GM frens,

In today’s edition of The Ground Floor we are breaking down Blur's strategy to continue commanding maximum market share in NFTs...

Blur’s Successful Strategy

Less than 16 months ago, OpenSea was in cruise control mode ~ commanding more than 80% market share of the NFT market.

Today, Blur has taken over this pole position, with OpenSea having taken a back seat as Blur continues to command more & more market share.

Tokenomics

If nothing else Blur’s success to date is a demonstration of its deep understanding of the incentives that drive behavior in the Web3 world.

Need people to buy NFTs on your marketplace ~ reward users with a token.

Need people to list their NFTs on your marketplace ~ reward users with a token.

Early in its history, Blur’s ability to provide its users with the right rewards brought the brand invaluable positive brand equity as the recipients of these rewards ($BLUR) received thousands from its token with Blur season (1).

The Good, The Bad

Blur season (2) caused a sharp shift in sentiment as the actions Blur began to reward came under significant scrutiny as Web3 collectors perception became ~ “Blur is responsible for the prices of our favorite NFT collections falling”.

There’s certainly an element of truth to this as the individuals engaging in airdrop farming were willing to take small losses when buying and selling NFTs, however, in most cases ~ Blur merely sped up the process of collectors selling NFTs they owned.

The Winners, The Losers

Certain airdrop farmers such as MachiBigBrother took significant losses participating in season 2 of Blur’s incentive program, with Machi having lost as much as $14 million USD throughout Blur season 2, which lasted 9 months.

On the other hand, Cirrus managed to make a cool $150,000 participating in Blurs incentive program, without taking any major losses.

In total, an estimated 300,000,000 BLUR tokens were distributed in the airdrop marking the end of Blur season 2, around $150,000,000 in value.

Introducing Season (3)

The consensus concern with the end of Blur’s season 2 was the end of its incentive program, with airdrop farmers likely to unwind their positions which could result in a race to find liquidity at whatever prices people were willing to pay.

Fortunately for Blur, and perhaps the market, Blur have a third act up their sleeve.

On Monday, Packman, the founder of Blur took to Twitter to share his plans to build an L2 (a protocol built on Ethereum) called Blast.

What’s the goal of Blast?

Blast is seeking to solve a multitude of problems Packman has observed in the Web3 ecosystem, namely, native yield generation & reducing transaction fees.

1) Yield Generation: Blast is seeking to simplify the process of users earning yield (interest), which users will earn simply by holding ETH or stablecoins on Blast.

In doing so, Blast would provide users a much easier to access version of DeFi (Decentralized Finance) whereby users are otherwise asked to stake (lock up) their ETH.

2) Reducing transaction fees: By leveraging an approach called Optimistic rollups, Blast is seeking to execute transactions off the Ethereum main net, bundling these transactions, and posting the transaction data on chain.

Given Blurs majority market share when it comes to people purchasing NFTs, it’s crystal clear Blur will be an early adopter and beneficiary of this L2.

$230 Million Total Value Locked

At the time of writing, less than 48 since Blur made this announcement, users have locked up a whopping $230 million into Blast in order to benefit from the rewards the users providing the platform with liquidity will receive.

The playbook?

First, and foremost, Packman, the founder of Blur has a clear track record of rewarding the early adopters of the platforms he’s created, and the $230 million of ETH locked in Blast until this February is a reflection of this.

Secondly, Blast has introduced gamification whereby the more users you introduce to Blast who lock up their ETH, the more rewards you receive ~ an approach that’s clearly working.

Furthermore, users have the opportunity to “spin the wheel” to win prizes once each week for every 1 ETH or dollar equivalent they lock up on Blast, with users receiving greater odds of winning prizes for every 5 ETH their squad (the people you refer to Blast) lock up on the platform.

Looking Forward

Packman, the founder of Blur has mastered the art of positive poniznomics, and is second to none in his ability to design incentive programs that result in users taking the required actions to build successful products in Web3.

Whereas once it looked possible that Blur could give up its position as the #1 NFT marketplace by transaction volume, season 3 of Blur leaves little doubt that Blur is absolute here to stay.

As such, for better, or for worse, we will continue to see an increase in the financialization of NFTs as Blur continues to double down on its mission to empower the NFT trading community.

💡 Web3 Roundup

1) 💸 The $4 billion USD fine for Binance

2) 🎮 The game catching collectors attention

3) 🎨 Snowfro (creator of squiggles) details his journey into Web3

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See you next time! — Matt O’Brien 👋

This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity