🐻 So...is this the end for OpenSea?

The NFT marketplace war is getting heated

AuthorAuthor

Rahul & Oleena
February 20, 2023

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.

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 😈.

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.

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.

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.

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.

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.

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 🤔.

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.

🚀The good

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.

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 🔥.

🐻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 🤦‍♀️?

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 🐜.

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