Development of Blur

Initial stage

1/2022.3.29 Blur completed US $11 million seed round financing in NFT market, and Paradigm led the investment

• On March 29, 2022, according to TheBlock, the NFT market Blur announced the completion of US $11 million seed round financing, led by Paradigm, and participated by such institutions and angel investors as eGirl Capital, Keyboard Monkey, LedgerStatus, 0xMaki, Santiago Santos, Zeneca, Deeze, Andy (Fractional).

In the blog article announcing the completion of the financing round, the startup company wrote: “At present, the focus of the NFT market is retail experience, but they ignore the growing demand of professional traders. With the monthly trading volume reaching billions, the infrastructure has failed to keep up, and the interest drive of the Web2 business model has obvious deficiencies. Our mission is to solve these problems, develop the NFT field to the institutional level, and increase decentralization.”

https://www.theblock.co/linked/139617/nft-marketplace-blur-raises-11-million-in-seed-round-led-by-paradigm

• At that time, the largest NFT trading platform was OpenSea, and the founding team of Blur implied that the economic model of the OpenSea market platform was more inclined to the Web2 model. The so-called Web2 mode means that the interests of the platform are not properly bound with the interests of users, and users cannot be motivated by their contributions to the platform. This corresponds to the emergence of two token incentive NFT trading platforms, looksrare and X2Y2. Blur’s original mission is to establish a better profit-driven NFT trading platform with Web3 decentralization.

2/ 2022.5.5 NFT market Blur launch test version

• On May 5, 2022, according to the official Twitter, the NFT market Blur launched a beta version. Users need to invite five people to participate in order to obtain access rights. Blur allows users to view the sales of NFT in the existing market in real time, and allows users to put NFT on shelves in batches.

There are 10 Twitter lines in total, of which the first 6 are as follows:

1. Launch Blur Beta: to experience the first platform for NFT real-time trading.

2. Blur is building the best professional traders’ NFT market: the monthly trading volume of NFT has reached billions, but the current platform is slow and needs to be constantly refreshed.

3. The transaction should be real-time, lightning fast and highly reliable: we can’t find anything that meets our needs, so we have formed a team with the experience of MIT, Five Rings, Square and Brex to build Blur.

4. Blur Beta allows you to view the list and sales in existing markets in real time. There is no need to refresh.

5. Blur Beta provides a new perspective on your portfolio — see your NFT, activity list and income statement: when the opportunity comes, you can quickly take action by directly listing and delisting in batches on Blur.

6. Reveal is one of the most critical stages in the NFT life cycle. You no longer need to wait several hours to refresh the data. Blur indexes Reveal information faster than anywhere else and automatically completes it.

• When introducing the beta version, the Blur team highlighted four advantages of Blur: fast data update, convenient user query, and portfolio recommendations. Blur is an aggregator-type NFT trading platform, and its biggest advantage is the query.
• At this time, Blur did not achieve its goal of establishing “Web3’s benefit-driven model” when angel financing. The beta version is more like a more user-friendly and faster OpenSea. At that time, Blur’s innovation in the NFT market was just like the efficient layer2. It was bright and willing to try, but it could not shake the Ethereum main chain with a huge user base. Therefore, Blur did not raise too much waves at that time.

Forming stage

3/ 2022.10.20 The NFT market Blur was officially launched, and $BLUR tokens will be airdropped to users

• After five months of internal testing, the NFT market Blur was officially launched and will airdrop BLUR tokens to users. Users need to register an NFT in Blur within the next 14 days to participate in the air drop.
• Airdrop is a way to encourage traders to pay royalties. Blur is committed to strengthening the infrastructure of NFT, meeting the needs of professional traders on the NFT market, promoting the adoption of NFT by institutions, and promoting decentralization. Blur has received more than 14 million US dollars of financing, including Paradigm, Keyboard Monkey, LedgerStatus, 0xMaki, Santiago Santos, Zeneca, Deeze and other institutional and angel investors.

