The past week has seen over $500 million worth of Ethereum NFT trades as Blur’s rewards model catapults it over OpenSea.
Following two straight months of sales growth, NFT trading has advanced significantly over the past week, as the volume of Ethereum NFTs has more than doubled. Due to a changing market, upstart marketplace Blur has surpassed market leader OpenSea, and traders are swiftly trading valuable NFTs as if they were DeFi tokens.
Blur has generated $460 million worth of Ethereum NFT trades over the past week, a 361% increase over the previous seven-day, according to DappRadar data.
During the same time period, OpenSea’s trading volume went up by 12%, to $107 million. The third-place market, X2Y2, had just over $11 million worth of trades during that time.
Overall, CryptoSlam says that the number of Ethereum NFT trades went up 155% from last week to this week. The increase in volume happened during the week that Blur airdropped its BLUR governance token to NFT traders who earned rewards through the marketplace and by trading elsewhere before Blur’s own launch last fall.
At its current price of $1.20 per token, the BLUR token has a market valuation of $466 million, and it appears that at least some NFT collectors re-invested their airdropped funds in purchasing NFTs. According to market data, they largely use Blur to buy and trade NFTs.
Blur’s surge in trading volume is driven by whale traders flipping NFTs to boost potential token reward allocations. The largest seller is MachiBigBrother, who was involved in 1,300 Otherside NFT trades yielding $4.3 million. This is facilitated by Blur’s unique marketplace model, which incentivizes heavy activity with token rewards.
It’s made possible by Blur’s unique marketplace model, which not only encourages a lot of activity by promising token rewards, but also rewards traders for using bidding pools that make it easier to trade NFTs in bulk.
Blur is teasing its next “Season 2” token airdrop by saying that traders who “bid on top collections closer to the floor get more rewards.” In other words, traders who bid close to the floor price, which is the cheapest NFT available for a certain project, will get the most out of the project in the long run. Because of this, they both buy and sell in huge volumes.
That’s why projects like Otherside, the Mutant Ape Yacht Club, and Moonbirds are all doing well this week, and why many of the NFTs in those projects are changing hands over and over again. MachiBigBrother, the aforementioned whale trader, currently sits at the top of Blur’s Season 2 leaderboard for trading rewards.
OpenSea, formerly the market leader in terms of trading volume, has been overtaken by Blur’s trading frenzy. As a result, OpenSea announced that it has temporarily reduced its own 2.5% marketplace fee, and will reduce some creator royalty enforcement protections. In an effort to remain competitive with Blur, OpenSea is effectively becoming “zero fee,” forgoing the fees that generate its primary source of revenue as well as the fees that finance the majority of NFT initiatives.
When OpenSea publicly discussed modifying its creator royalties scheme last fall, numerous NFT artists and creators have vocally pushed back against the move. But Blur, which doesn’t fully pay creator royalties across projects, seems to have forced OpenSea’s hand last week as the longtime leader tries to adjust to a new normal.
OpenSea has a larger number of unique wallets than Blur, but the surging trading volume from the past week suggests it is mostly whales trading among themselves.
“We aren’t growing the pie,” tweeted Web3 project founder Naveen Jain. “It’s the same folks circulating assets and ETH around and around.”
That seems to be true, but the market still has to deal with the changing tides. Blur and OpenSea are fighting for market share, and project creators are seeing their revenue streams dry up as platforms focus more on NFT flippers and professional traders.
Content Source: decrypt.com
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