GM frens,

In today's edition of The Ground Floor we will be breaking down the recent success story of Blur — the latest NFT marketplace / aggregator, and what its success means for Web3.

Buyers Benefit From Blur

Breaking down why Blur continues to gain ground in Web3...

The Web3 World exists of both collectors & creators.

When discussing the value proposition of Web3 applications, much, if not all of the focus for the past two years has been on the benefits that will accrue to creators.

Web2 vs Web3

As an active participation in the digital creator economy, such a strong focus on servicing the needs of digital creators is refreshing, and long overdue with many of the most successful applications in the Web2 World capturing all the value creators create.

• ❌ Twitter paid its top creators $0 in 2021.

• ❌ LinkedIn paid its top creators $0 in 2021.

• ❌ YouTube captures 45% of creators advertising revenue.

• ❌ Twitch captures 50% of creator subscription payments.

Chapter One

Chapter one of Web3 put creators at the center of the story.

This is very much to be expected given that collectors won't have anything to collect if creators don't create desirable digital goods to start with.

As such, it should come as no surprise that the initial focus of Web3 was the value that creators could receive by joining this new digital economy we call Web3.

During chapter one of this story, creator royalties took center stage, with many creators being successfully sold on the idea that they could capture a percentage of the value of each future transaction, as their digital creations appreciated in price.

Chapter Two

As the floor prices of projects began to fall, many collectors began to reexamine this structure which brings us to the second chapter of this story: the emergence of platforms that removed the need for collectors to pay creators royalties.

Platforms such as X2Y2 & Looksrare were some of the first to remove creator royalties, much to the disappointment of the creators who were sold on Web3 on the basis that they would be eligible to capture a percentage of all future transactions.

Such a move was arguably inevitable in light of OpenSea dominant market-share, however, the platforms that adopted this approach of removing creator royalties made a fatal mistake — they continued to collect marketplace fees ranging from 0.5% - 2%.

While these fees may seem fair when compared to OpenSea's 2.5% fees, the fact remains that these marketplaces put themselves in a position whereby they would be eligible to receive fees, while creators would have to find alternative sources of revenue.

Chapter Three

Charging marketplace fees paved the way for Blur to capitalize on this mistake when they announced a 0% fee marketplace that eliminated both creator & marketplace fees.

First and foremost, such a strategy instantaneously incentivized buyers to list their items on Blur where they would retain 100% of the transaction, however, this decision also created a sense of shared suffering whereby Blur would also have to find alternative revenue streams alongside creators.

Is this strategy working?

Yes, Blur have found favor with NFT buyers & the platform that's less than 3 months old is within 50% of the total number of daily NFT sales vs OpenSea today.

Why has this strategy worked so well?

Make no mistake, the recent success of Blur is part of a bigger trend.

At its core, Blur is seeking to specifically serve buyers, whose wants & needs have been overlooked in recent times as the core focus was placed on creators, however, this success story highlights how focusing on buyers is a strategy that will be duly rewarded.

📡 Looking Forward

Without charging marketplace fees, it's unclear how Blur will generate the revenue needed to sustain its marketplace — with the platform also lacking some key features that are needed such as the ability to make WETH offers / bids on NFTs.

Despite this uncertainty, it's clear that Blur have built an impressive product with strong traction courtesy of capitalizing on each mistake their competitors have made.

It's my perspective that Blur have made all of the right decisions to date, and while Blur will need to build on this progress to build a project that can sustain itself in the long run, as a relatively active NFT collector, I am rooting for their success amongst others.

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See you next time! — OB1