The Rise of Blur: How it Beat OpenSea and became the #1 NFT Marketplace
Blur has become the NFT marketplace with not only highest trading volume, but also the highest user count, surpassing OpenSea’s long reign as the undisputed king of NFT marketplaces.
In this piece, we will aim to examine Blur, including their background, accomplishments, and impact on the NFT marketplace ecosystem.
What is Blur?
Blur is an NFT marketplace and aggregator on Ethereum that started its service on October 19, 2022 by a team led by 24 year old @PacmanBlur (Tieshun Roquerre). Unlike other NFT marketplaces, Blur’s primary focus is on serving professional NFT traders instead of retail users.
As a marketplace and aggregator catering specifically to professional traders, Blur offers sophisticated services that include:
- Floor Sweeping: Traders can easily sweep the floors of multiple NFT projects by using Blur with a simple transaction.
- Bulk Buying: Traders can buy NFTs cost-effectively and quickly by not having to purchase one NFT at a time and saving on gas fees.
- Aggregate Buying: Traders can not only view NFTs listed on other marketplaces, but also place orders directly through Blur to purchase NFTs across several different NFT marketplaces
- User Portfolio: Blur’s user portfolio page provides traders with information such as the floor price of the NFT collection, the current evaluation of their portfolio, and the number of their owned NFTs listed for sale.
- Zero trading fees: Currently, Blur does not charge any transaction fees for users on the platform.
- Optional creator royalties: Traders are required to pay a minimum creator royalty of only 0.5%, and it is optional to pay more royalties.
- Earn BLUR token: Users can earn Blur token, the platform’s native token, by trading on the platform or providing liquidity.
As we can see, Blur’s features are specifically tailored to the needs of professional NFT traders. However, let’s focus more on two of its services, namely, the optional creator royalties (number 6) and Blur token (number 7) below.
Creator Royalties Debate
Before the emergence of other NFT marketplaces, OpenSea was the dominant platform where creator royalties were mandatory and set by the creators themselves. This led to a surge of creators joining the NFT space as they were promised royalties on all secondary sales made on OpenSea.
However, it’s worth noting that creator royalties are not a feature enforced in the Ethereum protocol and were only implemented by OpenSea. As newer players entered the NFT marketplace ecosystem, some chose to reduce creator royalties to lower trading fees and attract new buyers and sellers to their platform.
This sparked a heated debate within the NFT community about creator royalties and their enforcement. This debate ultimately led to a major conflict between OpenSea and Blur.
All-out Creator Royalty War: OpenSea vs Blur
OpenSea, which advocated for mandatory creator royalties set by the creator, began enforcing its policy on smart contracts created after January 2, 2023, by releasing a royalty enforcement tool. This prevented NFTs from being listed and sold on marketplaces that offered optional royalties, or the NFTs would be automatically set to “optional royalties” by OpenSea.
While many marketplaces complied with OpenSea’s policy, Blur did not. Instead, Blur responded with two major actions.
Firstly, Blur implemented full royalties for NFT collections that blocked trading on OpenSea, arguing that creators should not have to choose which secondary market their NFT owners can buy and sell on a blog post.
Secondly, Blur discovered a loophole in OpenSea’s royalty enforcement blocklist by launching its marketplace using Seaport protocol, a web3 marketplace protocol released by OpenSea in May 2022. Since Seaport was not included in the royalty enforcement blocklist, NFTs that blocked optional-royalty marketplaces could still be listed and sold on Blur, even if the creator blacklisted them as optional.
This caused OpenSea to reverse its policy of enforcing full creator royalties and offer optional royalties with 0% trading fees for a limited time, which they announced through a tweet.
BLUR Token
As the Creator Royalty feud between Blur and OpenSea raged on, Blur launched its highly anticipated BLUR token through an airdrop to incentivize users to trade on their platform on February 14th, 2023.
With a claimed total supply of 3 billion BLUR, the first phase of the airdrop released 360 million tokens amounting to 12% of total supply, awarding BLUR users for their loyalty to the platform.
While the launch of BLUR has undoubtedly helped increase the platform’s market share, it has also raised questions about the token and its release.
Does BLUR token incentivize wash trading?
One of the largest receivers of the first airdrop of BLUR, @MachiBigBrother (Jeffrey Hwang), received 1.8 million BLUR tokens on Feb. 14th and sold all of them for $1.3 million.
On Feb. 25th, Machi dumped 1,010 tokens, including 90 Bored Ape Yacht Club (BAYC) NFTs, 191 Mutant Ape Yacht Club (MAYC) NFTs, and 308 Otherdeed NFTs, for 11,680 Ether, then quickly bought 991 NFTs.
Such a trade makes Machi eligible to earn more BLUR tokens in the second round of airdrops and may incentivize other NFT whales to do the same.
What is BLUR token’s utility?
At present, the BLUR token serves as a governance token for the platform. The Blur DAO will oversee critical aspects of the protocol, including the protocol’s value accrual and distribution, such as setting the protocol fee rate (up to 2.5%) after 180 days and awarding treasury grants to aid the marketplace’s future growth.
However, since Blur is a centralized company, it needs to relinquish control of the platform to the BLUR DAO token holders to confer genuine utility to BLUR.
Final thoughts
In this piece, it’s evident that Blur has accomplished what many thought was impossible. Marketplaces are notoriously difficult to break into due to the stickiness of network effects, making it challenging for new players to outperform established industry players.
Blur achieved its leading position in the NFT marketplace by identifying a user base that was underserved, namely professional NFT traders, challenging the common practice of creator royalties, creating a user-centric product, and cleverly circumventing an embargo. As a result, their success rightfully deserves congratulations and recognition.
Furthermore, Blur’s progress provides insight into the evolving NFT landscape. NFTs initially catered to creators and retail traders, but they have now become a market for professional traders. Creator royalties were initially enforced to entice creators to list their collections on NFT platforms like OpenSea, but now the primary objective for the success of an NFT marketplace is on creating the best product for traders.
This shift suggests that the NFT industry is maturing rapidly, and it’s fascinating to observe how the landscape has changed so quickly. In conclusion, Blur demonstrated that the blockchain ecosystem still offers numerous opportunities, and those who adapt and innovate can win the David versus Goliath battle and make history.
I would love to hear your thoughts on these turn of events and let me know what blockchain topic you want to learn more about. Stay well.
