Along with other digital assets, the NFT market has declined from its peak in January last year, when monthly sales skyrocketed to $5 billion. But in March 2022, operations worth $1.7 billion were registered, while the volume so far this year exceeds $4.7 billion.
Tieshun Roquerre, 24, co-founder of Blur, an NFT trading company, recalls the Vestaboard that hangs on the wall of his office and remembers that a few months ago the incessant click it emitted was deafening.
In the past six months, Roquerre and co-founder Anthony Liu, until recently known by his Internet name “Galaga,” have built the largest marketplace by NFT trading volume, unseating market leader OpenSea. Their creation secured a valuation of $13.3 billion in January 2022, making its co-founders Devin Finzer and Alex Atallah the first NFT billionaires. In March 2022, tiny Blur, which has just 10 employees, posted trading volume of $1 billion, compared with $260 million for OpenSea.
Along with other digital assets, the NFT market has declined from its peak in January 2022, when monthly sales skyrocketed to $5 billion. This year, however, the volume exceeds $4.7 billion. Some of the most popular NFTs, like Bored Apes, regularly sell for over $100,000.
NFT Trading Volume
San Francisco-based Blur’s rapid rise has stunned industry insiders because it was able to overtake New York-based OpenSea despite unsuccessful attempts by other well-funded start-ups.
OpenSea came to dominate the NFT market in the summer of 2021 and even as a flood of competitors arrived, OpenSea held around 75% of the market by the end of 2022. Its 2.5% transaction fees helped it raise $472 million in revenue in 2022, from a trading volume of $18.8 billion, according to Dapp Radar.
Roquerre identified a gap among customers that OpenSea did not serve very well: active NFT traders who sometimes traded hundreds of thousands of dollars a day in NFT. Based on this, Blur designed a very different user interface from OpenSea, inspired by active stock trading interfaces, with simple lists of NFT collections on a black background, and sortable columns displaying important trading data such as minute-by-minute price, volume, and ownership information.
Main NFT Collections
To keep costs down for these merchants, Blur launched a controversial tactic: it made payment of royalties to artists optional. Blur’s move, which angered artists, caused OpenSea to cut their royalties, and as of February, both markets had agreed to abide by a minimum royalty fee of 0.5%.
“Blur said, ‘I don’t care about art. I want to make a trade where people can make a market for these parts and I don’t really even care what they look like. I’m just going to trade them,” according to Shane Cutra, a former trader at the Chicago Options Exchange. Cutra claims to have made about $400,000 trading NFTs, since December 2020.
Building a sustainable moat around a business model took Blur less than six months from its launch last year, although it faces many challenges to staying on top. For starters, Blur doesn’t charge fees, so it lives mainly on its $11 million in venture capital funding. It will have to adopt fees or come up with some other revenue-generating model to sustain its overhead, which currently consists of just 10 employees, most of them software engineers.
By Audy Castaneda
