🔵 So...is this the end for OpenSea?
The NFT marketplace war is getting heated
Happy green Monday friends. The SEC has been on a crackdown streak this past week. From going after Kraken, Binance, Paxos and now Terraform Labs, the SEC has been collecting their coins, but the crypto market is hanging on tight.
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In this issue:
📣The big story of the week. OpenSea vs. Blur - who will take the crown as NFT king?
🚀The good. Do Kwon finally gets served the SEC lawsuit for the TerraLUNA fraud and Amazon makes a $20 million investment in Superplastic.
🐻The big, bad FUD. BAYC NFT gets caught stealing artwork and Binance exterminates more FUD.
📣The big story of the week
OpenSea vs. Blur - who will take the crown as NFT king?
Whether you want to admit it or not, a good boxing match is always great for entertainment. So get your popcorn ready and place your bets 🍿. This boxing match is between the top two NFT marketplaces - OpenSea vs. Blur. Will Blur finally be able to take the crown from OpenSea and become the new reigning champion of NFT marketplaces 👑? But first, a little backstory.
🌊 A brief history of OpenSea
OpenSea has been holding the title as the #1 NFT marketplace since its launch in 2017. As one of the OG platforms to buy and sell NFTs, OpenSea birthed some of the most iconic NFT projects, including CryptoPunks, Bored Yacht Apes Club (BAYC), Doodles and Art Blocks. Despite the emergence of competitors like X2Y2, Magic Eden, Rarible and LooksRare, none of these platforms have ever truly come close to matching the trading volume that OpenSea was pulling.
3/ For a significant amount of time OpenSea held the title of No.1 NFT Marketplace.
There were numerous problems when it came to UX such as purchasing assets one by one (no sweeps) plus a clunky interface.
Many were disappointed in the Monopoly which lead to funding competitors
— McKenna (@Crypto_McKenna)
Feb 15, 2023
So naturally, OpenSea got comfortable…maybe a bit too comfortable. With a $13 billion valuation and the lion's share of the NFT trading market, why would OpenSea even need to try and innovate when they’ve already won?
Say hello to Blur 👋
In the midst of the cold, dead crypto winter, Blur emerged late last year to shake things up. In just a month, the NFT aggregator and marketplace was already outperforming its competitors and quickly rose to become OpenSea’s arch-nemesis 😈.
3/ Ever since October, Blur has continued to gain market share at an astonishing pace. With each phase of the upcoming $BLUR airdrop assisting towards their overall traffic. Since the airdrop was announced, Blur has even had days with over 50% of the total NFT marketplace volumes https://t.co/uSToohgHem
— Animoca Digital Research (@animocaresearch)
Feb 16, 2023
How did that happen though? What makes Blur so competitive against OpenSea? Well, for one, Blur is well-funded and backed by VCs like Paradigm. That always helps 🤷.
Secondly, they have a brilliant marketing strategy using token airdrops 🪂. Over the course of 6 months, about 12% of $BLUR tokens have already been released into circulation via airdrop and there is still 40% to be released over the years.
If you are looking for BLUR tokenomics, here you go.
- 12% airdrop can be claimed now by traders who used the platform through the box system
- 40% of all tokens will be released year 1. 30% year 2. 20% year 3 and 10% year 4.
- 3B total supply https://t.co/Au4CtrkPeX
— Loopify 🧙♂️ (@Loopifyyy)
Feb 14, 2023
And people are making bank from these airdrops, and when I say bank, I mean Blur is creating millionaires 💸. All these people had to do was be an active user of Blur and be incentivized with tokens.
The largest BLUR airdrop farmer has received 3.2M BLUR, worth about $1.9M at current prices
There are about 25 single-wallet BLUR millionaires thus far including:
— Conor (@jconorgrogan)
Feb 14, 2023
So basically, it’s free money for using the platform. C’mon, why wouldn’t someone choose to use Blur over OpenSea?!
OpenSea takes an L 🥊
At this point, OpenSea is getting a little worried. This is the first time anyone has come close to them. But what’s really been concerning OpenSea aren’t the airdrops, but the 0% creator royalties that Blur offers.
Here’s the thing, one of the great promises of NFTs is being able to properly pay the OG creator. On OpenSea, the typical creator royalty fee was 5-10%, meaning for every transaction made on the secondary market, a percentage would be charged to pay the creator.
Blur decided, what the heck, why not get rid of creator royalties and make it 0% 🤷♀️. If you want to add creator royalties, you will get incentivized with $BLUR tokens, but it won’t be enforced like OpenSea.
