Despite its recent success, Blur’s journey to becoming the largest NFT marketplace is far from over, and evaluating its current and future success is a complex matter.
NFT marketplaces are currently embroiled in fierce competition for customers, with companies reducing their fees and royalties to attract and retain users. This competition has resulted in the gradual waning of royalty fees, an important revenue source for many NFT creators who feel abandoned by the markets that once supported them. This “race to the bottom” is causing significant disruption to the entire NFT ecosystem.
Read more: Why we need more NFT royalties and a better market
Is Blur’s volume real?
Blur has overtaken OpenSea in the overall value of sales made through its platform, but the data has sparked debate about its true significance.
One factor contributing to Blur’s success is its rewards program, which rewards traders for listing and bidding on NFTs. These points can be exchanged for BLUR tokens, with the number of tokens received depending on the number of points accumulated.
Since there are no marketplace fees or royalties, the only barrier preventing users from gaming the system and earning tokens by purchasing their listings with a separate wallet is the need to pay gas fees.
However, last month, CryptoSlam, a tracker of NFT sales data, claimed that this is exactly what was happening on Blur. In an email to its customers, CryptoSlam said that only 1% of high-value traders were responsible for a large amount of trading activity on the platform.
As a result, CryptoSlam took action and removed hundreds of millions of dollars in blur trades from its data, citing “market manipulation”. It has since implemented an updated algorithm that filters out “suspicious” sales.
During the period from February 14 to February 25, CryptoSlam identified over $577 million in wash-traded NFTs on the platform.
According to CryptoSlam, sales data from Blur is “misrepresenting” the NFT market. A potentially artificial boost in sales has pushed the industry’s total sales volume to its highest level since January 2022, leading some to believe the market is about to rebound after a significant decline in activity last year Had been.
“What we are finding is that this is artificially inflating the sales volume for the entire NFT market in a very fraudulent way,” Scott Hawkins, data engineer at CryptoSlam, said in an interview with Forecast.
Furthermore, OpenSea still has more users than Blur, with a user base that includes a smaller group of more active traders. Blur has only 113,886 users over the last 30 days, compared to OpenSea’s 294,146. Critics also claim that a small percentage of wallets on Blur are responsible for most transactions.
future of stigma
The specifics of how the BLUR token will be valued in the future are unclear, and it is uncertain how it will gain value over time. Currently, BLUR serves as a governance token, but since BLUR is a centralized entity, it will need to gradually hand over control to token holders of newly established DAOs. This could be the reason why US users were left out of the airdrop despite the coin being available on major US exchanges like Coinbase.
Blur DAO will be responsible for controlling critical aspects of the platform, such as setting up the protocol’s value storage and distribution. This could include setting a protocol fee rate (up to 2.5%) after 180 days and providing Treasury grants to further develop the market. These choices will play an important role in shaping the future development of the platform and determining whether Blur can effectively compete in the market now and in the immediate future.
