(Blur NFT marketplace logo, modified by CoinDesk)
Hear from Yuga Labs new CEO in his first public appearance since assuming the position.
It was just over four months ago whenBlur launchedas a no-fee non-fungible token (NFT) marketplace targeting "pro" NFT traders. Its no-frills user interface and advanced features like “floor sweeping” across multiple marketplaces, fast "snipe reveals" and portfolio analytics tools, quickly made it a favorite among fast-paced traders looking to get the best deal and maximize profits.
Blur's popularity spiked last month upon therelease of its native BLUR token, which had been steadily airdropped to its users in the form of care packages over several months as a reward for trading activity. The token allows holders to participate in the platform’s governance protocol and profit from the community-owned marketplace.
Several data aggregators and user-generated dashboards indicate that Blur has sailed past top NFT marketplace OpenSea in terms of trading volume in recent weeks. According to DappRadar's February Industry Report, Blur made up 64.8% ($1.32 billion) of the NFT market share last month, with trading activity "largely driven by NFT whales farming on the platform."
And while OpenSea continues to lead in the number of daily users, according to the data, Blur's meteoric rise has spooked OpenSea enough to make it change its creator royalties and platform fees to stay competitive.
Speaking to CoinDesk, Blur co-founder Pacman, who revealed himself to be 24-year-old developer and investor Tieshun Roquerre last week, said that OpenSea's shortcomings were what initially motivated him to create a platform for more advanced NFT traders.
"I really fell in love with the NFT space. I love the trading side of it," he said of his early days trading NFTs, which he started doing during the time he founded several successful tech companies out of San Francisco. "I was just very frustrated. And using OpenSea at the time, I just felt like it was very slow and clunky – you know, good for newcomers, but for someone that was more experienced and native in the space, it felt like I was fighting the platform a lot."
He set out to grow a platform aimed at courting more advanced NFT traders, which he likened to "a Binance for NFTs." He also cites decentralized crypto exchange Uniswap and Chinese e-commerce platform Taobao as inspirations for Blur's tokenomics and growth strategy.
The platform raised $11 million in seed funding led by Web3 investment giant Paradigm in March 2022, which helped it build the foundations for its ambitious roadmap and plans to "move the NFT space toward becoming institutional grade while increasing decentralization."
The MIT and Y Combinator alum, alongside his pseudonymous co-founder Galaga, assembled a team of 10 builders from across the fintech and trading worlds to bring the vision to life.
Pacman told CoinDesk that his choice to initially be pseudonymous gave him the opportunity to pull back the curtain on Blur's mysterious inner workings at any point.
"Once we launched the token and started decentralizing, I think the attention on Blur just became so great," he explained. "If people are wondering, it's gonna come out anyway ... It feels like the right time."
This model, while appealing to a more experienced crowd, has also irked many developers, creators and collectors who believe that the NFT market is slowly moving agency and profits away from artists.
Roquerre expressed mixed feelings towards creator royalties, stressing their importance while also lamenting a changing NFT landscape in response to a prolonged crypto winter.
"One of the reasons why I personally fell in love with NFTs was because they're not commodities, they are digital collectibles," he said, likening the experience of trading them to collecting and trading Pokémon cards. "When it comes to royalties, our position has always been 'how can we maximize royalties in a scalable, durable way?'"
He noted that marketplace attitudes toward enforcing creator royalties began to shift in the summer, when several marketplaces,including Sudoswap, began removing royalties to spark lagging trading volumes. Soon, even the most mainstream platforms, like Magic Eden and LooksRare, began making royalties optional, creating an environment where fees needed to be reduced in order for marketplaces to stay competitive.
"Royalty enforcement is the prisoner's dilemma," he said. "Our thinking was 'okay, so there are these zero royalty venues, can we at least incentivize traders to go away from them, and instead, at least honor some royalties?'"
Roquerre noted that Blur encouraged traders to honor creator royalties by offering more BLUR token rewards to traders that listed NFTs with full royalties during its second token airdrop. "It didn't work perfectly, but it did have an impact on the royalty enforcement."
Ultimately, Blur was locked into a battle with top competitor OpenSea for weeks, after the latter began blocking NFTs originally minted on its platform from being resold on secondary marketplaces that didn't enforce full creator royalties (Blur included). OpenSeatook a firm positionon honoring creator royalties, but recently shifted its policy as Blur began dominating the NFT market share.
"We think it's really sad for communities when big players in the space say they're going to do something and then change what they say a month later," Roquerre said. "So we try only ever to put out policies that we can honor and not have to change."
In addition, he explained that his relationship with Paradigm dates back to 2018, when they investedin one of his earlier projects called Namebase. Paradigm is also an investor in Uniswap, which Blur looked to for inspiration in building out its protocol and tokenomics.
In February, Blur embarked on a more decentralized approach to expanding its platform, allowing BLUR token holders to participate in the platform’s governance and control the protocol's value accrual and distribution. The Blur Foundation was also set up at the time to help foster community growth.
Ultimately, Roquerre said that the platform's future will be heavily influenced by its community, which has access to a treasury that holds 39% of the total BLUR token supply.
"The community can vote on treasury grants that can be used for development features or various initiatives," he said, adding that they could also vote to allocate the treasury towards "a new economic design," which may include introducing platform fees at some point in the future in order to generate additional revenue.
"The philosophy that we kind of had in designing the system as core contributors is that we wanted to be able to deliver value immediately, have a clear story for why the protocol is able to accrue value, and ultimately give the holders the flexibility to utilize different schemes in the future as market conditions change," he concluded.