The NFT marketplace war heats up — here's how OpenSea and Blur stand head-to-head.
The fight for the top spot among NFT marketplaces is heating up. It's OpenSea vs Blur season, and the gloves have come off:
Crypto Twitter is already talking about an "NFT marketplace war." They're not wrong, you know. OpenSea and Blur had been trading punches over the last few months already. But the rivalry intensified with Blur's airdrop in mid-February. For the first time ever, a non-fungible token (NFT) marketplace is not only challenging OpenSea, but has — at least temporarily — overtaken OpenSea as the market leader.
This report analyzes the OpenSea vs Blur NFT marketplace rivalry:
- How the two platforms compare
- What the data shows
- What the outlook for the NFT space is
Comparing OpenSea vs Blur
For a long time, OpenSea was the number one NFT marketplace. LooksRare seemed to challenge the market leader for a while but could not sustain the positive momentum after its airdrop. Blur is following a similar yet entirely different strategy.
The first key difference between OpenSea and Blur is their respective target audience. While OpenSea was going after everyone, Blur identified whale traders as the key to attacking the incumbent. Blur's CEO Pacman, who recently doxxed himself, said as much in an interview.
This translates directly into Blur's different approach to encouraging platform loyalty. Its much-anticipated airdrop incentivized trading. More precisely, it incentivized traders to bid for NFTs close to the floor. This earned traders loyalty points, which later translated into BLUR. Moreover, Blur encouraged loyalty for listing as well. Traders that listed NFTs only on Blur received 100% of their allocated loyalty points. Those who did not, had to do with a discounted rate.
Also Read: How to Use Blur NFT Marketplace?
OpenSea has no token. Yet. The pressure is mounting on OpenSea, but so far, the platform has relied on its market dominance and first-mover advantage. But discontent about its approach has been bubbling. OpenSea's centralized decision-making has been criticized on numerous occasions, such as when it banned all Iranian artists from its platform. Knowing that "decentralization," is a good vector of attack in the crypto space, Blur ran with that narrative:
Blur's first move after its launch in October was to go after OpenSea in price. It reduced trading fees to zero and cut royalty fees. OpenSea responded by enforcing a block of all collections listed on non-royalty fee-paying platforms. This stemmed the outflow of value from OpenSea to Blur, but only for a while.
Blur eventually found a way to bypass OpenSea's block and set the stage for the great airdrop:
The airdrop, then, was a smashing success. Not only did it generate loads of attention in the space, but it also turned Blur into one of the top protocols on Ethereum:
This forced OpenSea's hand, leading to a "temporary" suspension of royalty fees to defend its market share:
In a particularly audacious move, Blur turned the tables on OS, daring creators to block listing on OpenSea to receive full royalty fees:
The marketplace wars are well and truly on now:
But is Blur a fundamentally better platform than OpenSea?
Casual users probably won't see a big difference between the two. But traders and heavy users benefit from a better UX, specifically geared toward them:
The situation for OpenSea looks particularly concerning when you compare the latest data of the two platforms…
OpenSea vs Blur: The Data
A look at Hildobby's Dune dashboard comparing OpenSea and Blur reveals an interesting development.
Blur had been leading OpenSea in trading volume for a while, thanks to the airdrop incentives that caused accusations of wash trading on Blur. However, after the airdrop on February 15, trading volume exploded on Blur:
This could be due to the second season of the Blur airdrop being underway. By trading on Blur, users can rack up points now. This, of course, translates into more elevated volumes. Still, the numbers are impressive, especially because it doesn't stop at trading volume.
Blur has overtaken OpenSea in weekly trading count:
But it is also closing the gap in weekly user count. And fast:
Even though a share of trades is wash trading, it looks like Blur is heavily eating into OpenSea's market share:
Blur now even leads in royalty fees and royalty-paying transactions:
Except for unique user count, Blur has now overtaken OpenSea on all metrics.
How sustainable is this?
As Nansen notes, the top 100 traders on Blur make up a significant share of its trading volume:
And analysts caution that the top traders are farming BLUR just like they were farming other marketplace tokens before that:
Still, no marketplace has ever eaten as much into OpenSea's dominance as Blur has managed. OpenSea's dominance in the weekly trader count, the only metric it still leads in, is down to a historic low:
The question stands: Is this a changing of the guard and where do we go from here?
OpenSea vs Blur: The Outlook
The Ultimate Guide to NFT Marketplaces and NFT Royalties was written just before Blur's big push for the top spot. However, here are some trends that could emerge from this development.
OpenSea launches a token
The NFT space has been long barreling down OpenSea's door to launch a token. With the leader exposed, it may have no choice but to give in.
Although there is arguably a share of traders farming Blur's next airdrop, the longer Blur sits at the top spot as the NFT marketplace, the stronger its brand becomes. A token could be a relatively manageable, if not inexpensive way to fight fire with fire. The trend has been the same every time: whale traders follow the financial incentives. That could be OpenSea's ultimate trump card.
NFTs become more financialized
OS token or not, the NFT space is merging with DeFi for good. Blur has forced other marketplaces to compete for the biggest wallets with incentives first and UX second. Both are geared toward traders, not towards creators. Mass enforcement of royalty fees looks dead in the water and the new market leader will be a DeFi platform first, and a creator platform second.
Vertical marketplaces will rise
This opens a niche for smaller marketplaces targeting specific niches. As mentioned in our last report, strong brands will have the means and incentives to launch their own marketplaces. Creators may band together and target collectors over traders to ensure they are paid for their work. Entirely new monetization mechanisms could arise from this too. In a race to the bottom for royalty fees, NFT creators will have to find creative ways around trader dominance.
One thing is for sure. The NFT marketplace wars are far from over. Are you not entertained?
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