The official Twitter Blur, which was officially launched and airdropped, is the NFT market for professional traders. We started Blur because we want a faster NFT trading platform. 2/Blur is the combination of real-time market and aggregator. It allows you to browse and list markets, obtain information and manage portfolios faster than anywhere else. 3/In order to create Blur, we set up a team with experience in MIT, Citadel, Brex, Square and YC, and raised more than 14 million dollars from world-class investors and traders. 4/After 4 months of testing. Our aggregator has the second highest capacity in this field and is 10 times faster than other aggregators. 5/The Blur market itself charges zero market fees. In short, our market, aggregator and advanced trading tools are zero cost for everyone! 6/Blur is also the first market to implement incentive royalties.

• From it, we can see that after the internal test stage, Blur has three major advantages:

1. Trader-friendly high-speed aggregator
2. Trader-friendly zero-market cost
3. The creator-friendly compulsory high royalty

⚽️ Here, we should distinguish the concepts of marketplace fees and royalties:

Marketplace fees are usually fees charged by the NFT trading platform or market. These fees are used to provide services for the NFT trading platform or market, such as the display of NFT works, promotion of transactions, etc., which will be automatically deducted from the transaction amount and paid to the platform or market when the NFT is sold or transferred. The proportion and payment method of these fees are usually specified by the platform or market in its service terms. Royalties (royalties) refer to that when NFT is sold or transferred, the original creator or right holder of NFT can specify their share of income in subsequent transactions. When NFT is sold or transferred again in the secondary market, these royalties will be automatically deducted and paid to the original creator or right holder. Royalty is usually set in the smart contract by the original creator or right holder when the NFT is created and is automatically executed when the NFT transaction.

Therefore, the marketplace fees of the NFT market are the fees charged by the platform or market to provide the services of the platform or market, while royalties are the revenue shares set by the original creators or rights holders of the NFT market to protect the rights and interests of the original creators or rights holders when the NFT is sold or transferred again in the secondary market. The purpose, collection object and payment method of the two are different, but they are all the cost factors that need to be considered in NFT transactions.

• Compared with other NFT trading markets (OpenSea, LooksRare, X2Y2), Blur’s zero market cost enables users to trade NFT at a lower price, which is conducive to improving the liquidity of NFT trading.
• At the same time, higher royalties enable creators and publishers to obtain more profits in the subsequent transactions of NFT and are more friendly to NFT copyright holders.
• In short, Blur makes more profits for platform users with better “personality”, which is the most critical factor for Blur’s success.

4/ 2022.12.5 Blur starts the second round of airdrop

• The second airdrop of Blur in the NFT market was launched on December 5, 2022, and its scale will be much larger than the first one. All activities before that will be counted. The official release of the tips to maximize access to airdrops, including the more NFT is put on the shelf, the more you earn; Launching blue chip NFT is more effective; NFT can be put on other markets through Blur, etc. In addition, the official also suggested that users complete three sweeps in the Blur market before the second airdrop.

5/ 2023.1.3 Blur implements the minimum royalty on the immutable collections NFT series and airdrops BLUR tokens to the creators

• Blur implements the minimum royalty on the immutable NFT series, which will enable it to increase the royalties of Blur and prevent new markets from evading the royalties. Blur will first implement a minimum royalty of 0.5% for the immutable NFT series and will increase the minimum value over time (starting at 0.5%, then 1%, 1.5%, 2%, etc.). Blur will continue to levy all royalties on the series that use the filter registry and whitelist Blur. The new strategy applies to the existing/immutable NFT series that cannot use the filter registry.

Explosion stage

6/ 2023.2.14 Blur native token $BLUR online

• The Blur native token $BLUR in the NFT market was launched in the early hours of this morning, Beijing time. In the past three months, all traders in the NFT market, holders of Care Packages, or users who have placed NFT on Blur have had the opportunity to get airdrops. The user has 60 days to collect the airdrop token.
• The total supply of $BLUR tokens is limited to 3 billion, and 360 million tokens were issued in this airdrop.

