The recent decline in NFT prices has sparked a blame game within the community, with many traders pointing fingers at the marketplace Blur and its incentivized trading model. Blur, which surpassed OpenSea as the leading Ethereum NFT trading platform in February, has been criticized for treating NFTs as fungible tokens and incentivizing the rapid flipping of assets. However, Blur’s founder, Tieshun “Pacman” Roquerre, has defended the platform against these allegations.
Blur entered the market last October, positioning itself as a platform for professional NFT traders and teasing a token airdrop that would provide incentives to use the forum. When the BLUR token was finally introduced in February, Blur quickly gained dominance in trading volume. However, the incentivized trading model sparked controversy, with critics labeling the practice “wash trading.” Traders took advantage of the rewards system, leading to a surge in trading volume, but the boost was short-lived.
As overall market trading has declined in recent months, traders who initially benefited from Blur’s incentives are now facing losses and withdrawing their funds from Blur’s NFT bidding pool. This has led to an increasing number of NFT traders and influencers on Crypto Twitter pointing out the negative effects of Blur’s approach. Some argue that Blur’s tactics have harmed the market, as the platform spends significant amounts on airdrop incentives to lower the price floor of NFTs.
Critics believe that Blur’s model incentivizes risky behavior and encourages over-leveraging, which can lead to market instability and a cyclic dumping problem. They claim that Blur’s approach undermines the platform’s long-term sustainability and the NFT market’s overall health. However, Pacman disagrees with these assessments, stating that floor prices have increased and decreased since Blur’s launch. He also mentioned that the recent launch of the Azuki Elementals collection had a significant impact on liquidity in the market.
Despite the growing complaints, Pacman defended Blur’s model, suggesting that criticism is the “cost of doing business.” He stated that when asset prices are up, people don’t discuss the root cause, but when prices decline, criticism spreads rapidly. Pacman’s tweet did not indicate any intention to change Blur’s model in response to the complaints.
While some traders and NFT owners have expressed frustration and accused Blur of tearing down projects and undermining market confidence, others support Pacman’s perspective. They argue that traders vote with their dollars and that independent actors creating their incentive models should be allowed in a free market. One prominent builder, Rohun “Frank” Vora, echoed this sentiment, implying that it may be inherently weak if the market cannot withstand such independent models.
Blur has recently launched its v2 protocol, introducing a new type of NFT bidding, associated rewards, and cheaper transaction fees. The emphasis on boosting trading rewards remains a focal point for the platform. As the controversy surrounding Blur’s impact on the NFT market continues, the community remains divided on the effects of its incentivized trading model.