NFT trading volume on Ethereum has crossed the $1 billion mark for the first time since May 2022. This is the third month in a row that volumes have increased, indicating a turnaround for the NFT market, which suffered greatly during last year’s downturn.
Data from DappRadar shows that Blur leads the way with over $1.3 billion in trading volume on its own. The upstart NFT marketplace is followed by OpenSea, with less than a third of this figure at $442 million.
Interestingly, it’s the competition between these two markets that has pushed NFT trading volumes up. Blur, for its part, has done the most to oust OpenSea as the preferred destination for NFT traders. Having launched last October, the marketplace has come up with a bunch of incentives aimed at attracting users to its platform.
The first was dropping the mandatory payment of creator royalties, a source of revenue and motivation for creators. The trick worked and forced marketplaces such as OpenSea to follow suit. However, Blur’s 0.5% royalty fee is seen as nominal and has caused controversy within the NFT marketplace industry. The decision hasn’t sat well with influential figures within the Web3 community. According to Yat Siu, chairman of Animoca Brands, creator royalties must be protected at all costs.
Speaking to the press, he notes, “I get the sense that Blur is not necessarily anti-royalties.” But what they and other marketplaces are doing is “trying to capture market share.”
Blur’s Rewards Structure Has Boosted its NFT Trading Volumes
Blur also introduced its $BLUR tokens rewards strategy to lure collectors to its platform. This worked like magic as traders rushed to make the most of its opportunity. The first tokens arrived last month and saw users rewarded with 360 million $BLUR, after which the platform announced plans to drop another 300 million tokens to prolific traders.
Unfortunately, indications show that most of Blur’s trading volume may be the result of wash trading as traders race to boost their own rewards allocation. As of February, CryptoSlam, a leading NFT tracking platform, attributed 80% of Blur’s volume to wash trading. As a result, it intends to remove the statistics as it “misrepresents the current NFT market and puts traders at risk who often chase projects’ rising action.”
CryptoSlam Update: We’re Cleaning Up the Wash Trades
We’re taking action to remove nearly $500 Million in wash trades, retroactively as well as applying an updated algorithm to prevent future wash trades.
This comes after they took similar action https://t.co/ArHdTqRe08… https://t.co/9OHvQKhgLe
— CryptoSlam! (@cryptoslamio) February 24, 2023
While growing volumes are a good thing for the NFT market, these latest figures need to be taken with a grain of salt.
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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.
Basil is an avid fan of blockchain technology and all its innovations, and he is passionate about sharing this narrative with his audience. He has spent over five years in the crypto space, specializing in research and creating Web3 content for various media outlets around the globe.
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