In-depth discussions on Blur and potential investment opportunities

特邀专栏作者

2023-03-06 12:30

This article is about 11714 words, reading the full article takes about 17 minutes

I have seen that Blur has a deep understanding of user needs in product details, and I have also seen that it is on the road to subverting the original NFT trading paradigm.

Author: Jessica Shen, Investment Manager, Mint Ventures

This article first discusses Blur's current opportunities and challenges, then discusses what we can learn from Blur from the perspective of Web3.0 entrepreneurship and investment, digs into the details of the project, and finally briefly discusses potential investment opportunities around Blur.

Blur's Challenges and Opportunities

challenge

1. Lack of underlying technological innovation to improve liquidity

To a certain extent, Blur uses the token model to stimulate liquidity, but lacks the disruptive innovation of the underlying technology, and there is a long-term possibility of being copied or even surpassed by competitors. At present, Blur's advantage lies in its product insight into the real needs of users, and it has launched convenient, easy-to-use, and intuitive products. users, but the NFT liquidity problem has not been fundamentally resolved in the long run. If a competitor launches a model with higher token incentives based on Blur with faster speed, more intuitive UI, and more professional products, we may see the competition between SushiSwap and Uniswap back then.

Recently, Gem V2 is also in the internal testing stage. After experiencing the product, the author feels that the product details have been optimized on the basis of Blur. Although there is no certainty about whether Gem will issue coins in the future, from a product perspective, the update of Gem V2 can already rival Blur in terms of information refresh speed, intuitive display, and offer function. "Limited time" asking price, the function of asking price for a certain feature. The demand for the feature asking price function is very certain. Many users who want to buy Otherdeed with Koda have repeatedly requested similar functions for Blur, and Gem V2 has been launched in advance.

The moat of Web3.0 products is a question that many investors and projects have been thinking about. Blur’s current moat cannot be said to be the product itself or the token model. The user stickiness of Web3.0 is a great challenge to many products. In an open source code environment, vampire attacks are a minefield that may detonate at any time. On the other hand, some Web3.0 protocols that can cross bull and bear, such as Curve, Uniswap, Aave, Compound, etc., in addition to products that meet market demand, have a stable token model, a progressive team, a continuously expanding ecology, and user-to-protocol Safe trust has played an important role in the long-term retention of these protocols in the market. Whether Blur can combine the above-mentioned successful factors in all aspects still needs to go through the test of time. Only the improvement of the UI and the token model, and it is difficult to get rid of the Blur of the money printing machine model. It also needs to tap more innovations in technology or protocol layers to fundamentally build a moat in order to maintain a long-term dominant position.

2. There is a risk of losing users and trading volume in future parameter adjustments

The current transaction fee is 0%, the minimum royalty is 0.5%, and royalties are only enforced for some NFTs. This rule is a short-term Go-To-Market strategy. In the long run, it is impossible for the protocol to maintain 0% transaction fees. In the future, if Blur wants to support NFT creators and communities more, the flexible royalty policy may also be adjusted in the future . These adjustments fundamentally increase the cost of traders and increase the friction of the NFT market. When the cost increases and Blur’s token incentives disappear, users will still vote with their feet to choose a lower-cost trading market. Blur Whether the cost advantage at that time still exists is particularly critical for its competitive position.

3. Changes in the competitive landscape after the token subsidy ends

Many Web3.0 projects have to face the limited issuance of tokens and the day when the subsidies will eventually be distributed. If the money printing machine model continues, it will bring a lot of selling pressure to the tokens. Blur will also have an airdrop distribution end. If the protocol design and token model maintain the status quo, then it can be expected that the liquidity will be reduced a lot at that time, and the market will question whether Blur can compete with OpenSea, which will have a negative impact on expectations and valuations. drop impact. The sustainability of the token subsidy model will also be one of Blur's potential risk points.

4. Airdrop expectations for the second quarter are too high

The airdrop of tokens in the first quarter gave many NFT players extremely high rewards. The high market sentiment is conducive to the market's confidence in the project, which will be directly reflected in the token price. However, we found that the total allocation of token airdrops in the second quarter was only 10%, which was less than 12% in the first quarter, and more users are expected to participate in the "airdrop" activity, including many professional gold-making studios. According to the official Token economics document, it is inferred that the unlocking of the airdrop tokens (10% of the total amount) in the second quarter will be completed in the fourth quarter of 2023 (the specific unlocking and airdrop information are subject to the official announcement).

. In the case of obviously too many monks and too few porridges, users may feel the gap between reality and expectations when the airdrops are released in the second quarter. At the same time, if the token price shows a downward trend under the expectation of a large number of airdrops, it may bring greater market FUD sentiment, increase the sense of emotional gap, and cause users and token holders to shake their confidence in the project.

5. The ability to capture token value is weak

route maproute mapopportunity

opportunity

1. Improvement of macro market and NFT market

NFT market value and trading volume are currently concentrated on Ethereum, which is highly correlated with the Ethereum market situation and the overall trend of the cryptocurrency market. As the cryptocurrency market continues to improve, the NFT market is expected to pick up. Although the market will continue to fluctuate and bottom out before the arrival of the next bull market, the NFT market has already experienced various sharp declines in 2022. The vitality of blue-chip NFT projects has become stronger after various crises. Yuga Labs and other blue-chip project parties The various new activities and new expectations brought to the community are also expected to continue to bring new narratives to the industry.

