New NFT Upstart Has OpenSea Sweating A Little Bit

TL:DR

• NFTs (non-fungible tokens) are unique digital assets that have gained popularity as a new way of buying, selling and collecting digital art and other digital content.
• OpenSea and Blur are two of the leading marketplaces for buying and selling NFTs, but there are other competitors such as Nifty Gateway, SuperRare, and Rarible.
• These marketplaces offer different features and experiences, such as SuperRare’s exclusive membership program or Nifty Gateway’s focus on high-end collectibles.
• The NFT market has exploded in popularity and value in recent years, with high-profile sales and growing interest from investors and collectors.

Blur has exponential growth

The world of non-fungible tokens (NFTs) has experienced exponential growth over the past week, with Ethereum NFT trading volumes doubling. According to DappRadar, upstart NFT marketplace, Blur, has overtaken OpenSea as the leading NFT marketplace. Over the past seven days, Blur’s Ethereum NFT trading volumes have reached $460 million, while OpenSea recorded $107 million.

This reflects a 361% increase in Blur’s trading volume and a 12% increase in OpenSea’s. The surge in trading volumes coincided with Blur’s distribution of its governance token, BLUR, to NFT traders who had earned rewards through the marketplace, as well as trading on other platforms. The surge in trading activity on Blur is attributed to the unique model of the marketplace, which incentivizes traders with token rewards for using bidding pools to enable bulk NFT trading.

The BLUR token has a market cap of $466 million, at its current price of $1.20 per token. NFT collectors are using their airdropped funds to buy and sell NFTs on Blur, which is reflected in the market data. However, the surge in trading activity on Blur is not due to traders selling their BLUR tokens and buying high-value NFTs. Instead, whale traders with significant NFT holdings are flipping NFTs with greater frequency than before, aiming to boost future token reward allocations.

NFT projects by size

The largest NFT project, in terms of market-wide trading volume over the past week, is Otherside, Yuga Labs’ upcoming metaverse game. The NFT land plots generated $63 million in trades during the week, marking a 318% week-over-week increase. The wallet of MachiBigBrother, a well-known pseudonymous NFT trader, was the largest seller during the period.

This trader was involved in nearly 1,300 Otherside NFT trades, resulting in sales worth $4.3 million. A constant flow of inbound and outbound trades was observed. The reason for the high level of trading activity is the unique marketplace model of Blur, which incentivizes heavy activity with token rewards and rewards traders for using bidding pools that enable bulk trading for NFTs.

Blur-red Vision

Blur is teasing its next “Season 2” token airdrop and has stated that traders who “bid on top collections closer to the floor get more rewards.” Therefore, traders that put in a bid close to the floor price of a popular project can maximize their rewards. They are buying and selling in bulk as a result.

Blur Bidding Pools have reached a new ATH of $132.65M TVL, or, around 2.4x Aptos TVL and 0.5x Solana TVL.

Blur also became the #1 protocol on Ethereum by gas usage as well, surpassing both Uniswap and Seaport.

🚨TURN NOTIFICATIONS ON🚨 for details about Season 2, coming soon! https://t.co/89DONJ6K8z pic.twitter.com/GCqGHDQBcq

— Blur (@blur_io) February 20, 2023

The NFT-meets-DeFi approach is not entirely new. Liquidity pools have been adopted by Sudoswap and Hadeswap, among others, rather than traditional marketplace listings, while BendDAO uses a similar format for NFT-based loans. Other NFT-based loan protocols have also grown in recent months.

The model adopted by Blur incentivizes traders to treat NFTs like DeFi tokens, flipping them frequently and attempting to maximize every potential benefit through liquidity mining. Some traders have even posted guides on how best to mine Blur’s token rewards without making potentially costly mistakes in the process.

OpenSea, one of the oldest and most prominent NFT marketplaces, has responded to the rising competition from Blur by temporarily eliminating its 2.5% fee on sales and reducing creator royalty protections. This move is aimed at attracting users and retaining creators. OpenSea has recognized the importance of such measures in the face of the evolving marketplace and the battle for royalties.

Many places to shop

Other NFT marketplaces are also vying for market dominance, such as Nifty Gateway, SuperRare, and Rarible. These marketplaces offer unique features and experiences that distinguish them from OpenSea and Blur. For example, SuperRare has an exclusive membership program, while Nifty Gateway focuses on high-end digital art and has collaborated with high-profile artists and brands like Grimes, Justin Roiland, and TIME magazine.”

Additionally, Rarible has a more decentralized approach to NFT trading and allows anyone to create, buy, and sell NFTs without restrictions. They also have a unique governance model that allows community members to vote on platform decisions.

As the NFT market continues to evolve and mature, it’s likely that we’ll see new players and innovations emerge. It will be interesting to see how these marketplaces adapt and differentiate themselves to capture market share and satisfy the needs of both creators and collectors.