7/ 2023.2.15 Gas consumption of Blur project rose to the third place in the past 24 hours, with more than 409 ETHs consumed

8/ 2023.2.16 Blur issued a royalty update policy, including encouraging creators not to use OpenSea

The Blur NFT market announced an updated royalty policy, which outlined some options for creators’ royalties, each of which will have different impacts on Blur, creators and OpenSea, mainly involving four situations:

If the collection does not disable Block, it will not be able to prohibit the zero royalty or optional royalty market. In this case, Blur will charge 0.5% royalty, while OpenSea is optional royalty;

Disable Blur, and any NFT project that prohibits Blur or other zero royalty/royalty optional markets will be subject to compulsory royalty enforcement on OpenSea, but the transaction can still be conducted on Blur, requiring a minimum royalty of 0.5%;

Blur recommends not to use OpenSea. Blur hopes that the creator will not use OpenSea. Any NFT project that does not use OpenSea will be subject to full royalties on Blur;

Blur requires OpenSea to cancel the setting of optional royalties for NFT projects on Blur. If OpenSea cancels this policy, NFT projects can collect royalties on both platforms at the same time. At present, NFT project creators cannot collect royalties on Blur and OpenSea at the same time. They can only collect all royalties on OpenSea or Blur at the same time, but not at the same time.

9/ 2023.2.21 The weekly turnover of Ethereum NFT on Blur platform reached 460 million US dollars, surpassing OpenSea and ranking first

• Blur generated 460 million US dollars worth of Ethereum NFT transactions in the past seven days, up 361% month-on-month. At the same time, the trading volume of OpenSea increased by 12% to US $107 million during this period. The third NFT market was X2Y2, and the trading volume was only US $11 million during the same period. In addition, in terms of daily trading times, Blur’s daily trading times have exceeded Open Sea for five consecutive days. Among them, the number of daily transactions of Blur on February 19 was 65359, and the number of daily transactions of OpenSea was 39835.

Blur’s winning magic weapon: platform motivation

Facing creators: encourage royalties

Blur hopes to encourage traders to respect royalties through their airdrop, and NFT order holders who implement high royalties will get more $BLUR airdrop, they explained in Mirror:

*https://mirror.xyz/blurdao.eth/2nba-2j0zHPrBX0iPSNGquZ9s_WotNH6B4e5usz85mM*

Traders want to maximize profits, collectors want to support creators, and creators want more royalties.

Today (2022.10.20), royalties are not enforceable in the chain, and traders have many options of zero royalties. For example, they can list non-royalty NFTs on Sudoswap and charge 0.5% of the transaction fee, while GEM also aggregates Sudoswap, which leads a large amount of traffic to their zeroroyalty list. Traders will therefore be more willing to buy NFT without royalties

Although royalty is not enforceable in the chain, we can also create an incentive structure to increase the royalty income in the ecosystem. Blur defaults to the highest royalty in OpenSea, LooksRay and X2Y2. Of course, when traders place orders for NFT in the Blur market, they can also customize the value of royalty.

Traders can list NFT on Blur and set the royalty as the platform fee of Sudo (0.5%). By doing so, they can obtain the same NFT profit and more $BLUR token airdrop.

Note: Traders who set the royalty above 0.5% will get more air drops.

Facing traders: three rounds of airdrop

Data: Comparison of transaction volume of NFT trading platform before and after three rounds of Blur airdrop

The week before Blur officially launched (2022.10.19) (the week of 2022.10.16), the trading volume of Blur (3483.41ETH) accounted for less than one tenth of OpenSea (41081.81ETH);

One week after Blur went online and made its first air drop (the week of 2022.10.30), the trading volume of Blur increased significantly (44626.2ETH), which has exceeded OpenSea (44213.39ETH);

One week after the first airdrop of Blur (the week of 2022.11.6), the trading volume of Blur declined sharply (17873.71ETH), less than half of that of OpenSea (39830.72);

In the month of Blur’s second air drop (2022.12.6), that is, in December 2022, the share of Blur’s trading volume continued to rise, and it was getting closer to OpenSea and had a great potential to surpass it;

The third airdrop of Blur, that is, the week of $BLUR uplink (2023.2.14) (2023.2.13–19), the transaction volume of Blur (87762.87ETH) has far exceeded that of OpenSea (17877.99ETH).

• It can be seen that Blur’s three air drops have injected vitality into its platform and attracted a large number of consumers.

The first round of airdrop

On October 19, 2022, Blur launched its first airdrop.

Airdrop target: Airdrop target is NFT traders in the past 6 months (under the background of NFT bear market).

