NFT market manipulation? CryptoSlam claims suspicious activity on Blur

Despite its recent success, Blur’s journey to becoming the largest NFT marketplace is far from over, and gauging its current and future success is a complex question.

NFT markets are currently embroiled in fierce competition for customers, with companies cutting fees and charges to attract and retain users. This competition has led to the gradual weakening of royalties, a crucial source of revenue for many NFT creators who feel let down by the marketplaces that once supported them. This “race to the bottom” is significantly disrupting the entire NFT ecosystem.

Read more: Why we need more NFT royalties and better marketplaces

Is Blur volume real?

Blur has overtaken OpenSea in the overall value of sales made through its platform, but the data has sparked debate over its true significance.

One of the factors contributing to Blur’s success is its rewards program, which awards points to traders for listing and bidding on NFTs. These points can be exchanged for BLUR tokens, with the number of tokens received being based on the number of points accumulated.

Since there are no fees or royalties in the market, the only obstacle preventing users from playing the system and earning tokens by purchasing their own lists with a different wallet is the need to pay a fee. essence.

However, last month CryptoSlam, an NFT sales data tracker, claimed that this is precisely what is happening on Blur. In an email to its subscribers, CryptoSlam said only 1% of high-value traders are responsible for the bulk of trading activity on the platform.

As a result, CryptoSlam took action and removed hundreds of millions of dollars worth of Blur transactions from its data, citing “market manipulation”. It has since implemented an updated algorithm that filters out “suspicious” sales.

During the period from February 14 to February 25, CryptoSlam identified over $577 million in NFTs traded on the platform.

According to CryptoSlam, Blur’s sales data “distorts” the NFT market. The potentially man-made surge in sales propelled the industry’s overall sales volume to its highest level since January 2022, leading some to believe the market was rebounding from a significant drop in activity over the past year.

Data engineer Scott Hawkins of CryptoSlam said in an interview with Forkast, “What we’re seeing is that this is artificially supporting sales volume in a very hypocritical way for the whole NFT market.”

Additionally, OpenSea still has more users than Blur, with a user base comprised of a smaller group of more active traders. Blur has only 113,886 users in the last 30 days, compared to 294,146 for OpenSea. Critics also claim that a small percentage of wallets on Blur are responsible for the majority of transactions.

The future of blur

Details of how the BLUR token will be valued in the future are unclear, and it is unclear how it will gain in value over time. Currently, BLUR functions as a governance token, but since Blur is a centralized entity, it will gradually have to hand over control to token holders of a newly created DAO. This could be why US users were barred from the airdrop, despite the token being available on major US exchanges like Coinbase.

The Blur DAO will be responsible for governance of important aspects of the platform, such as establishing protocol value accumulation and distribution. This could include determining the protocol fee rate (up to 2.5%) after 180 days and providing Treasury grants to further develop the market. These choices will play a vital role in shaping the future growth of the platform and determining whether Blur can effectively compete in the marketplace, now and in the immediate future.

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