited to simple buy listings, but also involves accepting bids.
February 14th will see the third wave of Blur's airdrop and the long-awaited token release. Due to the expected airdrop, the funding pool for the buy order (bids) already has a balance of nearly 25,000 ETH. This is actually a way to rent liquidity through pre-mining, but the clever part is that it does not reveal the actual amount of the airdrop, which creates speculations. After the airdrop, good tokenomics is necessary if Blur wants to maintain such level of liquidity.
The first marketplace to use token economics was Looksrare. They introduced NFT trade mining, and listing mining and even designed a system where the closer the price is to the floor price, the more rewards you get, to increase listing liquidity. However, rewarding trades will cause wash trading and ultimately not bring much growth to the platform (just equivalent to a continuous token offering). Blur understands this and is likely to reward orders mainly to attract organic trading volume and market share, especially for buy orders. Its low transaction fees and optional taxes are enough to attract traders to create sell orders (listings) on Blur, so it doesn't need too many rewards for sellers. Other marketplaces s do not have a mature buy-order incentive mechanism, making traders and whales more willing to place buy orders on Blur to earn incentives. In the NFT market, especially in bull markets, the number of listing acceptance is far greater than bid acceptance due to the low liquidity risk of NFTs. However, for a mature market, the buy and sell sides should be balanced. If there is a good incentive model, the potential for buy order volume has a lot of potential. Currently, from blur’s airdrop model, it can be assumed that the closer the bid is to the floor price (the lower the spread), the higher the reward for buy orders.
Let’s do some math. If Blur can maintain a daily flow of 10,000 ether, assuming that Blur will charge 0.4% in fees in the future (it will not charge a higher fee than x2y2 for competitive reasons). Assuming it takes half of his revenue 0.2% to maintain the Blur token to distribute rewards, then it can give a token reward equivalent to around 7,300 ether in a year. If it still maintains the current liquidity of 25,000 ether, the APY will be around 30%. Although the risk of market making is high, it seems that its liquidity will not decrease too much after the airdrop, after all, the volume has not reached the bull market yet, and it also depends on the token price. Let's wait and see how the token launch will turn out.
After the token launch, besides good token economics, Blur can also make improvements in its product to solidify its position as the leader in the NFT professional trading market.
For NFT professional traders, other than better and smoother UI/UX, they prefer a one-stop experience. Blur has already made it possible for traders to buy aggregated NFT orders, at the same time list and bid on NFTs on its own marketplace. However, this is far from enough for traders, and there is still a lot of room for improvement in the future. Here are a few ideas:
Traders need to know not only the current floor price of a project but also the change in the floor price, just like the candle stick chart seen on centralized exchanges. In addition, they must have an understanding of the positions of large holders in the market, which cannot be separated from the analysis charts. For example, some analyses similar to NFTGO can be suitable to put them on Blur.
Although Blur allows users to place buy orders on the platform, it does not aggregate all of the buy orders in the market. For example, it is not possible to know the bids on OpenSea thru Blur, and there is a risk of missing an arbitrage opportunity. Skillet is an NFT buy order aggregation platform that allows users to settle NFTs at a better price. Blur could also include this feature.
For professional traders, in addition to the bulk buying and selling capabilities, they need more advanced order placement capabilities, such as bonding curves like SudoSwap, orders with complex logic, or limit orders that can be executed automatically. These can be referred to as some features of Tensor on Solana.
With all that said, Blur has turned out to be a successful project so far. Its user experience is good, attracting most professional traders on the market to use it and form long-term trading habits. The way of increasing liquidity through airdrops has made its trading volume surpass OpenSea in a short period of time, becoming a dark horse. It will be a very important NFT trading market for a very long time in the future. If it can solve the royalty issue, implement good tokenomics, and improve product features, it will have a very promising future.
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