Airdrop form: according to the number of NFT transactions in the past six months, get care packages with different levels (the higher the level, the more the number of $BLUR).

Airdrop mission: put an NFT on Blur.

1. This airdrop is an incentive for those who continue to carry out NFT trading in the past six months’ bear market, and a vampire attack on the major existing NFT trading platforms. But at that time, $BLUR was not on the chain. Participants in the Blur platform paid more attention to its high-speed aggregator service (ten times faster than Gem) and zero platform costs.
2. The token airdrop itself could not bring short-term benefits to the audience, and Blur did not become an NFT trading platform with a relatively large market value at that time. The holders of $BLUR were more wait-and-see, and continued to contribute to the activity of the Blur platform because they expected their own $BLUR to increase in value.

The second round of airdrop

On October 19, 2022, the rules of the second round of Blur airdrop were released at the same time as the first airdrop, and the airdrop was officially opened on December 6.

• Airdrop object: users who put NFT on Blur platform

Airdrop rules：

• The more NFTs listed in Blur, the more they get;
• Launching blue-chip NFT is conducive to more $BLUR (but contract security should be considered);
• NFT with active trading on the market is conducive to more $BLUR;
• Use all Blur’s list tools to improve rewards;
• There will be anti-witch measures, so it is meaningless to keep putting NFT on the shelves at unrealistic prices or putting NFT on the shelves without liquidity;
• Before the second air drop, perform at least three floor sweeping operations on Blur.

Loyalty rules:

• <50% loyalty — low luck
• 50–90% loyalty — medium luck
• 90–97% Loyalty — Good luck
• 97%+loyalty — very lucky
• Factors affecting loyalty: The price of NFT on Blur platform is lower than that on other platforms, and loyalty will be obtained.

The second round of airdrop focuses on the construction of the Blur platform itself: on the one hand, increase the quality of NFT in the Blur market; On the other hand, improve Blur’s competitiveness with price advantage.

Blur did not specify the specific calculation formula of NFT quality and price corresponding to short position acquisition, but this is very similar to the NFT listing incentive of X2Y2 platform. Its $BLUR airdrop logic can refer to X2Y2. The attraction logic of NFT listing in X2Y2 includes both the quality and popularity of NFT itself and the market acceptance of NFT price, which is the same as Blur. Therefore, in order to obtain more token incentives, platform users will sell NFT with higher quality at a lower price.

NFT listing incentive formula of X2Y2 platform (V1)

• K1: Reward for NFT listing in each block

P: The probability of NFT being sold (i.e. the popularity of NFT) is calculated by the following factors:

• Recent transaction frequency of NFT series
• The difference between the NFT listing price and the last transaction price, and the base price of the NFT series
• Whether the X2Y2 platform will approve the NFT to be put on the shelf (if not, P=0)
• Whether the NFT is a blue-chip project
• Whether the NFT has been on the market for a long time but still not sold

NFT listing incentive formula of X2Y2 platform (V2)

• In the second generation of the listing incentive formula, X2Y2 platform refined the probability P of NFT being sold, and further refined the variables that affect the popularity of NFT.

• Positive factors of NFT popularity: (The higher the value, the more popular and easier to sell NFT)

1. The total number of orders and trading volume of the series on the X2Y2 platform
2. Sales volume and turnover of this series on OpenSea in the past 1~7 days

• Negative factors of NFT popularity: (The higher the value, the more unpopular the NFT is and the more difficult it is to sell)

1. The total number of NFT single products of this series, especially when the total number exceeds 20000
2. The difference between the list price and the base price of the series

• Registration time: when the registration time is within two days, the longer the time, the higher the positive effect; More than two days later, the longer the time, the higher the negative effect.

The third round of airdrop

On February 14, 2023, Blur launched the third round of airdrop

Airdrop objects: all transaction users, care package holders, and creators. In addition, users who join their waitlist or participate in the internal test in May 2022 will automatically receive additional Blur airdrop allocation. The airdrop claim period is 60 days, and users who do not claim will miss the airdrop.

At the same time as this round of airdrop, Blur announced the rules of the next round of airdrop (starting from 3.14), which undoubtedly completely detonated Blur’s NFT market. Seeing that the recipients of this round of $BLUR airdrop have made so much profit, more people are willing to participate in the trial production of Blur.

