Original author: Xijiaxiang, ChainCatcher
The exponential growth of the NFT track is one of the brightest existences in the encryption field in the past few years. Some people value its cultural attributes, some people believe that its essence is more financial products, and some people believe that its emergence and prosperity mean that it is finally possible for us to map real-world assets to the blockchain in some way.
This article will go deep into the most certain and largest opportunity in the NFT track – NFT trading platform, starting from its current competitive landscape and moat, and analyze the most topical emerging platform in the past year – the development of Blur and its airdrop The achievements and worries behind the strategy.
The Competitive Landscape of NFT Trading Platforms
Many NFT trading platforms exist due to the supply-side pursuit of transaction volume and extremely low migration costs. They can be simply divided into two categories – comprehensive trading platforms and vertical trading platforms. Comprehensive platforms cover a wide range of NFT categories; vertical platforms focus on specific categories or industries, such as games or curated NFT collections.
The most popular comprehensive NFT trading platform is OpenSea, and Rarible, Mintable, Coinbase, etc. are all challengers of OpenSea. The differences between different comprehensive NFT trading platforms are mainly reflected in:
1) The convenience of discovering new projects is different: Currently, Twitter and Discord are the mainstream platforms for discovering new NFT projects. By improving the display interface and search function, the trading platform is expected to promote the discoverability of new (high-quality) items, thereby increasing the user’s dwell time.
2) The completeness of integrated SaaS tools and functions is different: at present, OpenSea and its competitors are more like front-end products with relatively friendly interfaces that have not yet fully matured. If additional features are added, such as NFT portfolio management tools, easier minting tools for creators, and richer social features, exchanges will further lock-in users and increase their migration costs.
3) Reputation and popularity are different: In the crypto space, “trustworthy” platforms are very scarce. At present, OpenSea’s most important advantage over other competitors comes from this. Therefore, the project party will regularly put its OpenSea link on the Discord channel and Twitter personal homepage, which undoubtedly creates a “reputation” moat for OpenSea.
Vertical trading platforms are represented by Foundation, SuperRare, Immutable, etc. They all focus on a specific vertical field, such as Immutable focuses on GameFi, and SuperRare focuses on works of famous artists.
The characteristic of the vertical platform is that it can help buyers eliminate the interference of complicated information and find what they really want more conveniently. Therefore, they pay more attention to user needs and experience. In order to find the signal from the noise, “selection” has become a strategy for such platforms to recommend high-quality projects. Gemini-owned Nifty Gateway, for example, regularly curates such events to highlight unique NFT collections.
The landscape of NFT trading platforms is far from mature. Because this asset class itself is very trendy, and there is still broad room for innovation in platform functions. We might as well learn from the comprehensive and vertical trading platforms in the traditional Web2 industry to understand the possible changes of NFT trading platforms.
Specifically, a comprehensive platform like OpenSea hopes to profit from a single product experience in a huge user base, and its ultimate goal is to maximize the acquisition of users and traffic; Customized personalized experience according to the needs of customer single users, occupying a place by providing long-term services for fewer but better customers. This is why high-value NFTs are more favored by vertical trading platforms.
The five major moats of NFT trading platforms
Trading platforms have existed in some way since the dawn of human society (it’s just that the medium of trading keeps changing). They exist in different industries, groups and classes, but there are some key characteristics in common.
1) Transaction volume
A good trading platform must attract attention and bring sufficient trading volume to participants. Usually this happens in categories with high-frequency trading behavior, such as people’s food, clothing, housing and transportation. In the crypto world, many transactions are driven by speculative purposes, and high-frequency trading is naturally normal.
Being able to efficiently search for items can lead to higher transaction volumes for trading platforms. Not only does this increase customer lifetime value, but a smooth search function and buying experience helps reduce churn. At present, the comprehensive NFT trading platform is making efforts in this regard.
3) User experience
For users of the NFT trading platform, the entire transaction process can be disassembled into multiple steps: search, decision-making, placing orders to take orders, order completion rate, transaction frequency, transaction costs, etc. The best trading platforms are reasonably optimized for every step of the way, including friendly payment methods, the ability to solve unexpected problems, and interfaces and interactions that appeal to a broad user base.
