If you have not been living under a rock, you would most likely have heard of the latest rivalry between Opensea and Blur. In this article, we will be taking a look at how the rivalry has formed between the two and the effects it will have on NFT traders.
Blur was first launched last October of 2022, with the intention of becoming the fastest NFT trading site for professional traders. It allows traders to view listings and sales in real-time without having to refresh, and they also boast to have the fastest metadata process compared to any other platform.
At that time, Opensea has already been around for a while, and we all know how Opensea was – site full of lags during peak periods, slow metadata reveals, poor user interface etc. With the launch of Blur, it was like a breath of fresh air, as traders now have a much stable and faster platform to trade on.
During their initial launch, Blur also announced the airdrop of their own tokens, $BLUR, and traders will be eligible by trading on their platform. This resulted in a shift by traders from trading on Opensea to Blur, and drove up the trading volume on Blur as traders hope to farm for the eligibility of the airdrop.
Another major feature of Blur that attracted traders would be their 0% marketplace fees. What this means is that traders are able to maximize their profits while trading. With this, Opensea has later responded in a similar style, by implementing limited time 0% fees on their platform.
0% marketplace fee does sound good…does it?
Here are some implications that might occur due to this rivalry:
1. Creators are not incentivized
The hard truth is – without royalties, most NFT projects out there will slowly die off. This is because most of the smaller projects depend solely on the royalties to continue funding their project. Most of the NFT projects out there are solely profile picture or art NFTs, and they need the royalties to generate revenue for the creator. This will eventually deter new creators coming into the space and only major projects that are backed by VCs will continue to survive.
2. Increased mint supply
For newer projects coming in, by knowing that the option of generating revenue from secondary market sales is no longer viable, their only option is to increase the initial mint supply so that they can generate more revenue directly to continue funding the project and pay the team. In this market condition, we have all seen that most projects with high supply numbers generally have not been doing well post-mint.
3. Rise of NFT project marketplaces
We have already seen many projects such as Chimpers implementing their own marketplace to trade their project’s NFTs. By doing so, they are able to impose their own creator royalties and generate revenue when their NFT is being purchased or sold on their platform. However, for traders who are purely looking for profits, this would not be in consideration and smaller projects who implement such platforms may eventually still lose out.
So, how can you protect yourself as a trader from this rivalry?
Start exiting from projects that do not have an alternative source of revenue outside of royalties. This is because there is a high chance that these projects will not be able to survive without royalties and the team is unable to be paid.
As much as possible, invest in projects that are well-known in the space and have a significant backing by major VCs or corporations. These are the projects that have the funds to continue building and grow with the funding provided by these corporations.
In summary, it is more important now to do your due diligence especially when investing into projects for the long term now. If you are a creator, do take note of these changes and ensure that you have a plan for additional revenue stream to fund your project.
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