Is Blur Killing NFTs?
A few perspectives
Blur is a controversial NFT marketplace that launched in October 2022. They’ve rewarded loyal and high-volume users with $BLUR governance token airdrops.
To earn more points/tokens, Blur “farmers” bid on popular NFT collections near the floor, buy the NFTs, sell to the highest bidder, and repeat.
Many blame the latest nosedive in NFT floor prices at least partly on Blur and the airdrop farmers it enables through its bidding feature.
But is Blur really to blame for the brutal NFT market? Here are a few perspectives.
BLUR ANNOUNCES 2X POINT EXTENSION
Yesterday, Blur announced that it is “working on something new” so its Season 2 double bidding and listing points will continue through May 1 (instead of April 1). 👀 That’s another month for farmers to earn $$$ by bidding and listing (the comments on the tweet were… not good).
While Blur gained market share with their Season 1 bidding and listing points (and optional royalties…), Season 2 got savage. If users give 100% listing loyalty to Blur, the airdrop rewards will be much higher. This moved NFT volume swiftly from OpenSea; Blur now has 62% volume share.
Whales like Franklin and MachiBigBrother have lost many thousands of net ETH in trades farming Blur, hoping that the Season 2 $BLUR airdrop will be worth it. After the first airdrop, $BLUR reached around $1.35, but is now around $0.50.
A NEW ERA OF LIQUIDITY?
There was a pretty iconic event in February when two well-known collectors OSF and Mando dumped 71 Bored Ape Yacht Club NFTs into the Blur bid pool, getting back $9.15 million. Rather than this crashing the floor of the collection, it only moved it down 2 ETH, due to the massive number of bids out there for apes.
Many in the space thought this marked an evolution in liquidity and market-making for NFTs. While the feat was impressive, the question remains: how long will the liquidity train run?
When whales pull their bids, stop adding more ETH, or no longer want the $BLUR token, what happens to the floors on the Blur marketplace of top and mid-tier collections? This is one argument many are making— that the NFT market is now artifically propped up by a handful of whales.
JACK BUTCHER POLLS HIS COMMUNITY
NFT communities have the option to turn off bids for Blur with their collections. Yesterday, after hearing some complaints from holders of Checks VV and Openpen Editions, artist Jack Butcher decided to ask his community to vote if they want bids on or off.
These collections are popular, but have seen floor prices decline significantly in the past few days.
If Blur bids are turned off, volume will suffer as a result, including the minimum royalty enabled on Blur. But long-term, it may protect NFT values and keep the unique holders % high.
Should it be up to NFT communities if they want bids enabled on Blur?
PFP FLOORS FALLING
When Blur’s bidding feature was introduced in December 2022, the market was extremely excited at the new liquidity that came about overnight. Floors temporarily pumped.
But many found out that airdrop farming $BLUR is best left to those with a lot of time and liquidity. With the churn of NFT farming volume every day, floor prices get undercut with tons of NFT bids— which can negatively affect floors.
Since March 1, NFT (especially PFP NFT) prices have taken a horrifying nosedive. But let’s not forget everything else that’s been going on: 😵💫
The SEC has put Coinbase on notice
The CFTC is suing Binance
SVB collapse and scary USDC times
The US is on the brink of a recession
With the complicated macro and regulatory situation at the moment, it’s difficult to conclude that Blur marketplace alone is to blame for NFT floor prices declining. But it may be fair to say that it has exacerbated it.
IS BLUR JUST EXPOSING THE MARKET FOR WHAT IT IS?
One major counterargument for those who blame Blur for low floor prices: Blur is just accelerating the inevitable.
We are a few years removed from the big bull market of 2021, and things have changed. Many of the mid-tier communities that popped up back then are suffering, and not all will survive. We heard Gary Vee say that 99% of NFTs are going to zero eventually.
So if Blur is pushing out communities who can’t survive the airdrop farming, maybe it’s just survival of the fittest. Seems brutal, but there could be some truth to it.
How long will $BLUR continue to be in demand and what are they planning for May 1?
OpenSea (with no token rewards) continues to have more unique users than Blur, but that gap is getting smaller. OpenSea has already capitulated and reversed its stance on royalty enforcement, but what’s the next domino to fall?
When a few major whales seemingly control NFT floor prices using Blur, it’s challenging for NFT communities to remain optimistic and invite new users in.
Rarity is dead; long live the floor.
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