Analyzing the new player in the NFT space, Blur: Can it break OpenSea's monopoly?

Author: Maverick, Colin Wu

After raising over $14 million in funding from multiple institutions including Paradigm, the NFT trading market Blur, which claims to "serve professional traders," has recently been in the spotlight. According to NFTScan data, as of December 16, Blur's NFT trading volume in the past month ranks second only to Opensea, accounting for approximately 29% of the entire NFT market share (as shown in the figure below), making it the largest NFT aggregation trading market by on-chain trading volume, putting unprecedented pressure on OpenSea.

As a clear airdrop, the official statement previously indicated that the BLUR Token will be launched next year, but this still depends on the unclear total supply, token distribution, and other tokenomics. The "wool party" is actually in a passive state with the risk of being "pulled back," but this has not dampened their enthusiasm. This enthusiasm may be related to the airdrop FOMO wave caused by the wealth effect of OP and APTOS, as well as the background of the NFT market's "unicorn" OpenSea delaying its token release. "As long as there is a trading record in NFT trading markets like Opensea, LooksRare, and X2Y2 in the first six months, there is a chance to receive the first phase airdrop of BLUR," has attracted the attention of the wool party as a consolation prize and a new promotional form of airdrop "opening blind boxes." However, in subsequent airdrop promotions, Blur has twice brought up the phrase "next round is bigger" to PUA the community. Nevertheless, the expectation of the ongoing third round of airdrop distribution, along with the official promotion on Twitter stating that "the third round is the largest reward scale," has still driven a surge in Blur's user numbers, especially as whales almost monopolized the leaderboard, briefly boosting the trading volume and floor prices of various blue-chip NFT projects like BAYC and Azuki.

Blur Attracts Traders with "Custom Royalties + Zero Fees + Airdrop Expectations" Model

Royalties have always been a sensitive topic in the NFT trading market, as "traders want to maximize profits, collectors want to support creators, and creators want to earn more royalty income." Since royalties cannot be enforced across multiple markets, different platforms have different royalty settings, with Blur defaulting to the highest royalties among OpenSea, LooksRare, and X2Y2. When traders list on Blur, they can customize their listing royalties. However, the previous zero royalties from SudoSwap and customizable royalties from X2Y2 have already sparked significant debate in the market, with the belief that customizable or zero royalties cause project teams to lose some funding for sustainable development. Therefore, Blur hopes to encourage traders to use royalties through airdrop incentive expectations. In the second round of airdrops, users with higher royalty settings on Blur will receive greater loyalty and thus more airdrops, while users migrating from zero-royalty platforms like Sudoswap can set their royalties on Blur to match Sudoswap's platform fee (0.5%) to achieve the same profit and receive larger airdrops than other methods. However, according to data from Proof's research director NFTstatistics.eth, this expectation has not actually prevented low or even zero royalty behaviors, with Blur's overall average royalty rate being only 0.65% (as shown in the figure below), which has also driven a decline in overall NFT market royalties (as shown in the figure below).

Blur does not charge users fees like the three giants OpenSea, LooksRare, and X2Y2. Traders can use Blur's aggregator, trading market, and other functions without any cost. Under the premise of customizable royalties, traders can directly obtain full income, but currently, zero fees should be seen as a strategy to attract new users in the short term.

Blur's Profit Model is Uncertain, Currently Supported by Funding

As for how long the "custom royalties, zero fees" model will last, Blur's official statement indicates that they will wait until the token is launched to vote on specific royalty and fee proposals through community governance, and until then, Blur will not earn a penny. Regardless of the final proposal, it is foreseeable that Blur will ultimately fall into the "involution" struggle over royalties and fees that the NFT trading market generally encounters. On the other hand, without a profit model and revenue distribution, the value of the BLUR Token is effectively zero; if it exists merely as a governance token, it not only does not align with the positioning of platform tokens but also faces the possibility of being imitated and defeated by later entrants.

Matching the Experience of Professional Trading, but Cannot Become a Moat

In terms of user experience, the official claims that Blur is 10 times faster than the aggregator Gem acquired by OpenSea. In actual experience, while Blur operates quickly and smoothly, bulk purchases require more gas fees compared to other trading markets. For example, the gas fees consumed for purchasing one NFT and for bulk purchasing multiple NFTs are equivalent on Element, while on Blur, the more NFTs purchased in bulk, the greater the gas consumed, which may also explain why bulk purchases on Blur almost never fail.

In terms of UI/UX, Blur also matches the habits of professional traders. For example, on the Blur homepage, in addition to displaying price, listing time, and last sale price for BAYC, it also directly shows the rarity of different NFTs, allowing users to browse by rarity level (1%, 10%, 25%) or price range. The right side of the screen displays real-time sales and listing time information for NFTs, while the bottom right shows the price depth range for that project's NFTs. When clicking on a specific NFT, Blur displays the specific features of that NFT and shows the last sale time, floor price, and trading volume ratio for each feature, allowing traders to judge the rarity of that NFT themselves.

Blur provides traders with professional tools, good UI/UX, and other auxiliary functions, but it should be recognized that these auxiliary tools are not monopolistic and are highly imitable. Until now, Blur still does not have a sufficiently deep "moat" to ensure that it will not be defeated by subsequent challengers. Under the first-mover advantage of OpenSea, a strong brand effect has already formed sufficient user stickiness, and ordinary users, when using NFT trading markets, primarily consider trading depth and liquidity, as well as whether the trading costs are low enough, while the consideration of whether the platform's functions are user-friendly is secondary to these two factors.

Overall, the main reason Blur has attracted market attention is the medium-term airdrop expectations, and whether it can form long-term user stickiness remains to be seen, especially after the airdrop is realized, which will be the true test.

Reference Article:

https://mirror.xyz/blurdao.eth/2nba-2j0zHPrBX0iPSNGquZ9s_WotNH6B4e5usz85mM