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The NFT ecosystem is bracing for impact. In just two weeks, the wildly successful and controversial NFT marketplace and aggregator Blur<\/a> will end its Season 2 airdrop, with big payouts of its native token, $BLUR, expected to land in the hands of its most loyal and active users.\u00a0<\/p>\n Rewarding users for participation is a good thing in theory, a concept that certainly aligns with Web3 principles of all boats rising in the tide. But Blur\u2019s strategy of leaning into the NFT pro-trader demographic by alluring them with staggered token rewards could backfire spectacularly for the platform \u2014 and have a profound ripple effect on the rest of the NFT sphere as well. Is Blur backing itself into a corner?\u00a0<\/p>\n When Blur came onto the scene in October 2022, it rapidly became the top NFT marketplace by volume, dethroning OpenSea, the reigning marketplace champion of the past six years. That success only became more acute after Blur launched $BLUR, its native ERC-20 governance token<\/a>, on February 14, whose value at the time of writing is hovering around $0.80.\u00a0<\/p>\n The token launch marked the end of Season 1 of Blur\u2019s token reward system for its users. The airdrop payouts were substantial; according to some estimates<\/a>, 34 wallets received over 500,000 tokens, with another 23 earning over a million $BLUR.\u00a0<\/p>\n Large Recipients:<\/p>\n The $BLUR<\/a> airdrop was based upon Blur trading volume, and therefore large NFT traders benefitted greatly from migrating over from Opensea.<\/p>\n 34 wallets received over 500K $BLUR<\/a>, and 23 received over 1M!<\/p>\n (h\/t @pandajackson42<\/a>, check out @jconorgrogan<\/a>\u2018s post too!) https:\/\/t.co\/kTsXcDAoSR<\/a><\/p>\n \u2014 Arkham (@ArkhamIntel) February 15, 2023<\/a><\/p><\/blockquote>\n The aftermath of $BLUR\u2019s launch saw activity on the marketplace surge even more than it had done previously; in terms of weekly trading volume, the platform has outperformed OpenSea by as much as $417 million and as little as $97 million between February 20 and April 10, according to Dune Analytics<\/a>. February 14 also marked the beginning of Season 2\u2019s token reward era, which was scheduled to end on April 1 but was delayed<\/a> until the beginning of May.\u00a0<\/p>\n While announcing the delay, Blur also revealed that it would extend its double-points rewarding system for users who bid on NFTs on the platform until Season 2 concluded, further incentivizing users to keep its volume numbers well above that of its biggest competitors. Users who bid more often accumulate greater points, leading to a bigger airdrop at the end of the season.<\/p>\n But cracks in Blur\u2019s high-performing armor have begun to reveal themselves. Ever since the marketplace\u2019s rise to dominance, significant swaths of the NFT community have pointed to the uncomfortable fact that just a handful of Blur\u2019s biggest traders<\/a> can sway the floor prices of entire NFT collections as they stumble over each other to token farm. Projects ranging from the biggest PFP collections<\/a> in existence to highly sought-after fine art NFTs<\/a> suddenly found their pricing increasingly tied to large-scale and lightning-fast trading action at the hands of a few as opposed to Web3 community sentiment and organic price action.\u00a0<\/p>\n Pacman (Tieshun Roquerre), Blur\u2019s co-founder, has argued<\/a> that this kind of activity is typical of traditional finance and that the movement of the NFT ecosystem\u2019s biggest market makers \u2014 like Franklin and Machi Big Brother, two legends in the NFT pro-trader sphere \u2014\u00a0is just fundamentally going to look different than what Web3 is used to. <\/p>\n Ultimately, Roquerre claims Blur\u2019s success is good for the NFT space. But not everyone is convinced of that claim\u2019s legitimacy, including some of the community\u2019s biggest and most well-known and respected names<\/a>, nor of the premise that Web3 needs to be a place that replicates every aspect of traditional finance.\u00a0<\/p>\nSuccess in jeopardy\u00a0<\/h2>\n
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