So far, the user experience of comprehensive NFT trading platforms is relatively unsatisfactory. OpenSea has been more like a simple front-end product for a long time. If it wants to focus on actual trading issues, the trading platform needs to make bold innovations. The following sections will detail Blur’s various “trader-friendly” features to prove that it is more refreshing than OpenSea.
4) Economic incentives
Successful exchange platforms can bring economic value to the buyer or seller, and they preferably have something more than the original method, such as cost advantages or platform incentives. For sellers, this will stimulate more demand and thus increase revenue; for buyers, it can effectively reduce costs.
NFT trading platforms have their uniqueness. Due to the innovation of ownership relations in the Web3 field and the emergence of tokenization strategies, NFT trading platforms can not only create original economic value for users, but also further motivate users to use and retain by means of issuing tokens.
5) Multi-chain polymerization
Users have suffered from the fact that the trading platform has been too scattered for a long time. For NFT trading platforms, the multi-chain ecology makes the market too fragmented and it is not convenient to complete transactions. Today, users still need different platforms, different wallets and even different currencies to purchase NFT on Ethereum, Solana, Tezos, and Avalanche, which is really not conducive to creating a high-quality user experience.
The catfish that churns the industry – Blur
As a community-driven NFT trading platform designed for traders, Blur has its own uniqueness. It brings together orders from platforms such as OpenSea, LooksRare, and X2Y2, while allowing users to list their own NFT assets on Blur. Unlike other platforms that charge a commission on transactions, Blur currently maintains a 0% fee.
Before the official release, the platform has attracted too many people’s attention through mechanisms such as invitation registration, friend referral reward program and Waitlist. In summary, the early discovery of PMF is inseparable from the following three elements:
1) Ease of use
By default, NFTs are sorted by daily transaction volume, and all key data (such as floor price, number of owners, and various volume price indicators) can be seen at a glance. Here, users can easily track and analyze an NFT’s rarity, collection value and even a rough return on investment.
Blur’s interface is very customizable. When browsing the NFT collection, users can switch between multiple views according to their preferences. Unlike OpenSea, which requires complex tab switching to view sales history or other analytical metrics, Blur displays everything on a single page. Other small features, such as dark/light mode, gas fee tracker, etc., are also unique details that surpass other platforms.
Of course, it needs to be admitted that for novices, the complex data of Blur interface may make them daunting. It’s very reminiscent of the Bloomberg terminal, and newcomers take some getting used to and exploring. But for those willing to take the time to get used to Blur, the benefits compared to other NFT trading platforms are obvious.
2) Function innovation
The bottom layer of a good user experience is adequate but not overly innovative features. According to Blur’s promise, the speed of sweeping the floor is ten times faster than other platforms, and the display of pending transactions is lightning fast, coupled with near-instant data updates, it is difficult for users not to be captured by it.
In addition, Blur can clearly display the rarity of NFTs with different characteristics in the same series, and even allow users to see the floor price of specific attributes. It finds the lowest priced order for each individual feature and presents the data in an easy-to-understand manner. This feature helps users accurately assess their assets, and is also very convenient for users who want to scan NFTs with specific attributes.
Also, Blur’s “floor sweeping” tool can best meet the needs of professional traders. All NFTs have a floor price depth map showing how many NFTs are for sale at different intervals above the floor, helping users visualize how their purchases will affect the floor price.
Where Blur falls short functionally is that it currently only supports Ethereum-based NFTs. However, the Blur team has plans to integrate other chains such as Polygon in the future.
3) There are many builders and supporters
In March 2022, Blur raised $11 million in a seed round led by Paradigm. As one of the most successful VCs in the crypto space, Paradigm’s bet on Blur should not be underestimated. The company has previously backed many winners in the NFT space such as OpenSea and Magic Eden.
The round also attracted other players in the NFT and crypto space such as 0x Maki, Andy Chorlian, Santiago Roel Santos, Deeze, Zeneca, and more. The support of such KOLs shows that Blur has a certain community foundation and communication ability, and can gather a group of close industry enthusiasts.