$BLUR Tokenomics

Token allocation

• 51% to Blur community members (1530000000 $BLUR);
• 29% is allocated to core contributors in the past and future, with a release period of 4 years (867601888 $BLUR);
• 19% to investors, with a release period of 4 years (565633826 $BLUR);
• 1% is allocated to consultants, and the release period is 4 to 5 years (36764286 $BLUR).

Community allocation

• The BLUR tokens distributed by core contributors and launch partners will be awarded under the same schedule, and a four-month cliff period will be added.
• The consultant’s BLUR mission will be awarded within 48 to 60 months, with a cliff period of 4 to 16 months.
• The specific release rate of BLUR tokens is 40% of the total supply in the first year, 30% in the second year, 20% in the third year, and 10% in the fourth year.
• The economic model of $BLUR improves platform liquidity through continuous incentives to avoid the attenuation of platform liquidity after the release of one-time incentives. The model adopts multifaceted and multi-stage incentive measures, which are conducive to cultivating users’ long-term use habits, improving users’ loyalty and stickiness, and enhancing platform influence.

$BLUR’s value capture: community governance

Community governance based on $BLUR

Blur community proposal classification

Blur improvement proposals (BIP) can be divided into three main categories: core, process, and information.

1. Core proposal: proposals that need to be implemented on the chain, including the financial allocation. See Governance Permissions.
2. Process proposal: a proposal aimed at changing the process or implementation method. Such as changes to procedures, guidelines, decision-making processes, and Blur DAO tools or environments.
3. Informational proposal: a general guideline or information proposal for the community.

Blur community governance process

1. Phase I — research forum: all ideas and proposals will be initially published in the research forum to collect community feedback. All proposals have gone through the stage of improvement and opposition. If the proposal is welcomed and feedback is included, you can go to the next step.

• The time limit for discussion: at least 7 days

2. Phase II — snapshot voting: Phase II is conducted through snapshot voting without gas. Community members who are assigned to hold the minimum number of tokens can submit proposals and will be subject to a 14-day voting period. After 14 days, if the proposal is supported by a majority of votes and has at least 30M $BLUR affirmative votes, it can enter the stage of voting on the chain.

• Proposal threshold: 100000 $BLUR
• Voting delay: 2 days
• Voting period: 14 days
• Quorum: 30M $BLUR

3. Phase III — vote counting: this stage involves creating an on-chain proposal with code for execution. Tally can be used as an interface to interact with the governance contract. The proposal on the chain must be initiated by the member holding the minimum number of tokens and must be based on a successful second-stage vote. Once put forward, the voting will last for 14 days. If the proposal is supported by a majority and has at least 120M $BLUR affirmative votes, any member can queue up to implement the proposal and implement the proposal after a two-day delay in implementation.

• Proposal threshold: 30M $BLUR
• Voting delay: 1 block
• Voting period: 14 days
• Quorum: 120M $BLUR Implementation delay: 2 days

Blur Community Committee

In order to simplify some operations, some activities of the DAO are managed by the committee.

1. Security Committee: The Security Committee ensures that the BIP follows the above governance process. The Security Committee will prevent the adoption of proposals that do not follow the appropriate process.
2. Market Committee: The Market Committee promotes the upgrading of Blur market and aggregator contracts, and implements policy decisions around highly dynamic themes (such as royalties).
3. Incentive Committee: The incentive committee is responsible for managing the incentive of Blur users. The incentive committee can use 10% of Genesis supply as the budget of the incentive plan (300M $BLUR). The incentive committee can also lend part of the budget to provide market liquidity for BLUR (current: 21.9M $BLUR). If all the incentive budget is used, governance can supplement it by allocating more funds to the incentive committee.

What is the value base of $BLUR?

