The founder of Blur, a rival to OpenSea targeting savvy traders, came to the defense of the marketplace today amid a prolonged slump in NFT prices.
Pacman, whose real name is Tieshun Roquerre, responded to Twitter chatter about whether Blur is to blame for killing the market.
“We launched in October 22. Since then, some floor prices have gone up, some floor prices have gone down,” Pacman tweeted late on July 5. “One of the few times floor prices went up in concert was when we injected liquidity into nfts via our airdrop. One of the few times floor prices went down in concert was when $40m of liquidity was removed via the Azuki mint (not throwing stones, the market just moves based on liquidity more than anything else).”
The NFT market has been in a supressed state for over a year, at least relative to the dizzying heights of 2021. Lately, even the premier collections have suffered.
The floor price — the cheapest point of entry for an NFT collection — of Yuga Labs’ Bored Ape Yacht Club currently sits at 28 ETH (around $53,000), as low as it’s been in over 18 months and less than half its value at the start of the year, according to NFT Price Floor data. The floor price of Azuki, another popular collection, crashed after its creator Chiru Labs botched the launch of a new set of NFTs last week.
In both cases, fingers were pointed at Blur, the Paradigm-backed marketplace for pro traders.
Lior Messika, whose venture firm Eden Block is an investor in Yuga Labs, said that NFT whales who had previously identified as “collectors” now brand themselves traders or even “Blur farmers,” adding that the space had become distorted by the “fear and greed of a few traders.” Brad Kay, a research analyst at The Block Research, said a large part of the Azuki sell-off could be attributed to Blur’s lending platform.
Dominating trading volumes
Blur is certainly dominating trading volumes. It currently accounts for 70% of NFT marketplace volume on Ethereum, according to The Block Research’s data. The Block reported earlier this year that the company is raising money at a billion-dollar valuation.
In his tweet today, Pacman suggested criticism of Blur’s success is misplaced.
“When asset prices are up, ppl don’t really talk about the root cause (ie blur injecting liquidity), but when they are down, the pitchforks come out,” he said. “Bad takes spread like wildfire and at this point I just consider it the cost of doing business.”
Despite the selloffs in major collections, data from The Block Research suggests the wider market is holding up roughly as it has for the past year. The chart below reflects the combined market capitalization of the top 20 NFT collections, multiplying floor price by supply.
NFT market capitalization. Source: The Block Research. theblock.co