As the prices of notable NFTs like Bored Ape Yacht Club hit a two-year low, traders have started to question who might be responsible for the downturn. A significant number of fingers are pointing at Blur, the marketplace that became the dominant Ethereum NFT trading platform by volume in February, displacing OpenSea.
The Controversy Surrounding Blur and NFT Trading
Blur emerged in October last year, promoting itself as the go-to platform for professional NFT traders. It offered a tempting token airdrop as an incentive for choosing its platform over competitors like OpenSea. As a result, when the BLUR token was introduced in February, Blur immediately surpassed OpenSea in trading volume.
However, this model didn’t sit well with everyone. Traders began quickly flipping NFTs, looking to yield rewards, while treating Bored Apes and Otherside land plots like fungible tokens. This behavior led to a surge in trading volume on Blur, pushing the February market-wide tally over $2 billion. Some have criticized this approach as “wash trading,” including data platform CryptoSlam.
But this surge was short-lived. The overall market trading volume has dropped considerably in recent months, with experienced traders who initially profited from the reward model now losing money or withdrawing their funds from Blur’s NFT bidding pool.
The Twitter Conversation
Over the past few days, several Crypto Twitter influencers have been highlighting what they believe to be negative consequences of Blur’s strategy. Trevor Owens, a partner at the Bitcoin Frontier Fund, suggested that Blur’s tactics of lowering the price floor were harmful to the market.
Similarly, NFT influencer Xero pointed out that Blur’s incentives encouraged risky behavior as traders overextended themselves to flip NFTs.
Backing these observations, Mihai, a crypto and NFT trader, identified problems with the Blur model and its impact on the broader NFT market. He suggested that Blur was harming NFT prices and potentially threatening the platform’s long-term sustainability.
The Founder’s Perspective
Blur’s founder, Tieshun “Pacman” Roquerre, disagreed with these critiques. He pointed out that some floor prices have risen while others have decreased since Blur’s launch. He also cited the recent controversial launch of the Azuki Elementals collection, which drew liquidity away from the NFT market.
Pacman showed no intention of altering Blur’s model in response to the criticism. Instead, the platform has launched a new version of its protocol, featuring a new type of NFT bidding, additional rewards, and lower transaction fees.
This move, however, was met with backlash. One Bored Ape owner accused Pacman of being delusional and claimed that the platform was undermining market confidence.
In contrast, some, like Rohun “Frank” Vora, founder of DeGods, supported Pacman’s position. Frank suggested that traders are merely voting with their dollars, believing the BLUR airdrop to be more valuable than holding the NFTs.