In addition to having a group of reliable investors, Blur’s founding team is also quite outstanding. Not long ago, Blur founder Pacman officially disclosed his identity, saying that he was admitted to the well-known incubator Y Combinator when he started his business at the age of 17, and then entered the Massachusetts Institute of Technology. It is sold to Namecheap. Such a resume is not unremarkable.
According to Blur officials, most of its team members come from universities, enterprises and incubators such as MIT, Citadel, Twitch, Brex, Square and Y Combinator. The experience of such a founding team effectively guarantees the reputation of the project.
Achievements and Concerns of Blur’s Airdrop Strategy
As mentioned above, for NFT trading platforms, rich choices and friendly experience are the basis for gaining a foothold in the industry and capturing more market share. Blur’s speed advantage and unique features are its important moats. Because of this, 65% of Blur’s early users come from OpenSea and Gem.
But Blur didn’t stop there. It has effectively used the big killer in the encryption field-token airdrops, and further completed the sniping of OpenSea.
Launched in December 2017, OpenSea has occupied the leading position in the NFT industry for the past few years and has accumulated considerable experience and resources. Facing such an opponent, how can Blur quickly catch up or even overtake in terms of transaction volume?
Blur is well aware that airdrops can help with this phased goal.
It chose a rather ingenious way to divide the airdrop into three rounds:
Round 1: Users who have traded NFTs in the past 6 months
Round 2: Users Actively Listing NFTs on Blur
Round 3: Users who bid on Blur
Also, according to the Blur blog post, users who respect the royalty charge instead of setting it to 0 will get more airdrops, user loyalty also affects the number of airdrops, and to keep loyalty high, users need to pay equal or less than other transactions Platform prices list NFTs on Blur.
This ultimately led to a tactical victory. Under Blur’s fierce offensive, OpenSea has been losing ground, and its market share has dropped from a peak of 99% last year to 50-30% at the beginning of this year.
However, the success brought about by the airdrop itself is only temporary, and the experience of LooksRare and X2Y2 tells us that it is difficult to sustain.
Both LooksRare and X2Y2 have also launched token incentives in early 2022. How exciting the airdrop is, how bleak the currency price will be after a setback. They didn’t do much to grab OpenSea’s niche at first, and today the same narrative is still alive, but not as enticing as it once was.
Therefore, Blur needs to abandon illusions and capture more tactical victories.
From the data point of view, in the first two months of 2023, the number of independent buyers of OpenSea has declined, and the average number of transactions per user has also decreased; at the same time, Blur’s various indicators have increased. That is, a group of NFT traders started to switch from OpenSea to Blur, and the current average transaction volume on Blur is higher than that on OpenSea. And all of this is obviously due to the continuation of Blur’s airdrop strategy.
It should be pointed out that although Blur has grown significantly in terms of transaction volume and market share, the details behind it are not so optimistic. According to Dune data, about 15% of OpenSea’s trading volume in the past four months came from 8 blue-chip series (CryptoPunks, BAYC, Otherdeed, MAYC, Meebits, Moonbirds, CloneX, Doodles), while about 41% of Blur’s trading volume came from the same blue chips.
In other words, OpenSea’s transaction volume distribution is healthier, with most transactions coming from waist and tail works; while Blur’s transaction distribution is too concentrated and relies more on head NFT. This shows that OpenSea still has significant advantages, and there are a large number of long-tail supply and demand sides.
The story of Blur shows that even in the sluggish encryption market, there are still active teams with innovative products, so that the industry leaders have to be vigilant to avoid being overthrown.
But at the same time, whether Blur can really establish its own position, and even surpass OpenSea to bring more users to the industry is still unknown.
Web3 doesn’t need more fluff from short-term PMFs, chasing false dreams, and being overly speculatively driven, it needs something new that actually makes progress, delivers on its promise, and makes a name for the industry. Including Blur, we still have a long way to go.
Disclaimer: This content is the author’s independent opinion, does not represent the position of 0x Finance and Economics, and does not constitute investment advice, please treat it with caution, if you need to report or join the exchange group, please contact WeChat: VOICE-V.
Source: Chain Catcher Originals