Blur Overtakes OpenSea as Ethereum NFT Trading Soars

Following two consecutive months sales growth, NFT trading has accelerated rapidly over the past week as Ethereum NFT volume more than doubled during this period. This is due to a changing market in which upstart market Blur has leader exceeded OpenSeawith traders quickly flipping valuable NFTs as if they were Challenge tokens.

According data from DappRadar, Blur generated $460 million in Ethereum NFT transactions in the past seven days, a 361% increase from the prior period. OpenSea, meanwhile, saw a 12% increase in trading volume to $107 million during this period. The third market, X2Y2, barely totaled $11 million in transactions at that time.

Overall, CryptoSlam indicates a 155% week-over-week increase in Ethereum NFT trading volume. The increase in volume comes during a week in which Blur airdropped its BLUR governance token to NFT traders who earned rewards in the market, and also by trading elsewhere before Blur launched last fall.

The BLUR token has a market capitalization of $466 million, at its current price of $1.20 per token, and it looks like at least some NFT collectors have reinvested their dumped funds into buying NFTs. And they mainly 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 due to traders simply selling their BLUR tokens and buying and holding high-value NFTs. Instead, whale traders holding large NFT holdings appear to be flipping NFTs with even greater frequency than before, in an effort to increase potential future allocations of token rewards.

For example, the largest (market-wide) NFT project of the past week by transaction volume is Otherside, Yuga Labs’ upcoming metaverse game. NFT plots generated some $63 million in transactions last week, per CryptoSlam, marking a 318% week-over-week increase.

The biggest seller during this period is the portfolio of MachiBigBrothera well-known pseudonymous NFT trader, who was involved in nearly 1,300 Otherside NFT transactions generating $4.3 million in sales in the process. A glance his business activity shows a steady flow of incoming and outgoing transactions, and this is just one example among many.

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

Blur teases its upcoming “Season 2” token drop, and specifically notes that merchants who “bid on the best collections closer to the ground get more rewards.” In other words, traders who place a bid close to the floor price– i.e. the cheapest available NFT for a certain project – of a popular project will maximize their eventual rewards. As a result, they buy and sell in bulk.

This is why projects like Otherside, the Mutant Monkey Yacht ClubAnd Lunar birds are all flying this week, and why many NFTs from these projects trade hands again and again. And MachiBigBrother, the aforementioned whaler, currently sits atop Blur’s Season 2 leaderboard for business rewards.

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

The NFT-meets-DeFi approach is not entirely new. We’ve seen DeFi-like implementations for NFTs in recent months, like Sudoswap and Hadeswap adopting liquidity pools over traditional market listings, more BendAO using this type of format for NFT-based loans. Other NFT-based lending protocols have increased in recent months and flourishes.

Last August, amid earlier debates over NFT rollover and creator royalties, Crypto Twitter personality Cobie tweeted that NFTs are “altcoins with pictures”. It was a controversial take then, but Blur’s DeFi-like approach to NFT trading has executed this concept on a scale never seen before – and the impact has been profound.

OpenSea, long the market leader in terms of trading volume, has been overshadowed by the trading frenzy of Blur and, consequently, OpenSea announced Friday that it has temporarily reduced its own marketplace fee by 2.5%; and that it will reduce certain creator royalty enforcement protections. This means that OpenSea, in an effort to stay competitive with Blur, is effectively moving to “zero fees”, waiving the fees that generate its own primary source of revenue as well as the fees that fund most NFT projects.

Like when OpenSea publicly considered changing its royalty model for creators last fall, many NFT artists and creators vocally pushed back against the movement. But Blur, which doesn’t fully respect creator royalties on projects, it seems forced OpenSea’s hand last week as the longtime frontman tries to adjust to a new normal.

OpenSea still serves more unique wallets than Blur – around 106,000 for OpenSea in the past week, including around 66,000 for Blur. But Blur has taken the lead in terms of the number of transactions, as well as the widening gap in transaction volume.

Like more exaggerated examples of fictitious trading, the flood of NFT rollovers and “farming” rewards on Blur is muddling market data – and last week’s surge in trading volume does not suggest that the market NFT is growing and integrating dozens of new collectors. It is mostly whales that trade with each other.

“We don’t make the cake bigger” tweeted Naveen Jain, founder of the Web3 project. “These are the same people who move assets and ETH around and around.”

That’s apparently true, but the entire market is still forced to fight the changing tides – from Blur and OpenSea battling for market share, to project creators who see their revenue streams dry up as platforms dwindle. are aimed more at NFT pinball machines and professional traders.

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