Creator sets royalties for their work. Market decides whether or not they want to buy from that creator, understanding those are the parameters set by that creator. Marketplaces should not have the authority to intervene and disrupt that by shifting power away from creators.
— BETTY (@betty_nft)
Feb 18, 2023
Now, this caused a huge kerfuffle in the NFT community. People were arguing that removing creator royalties defeats the purpose of NFTs, but the market doesn’t trade based on feelings. Despite this controversial move, Blur continued to steal market share as more and more traders flocked to the 0%.
During this time, OpenSea reiterated that they were on the creator’s side and would continue to enforce royalties. They even built a tool for collections to blacklist other marketplaces as a way to enforce creator royalties.
There’s been a lot of discussion over the past few months about business models for NFT creators & whether creator fees (“royalties”) are viable.
Given our role in the ecosystem, we want to take a thoughtful, principled approach to this topic & to lead w/ solutions. 🧵
— OpenSea (@opensea)
Nov 6, 2022
But lo and behold, they caved and took a huge L by backtracking their words . Last week, OpenSea came out with a statement that they would be “temporarily” suspending enforced creator royalty fees.
We’re making some big changes today:
1) OpenSea fee → 0% for a limited time
2) Moving to optional creator earnings (0.5% min) for all collections without on-chain enforcement (old & new)
3) Marketplaces with the same policies will not be blocked by the operator filter
— OpenSea (@opensea)
Feb 17, 2023
In just one move, OpenSea basically admitted defeat and is now being referred to as crypto’s first Blockbuster.
Though it may not seem like it, all of this is good, friendly competition. The NFT marketplace space was getting stale and needed a true competitor to challenge the OpenSea monopoly. But instead of trying to innovate and improve their platform and experience, OpenSea just caved and cut creator royalties, their one, true competitive advantage 🤔.
Is OpenSea going to be the next blockbuster https://t.co/UlJnYVXMgg
— Alex❓ (@ShiLLin_ViLLian)
Feb 20, 2023
At the end of the day, whether OpenSea or Blur wins the marketplace war, there is already one loser we know for sure and that’s the creators.
Thoughts on OpenSea:
1) Creator royalties are dead (unfortunately)
2) Crypto marketplace fees go to zero
3) OpenSea won't bring fees back up
4) Big projects will build their own marketplaces to own secondaries
5) Complacency kills
And yes, OpenSea will probably launch a token.
— Yano 🟪 (@JasonYanowitz)
Feb 17, 2023
In a move that seems way overdue, the SEC has finally charged Terra Founder and CEO Do Kwon for financial fraud in connection to the infamous TerraLUNA collapse.
whew lad, lots to digest in the SEC lawsuit vs Do Kwon and Terraform Labs
right off the bat, a very interesting fact is that the SEC is being more thorough than usual--specifically running through the Howey test for various assets (UST, LUNA, and wLUNA) and also alleging that… https://t.co/1JsBQijMnw https://t.co/qHuL6mKpeo
— _gabrielShapir0 (@lex_node)
Feb 16, 2023
Amazon is getting into web3 with a $20 million investment in Superplastic, a global company that has partnered with the largest brands, artists and celebrities to launch cool NFT products and experiences 🔥.
Today, we announce a collaboration with Amazon that spans investment and a first-look deal with Amazon Studios. The Alexa Fund leads our $20 million Series A-4 investment round & THE @JANKY & @GUGGIMON SHOW has been put into development at Amazon Studios. https://t.co/xV7NN3TcZB https://t.co/iCJxKlFFpX
— SUPERPLASTIC (@SUPERPLASTIC)
Feb 15, 2023
🐻The big, bad FUD
Caught red-handed! BAYC, one of the biggest NFT projects in the space has been caught stealing artwork without license or permission. Seriously 🤦♀️?
1/ Yesterday something remarkable happened in NFTs. The dominant company @yugalabs of @boredapeyc fame -- which has been suing and threatening critical artists and coders with trumped-up IP claims for months -- admitted the emperor has no clothes:
@yugalabs' own IP is stolen. https://t.co/8XIpseDW97
— Todd Fine (@tfine)
Feb 18, 2023
Binance just can’t escape the FUD. As the crypto crackdown gets serious, FUD started spreading that Binance could be cutting ties with U.S. crypto projects. But like a FUD exterminator, CZ quickly squashed the rumors 🐜.
We pulled back on some potential investments, or bids on bankrupt companies in the US for now. Seek permission first. https://t.co/js0OR7gy68
— CZ 🔶 Binance (@cz_binance)
Feb 17, 2023
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