The NFT Exchange Wars: Blur vs OpenSea
With crypto market variabilities combined with a new business model from Blur, Opensea has for the first time ever lost its dominance.
Since the creation of NFTs, there has been one marketplace that has dominated all others: OpenSea.
Valued at more than $13 billion in its last funding round in January 2022, it seemed like the future for NFT exchanges was going to be a competition for second place as first was already decided.
But that dominance now has its first legitimate challenger. With crypto market variabilities combined with a new business model, Opensea has for the first time ever lost its dominance.
The challenger is a new NFT marketplace named Blur, which is now doing more trading volume than OpenSea.
A most simple explanation of Blur is that it is an NFT marketplace where people can buy and sell NFTs.
What differentiates Blur from other NFT marketplaces, and specifically its main competitor OpenSea, is:
Zero trading fees. OpenSea, meanwhile, typically has a 2.5% trading fee.
It is an aggregator. Instead of strictly offering NFTs listed on Blur, Blur pulls from OpenSea, LooksRare, and X2Y2 to offer traders the broadest possible range and lowest possible prices.
These improvements and Blur’s (in our opinion) pretty sleek user interface make it a compelling challenger to OpenSea’s throne, but it doesn’t put it over the edge. OpenSea has been too dominant for too long to lose its crown over relatively minor differences.
And Blur knows this. That’s why they’ve declared all-out war.
Blur has recently fired two significant shots in OpenSea’s direction.
The first was the release and airdrop of its token, BLUR. As it is with all airdrops, people were very excited to claim their free magic internet money, which they did in force. The result was a rush of attention to Blur, which resulted in trading volume that surpassed the currently token-less OpenSea.
The second was its blocklisting announcement that it would enforce any royalty fee requested by NFT creators, so long as they block their JPEGs from being listed on OpenSea. To fully understand why Blur did this, we have to cover the royalty wars:
Royalties are the commission that NFT creators receive each time one of their projects are sold. Historically, NFT marketplaces have always enforced these royalties.
Last fall, Blur said ‘screw that’ and stopped honoring royalties. The hope was that this would make buying NFTs cheaper, incentivizing people to migrate to Blur.
OpenSea suddenly found itself in a tough spot. Dropping royalties would lead to a creator uproar, but not dropping them would hurt their prices compared to Blur.
As a result, OpenSea released a blocklist tool that allowed creators to block their NFTs from being traded on any marketplace that didn’t honor royalties. The collections that used this tool would be granted full control of their royalties on OpenSea.
This obviously hurt Blur, as creators now had an incentive to keep their art off the marketplace.
Blur needed to find a way to attract creators back to its platform. Enter the OpenSea blocklisting announcement.
So, in a mere couple of weeks, OpenSea has seen a competitor capture everybody’s attention with a token airdrop and encourage creators to leave its platform.
A response was desperately needed.
OpenSea’s response was largely a waving of the white flag.
In the NFT marketplace world, this means that OpenSea now:
Has zero trading fees (for a limited time).
No longer blacklists marketplaces that don’t honor full royalty payments, including Blur, meaning creators no longer have to choose between the platforms to earn their royalties.
The result is that OpenSea now looks… well, a lot like Blur. The only major difference being the actual experience of using the marketplace. Considering that Blur is slicker, faster, and more gas-efficient than OpenSea, this is likely what Blur wanted the whole time.
We don’t often cover NFTs on CoinSnacks, and that’s for a reason. It is still so nascent and volatile. Losing money isn’t just possible; it’s likely.
But, for those of you who do deal in JPEGs, the NFT marketplace wars are a positive development. Competition breeds improvement, and that is exactly what’s happening here with Blur pushing OpenSea to evolve.
The result for all NFT connoisseurs is a faster, cheaper, and cleaner trading experience.