1. Although Blur’s NFT market has been extremely popular recently, $BLUR has also been launched on major exchanges and become a popular token, but considering carefully $BLUR itself, it may not have a value basis at present.
2. LooksRare and X2Y2, are the pioneers of the token incentive NFT platform, whose token value is based on the service charge of their platform. Compared with the two “predecessors”, Blur’s tokens can only be used for community governance at present. $BLUR is only a governance tool in the Blur platform that cannot obtain dividends. The expected market price of $BLUR is only related to the interest of market audiences in participating in the governance of the Blur platform. At present, the value of $BLUR is related to the financing obtained by the Blur platform, but not to the profit of the Blur platform. The value anchoring relationship between $BLUR and the Blur platform is not strong enough.
3. In the final analysis, the reason why $BLUR has no value base is that Blur does not have a good enough profit model. Zero platform fee is really a good gimmick, but how Blur can really achieve benefits other than financing and donation remains to be considered.

Future prospects of Blur

The NFT trading platforms of token incentives and aggregators have achieved great success in the early stage of coin issuance or online. Although they are all trying to surpass OpenSea like Blur, their lessons of later desolation are worth learning from Blur. The author believes that Blur needs to pay attention to the following points in order to achieve long-term success:

Focus on the market segment of “professional traders” and improve the service level of aggregators

• Airdrop is only a way to promote growth in the short term. $BLUR is not the savior of the Blur market. It is only the value symbol of the value token of the Blur platform. To keep the Blur platform going well, we need to find the unique features of Blur:

Pacman, the founder of Blur, said in an interview: Before Blur, the NFT market platform regarded NFT as a shopping experience, which was no problem for novices, but it could not meet the needs of senior traders seeking real-time order book, real-time order speed, depth chart, rapid mapping ability and real-time data update. Blur was designed to cater to the needs of professional traders from the beginning.

• Professional traders and giant whales are the biggest contributors to the liquidity of the NFT market, and they promote most of the NFT market behavior. Professional traders are the key target of NFT market services, but OpenSea integrated with Gem does not provide professional services for them very well. The market segment audience occupied by Blur is professional traders.
• In the face of professional needs, Blur should maintain its existing advantages of “high speed”, constantly optimize the platform algorithm, and avoid being overtaken by other aggregator services.

Expand the application scenario of the native token $BLUR, and enhance its practicality and finance

The original token $BLUR of the former Blur can only be used for community governance, with few application scenarios and poor financial attributes.

1/ Users prefer to treat tokens as assets rather than just tools.

Users hold tokens because they have revenue expectations. There are three ways to obtain revenue through $BLUR: governance/dividend/value-added:

1. Governance benefits of $BLUR: At present, $BLUR only has the application scenario of community governance, so the benefits can only be obtained by putting forward proposals in favor of itself. However, this path is extremely difficult and less successful$ It is difficult for BLUR holders to put forward and pass a proposal that is only beneficial to themselves (or the same class), and a large number of $BLUR are only held by a few wallets. It is difficult for Blur to achieve true decentralized governance, and it is more likely that Blur will still face the problem of governance monopoly.
2. Dividend income of $BLUR: It is difficult for holders to obtain income through governance. Blur should pay attention to stable and sustainable income, that is, distribute platform income to holders of $BLUR, so as to realize the wealth effect of “money can make money”.
3. Value-added income of $BLUR: Value-added income is the income from the sale of $BLUR, which does not involve the governance of token circulation within the platform. In order to improve the value-added income of $BLUR, Blur, on the one hand, should constantly polish the platform product to improve its influence and market expectations; On the other hand, we should reduce the selling pressure of $BLUR and avoid the market panic and depreciation caused by a large number of selling of $BLUR.

2/ Add $BLUR’s in-platform play:

• Blur did not give away for BLUR to circulate within the platform BLUR is only used for community governance, which makes tokens lack of internal circulation, and users cannot obtain more income by holding or pledging $BLUR, making the selling pressure on $BLUR huge. Blur should expand the application scenarios and holding benefits of $BLUR, enhance the applicability of $BLUR and the non-circulation in Japan, and reduce the selling pressure.

3/ Whether staged airdrop can become a long-term play method needs to be considered:

• Compared with direct token incentives for market behavior, staged airdrop is more helpful to enhance the suspense of users’ motivation and attract more users to participate in transactions. In addition, Blur’s unique blind box-playing method makes motivation acquisition more interesting. However, when the novelty and entertainment fade away, whether the unstable incentives will affect the sustainability of user market behavior remains to be observed and investigated for a long time. After all, in the fast-paced encryption market, not so many people are willing to pay and wait for uncertain benefits.

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