OpenSea's fees have been reduced to zero in a bid to counter the marketplace upstart.
It's a time-honored tenet of business - slash prices and the customers will come.
Tell that to OpenSea.
One week after the NFT marketplace scrapped the fees it collects on trades, Blur, its upstart rival, hasn't missed a beat. The four-month-old NFT marketplace has seized a staggering 82% market share of the trading volume on Ethereum over the past week, according to a Dune Analytics dashboard created by hildobby, the pseudonymous researcher.
Blur cranked into overdrive after the developer airdropped 12% of its BLUR tokens to NFT traders on February 14th. It has accounted for more than 70% of daily NFT trading volume on Ethereum for every single day since the airdrop, prompting OpenSea to reduce fees. Blur was launched with zero-fee trading, which other marketplaces such as SudoSwap also do.
Hildobby, who runs dashboards on the data site Dune, told The Defiant that they see a few primary trends at work. In the near future, the Blur has teased the release of a new airdrop totalling another 10% of the supply.
The market place on Twitter said that the easiest way to maximize the airdrop is through 'loyalty', which can be proved if users list their NFTs for sale only on Blur.
But Blur's strategy is not certain to be sustainable, making it difficult for some people to believe that it will be sustainable. Kofi Kufuor, a contributor to the DeFi Llama and former partner at 1confirmation, a venture firm, asserted that 53% of the volume on Blur comes from 500 wallets on Twitter.
Some may be professional traders or potentially also users who are looking to maximize their airdrops, or some combination of the two. Wash trading certainly is not unheard of in the NFT space - a study by Hildobby approximated that half of the NFT volume in 2022 was wash trading.
Pacman, a former pseudonymous co-founder of The Block, revealed himself on Twitter on February 21 and used his legal name, Tieshun Roquerre, in an interview with The Block.
The two marketplaces have seen moves and counter moves from on the implementation of royalties paid out to NFT creators.
On February 17 it wasn't OpenSea's only major shift on that day - the marketplace also dropped enforced royalties to 0.5%.
Kufuor conceded that the incentives are clearly on Blur's side.