Glassnode: Blur hype could benefit Ethereum

Blur hype could benefit Ethereum as NFT markets shift away from OpenSea.

A resurgence of interest in NFTs amid the rivalry between OpenSea and Blur could potentially lead to higher MEV rewards, additional arbitrage opportunities, and the development of a new Ethereum infrastructure. This is according to Glassnode analysts.

Despite an overhang of regulations, the application layer of #Ethereum continues to flourish.

The #NFT market has seen competitor Blur take market share from leader OpenSea, driven by a strategy focused on pro traders.

Read more in The Week On-chain?https://t.co/Rh1nwJtuzE

— glassnode (@glassnode) February 27, 2023

To date, intensified competition among NFT platforms has not had a broad impact on Ethereum’s on-chain metrics.

In examining gas usage patterns, analysts found an uptick in NFT-related transactions. After a sharp drop into December, the indicator has nearly doubled over the past two months. The metric remains below the levels typical of last year’s boom.

More granular analysis showed that gas demand was driven more by Blur’s airdrop hype than by new collections from Yuga Labs, Doodles and Moonbirds.

Since the start of this year there has been a gradual but steady rise in gas prices to 38 Gwei. Previously, over nine months, the metric ranged from 10 to 20 Gwei, except for periods associated with FUD around Binance and the collapse of FTX.

The rising gas demand suggests that on-chain activity could resume in the near term, according to analysts.

Growth in demand for block space has yet to translate into faster Ethereum adoption. The number of new addresses remains about 40% below February’s levels from last year. The monthly average remains below the yearly figure, signaling negative momentum. Most protocols are effectively competing for the same audience, the analysts said.

According to Glassnode, Blur, launched in October 2022, captured 78% of NFT transfer volume. A leap from 44% was delivered by the February 14 airdrop.

OpenSea’s market share in the same period collapsed from 36% to 15%. On February 17, the former market leader revised its policy. This was preceded by Blur’s chief’s call to boycott the competitor.

Analysts attributed the limited impact of retaliatory steps on the balance of power to Blur’s focus on professional traders.

By offering rewards in utility tokens, the platform has successfully deepened the market, incentivising users to place bids to increase the frequency of NFT sales and improve the user experience. In terms of trades per trader, Blur exceeds OpenSea — from 3 to 6.5 trades, versus 2-3 for OpenSea.

Analysts point to a potential shift in the NFT market paradigm following reductions in fees and royalties by leading players. This could alter the perception of non-fungible tokens.

The success of Blur’s market strategy and its chosen audience is reflected in a higher average NFT sale value — from 0.3 to 1.3 ETH, versus 0.2 ETH for OpenSea.

In a note on 21 February, Blur announced the distribution of additional 300 million tokens in the second season of the airdrop. The size of the reward package will depend on loyalty metrics.