NFTGo is in《NFT Annual Report 2023 》As mentioned in 2022, the total number of NFT traders on Ethereum for the whole year is 1.87 M, while Dune@sixdegree data shows that the number of active addresses on Ethereum will reach 48.16 M in 2022, which is more than 25 times the number of NFT traders. During the bear market, Blur’s airdrops and issuance of coins have made many users outside the NFT circle more willing to join in the trading and hype of NFT. Blur has also gained a lot of attention in the early stage of the project. If Blur maintains its leading position in the industry, with the arrival of the bull market, the top spot in the NFT trading market will bring a boost in valuation, which may bring a boost to the price of $BLUR. room for further improvement.

2. The competitive advantage of the track facilitates the horizontal expansion of business

Since Blur launched in late October, thecumulative trading volumeexist

existBlur RoadmapIn the article, the author interpreted Blur's thoughts on ERC 1155 field transactions, opening the fee switch (F-Switch), and the expansion of the liquidity project (Liquidity Project). The "vague" roadmap seems to imply that Blur will further expand in the future The horizontal expansion of business in the NFT ecosystem gives a glimpse of Blur's ambition to become a one-stop NFT infrastructure (only my interpretation of Blur's roadmap does not represent the official idea of the project). There is also an application form for NFT API on the official website. Many NFT protocols and products are also waiting for Blur to open its API port to make NFT quotations more accurate and the liquidity of transactions and clearing better.

OpenSea recently lowered transaction fees and changed the rules for flexibility royalties, making the market more convinced of the threat Blur poses to OpenSea. From a horizontal comparison between the two, OpenSea is more similar to a "multi-chain NFT large-scale supermarket", focusing on the first-level issuance of NFT and the display of different types of NFT. It is suitable as the first stop for NFT novice Xiaobai to log in to NFT, while Blur is positioned in "NFT Professional Trading Tools" focuses on professional-level trading and is suitable for the market of professional players such as NFT veterans, giant whales, and market makers. The positioning of the two is different, which leads to the fact that OpenSea still has the largest number of traders, but the overall proportion of secondary trading volume of NFT is higher. After Blur's airdrop in the second quarter ends, the trading volume and number of traders of the two companies still need to be continuously monitored, which will be important indicators of the competitive landscape.

3. There are various business growth and token value-added possibilities in the token economics model

Essentially, the biggest difference between Blur and OpenSea is that Blur is an NFT trading market with an embedded token economy system. Chris Dixon (a16z partner) and Fred Ehrsam (Paradigm founder) mentioned in an interview in 2017 that tokens are a general solution to the expansion problem of (Internet platform companies), when a new network platform is not enough When there is a lot of network value, use financial incentives to attract early seed users, and then the value of this property will gradually narrow because the network value has gradually increased. This is why Blur can overtake on a curve in such a short time and is on par with OpenSea. The NFT trading market with a built-in token model enables each participant (founding team, NFT community, users, market makers, etc.) to directly obtain incentives on this platform and share the network effect dividends generated after co-building products. In the future, token airdrop incentives and community incentives will continue for a period of time. Blur’s gradually accumulated user data and network effects will strengthen the community’s trust in the product and user habits, thus continuing to create a positive cycle.

From a micro perspective, the simple token economics document released by $BLUR leaves many open options for the decentralized governance of the NFT community. Among the governance mechanisms, Blur sets thethree committeesTo coordinate the governance process, the Incentive Committee (Incentive Committee) is responsible for managing the incentives for the community. The scope of work includes providing market maker liquidity, community token incentives, etc. % token airdrop, 10% token airdrop in the second quarter), you can apply for more incentive distribution through governance (the remaining 39% community tokens).

founder@PacmanBlurIn the interview, I mentioned thinking about the value capture of tokens. Discussions have emerged in the market about the Blur protocol adopting the Voting Escrow model for more value capture. We also learned that Blur intends to develop towards the veToken model (but the specific progress is unknown) In the future, if the value of the token captures the income of the agreement, and the agreement maintains a leading position in the trading market, then the valuation of the token will have more room and momentum for growth.

secondary title

Web3.0 Entrepreneurship

Many details of the product design reflect the team's deep understanding of the pain points of the NFT market and a clear understanding of user needs. Blur's thoughtful product design has attracted a large number of frequent NFT traders and giant whale users. The accurate marketing incentive model and airdrop expectations for NFT liquidity have focused the attention of a large number of Crypto users in non-NFT fields. Continuous airdrop expectations and functional updates It constantly shows Blur's ambition to further "change user habits" and subvert OpenSea's centralized platform.

1. Clearly understand market demand and create products that truly solve market pain points

Blur officially launched on October 19, 2022, and has received rave reviews since then. In addition to other trading markets, aggregators also have airdrop expectations, mining mechanisms, etc., Blur's main product features are speed, 0% transaction fee (which may be increased later), and collection bidding function (Collection Bidding).The extremely simple functional details have raised the efficiency of the NFT trading market to a higher level at the product level. The combination of Blur's multiple product details and the early Go-To-Market operation strategy made it seem that the opponents never really understood the users and the market.

speedimage description

Image Source:Blur Mirror

This seemingly unremarkable function is extremely important for professional traders and frequent traders, and it is also the key to Blur winning users. In the FT token trading market, the price refresh rate is no longer a sensitive point for users, because we default that the data update speed of each exchange is similar, which will not cause a large arbitrage difference, but in the NFT trading market, the market has to Accept the slow quotation information of several original trading platforms.

cost

cost

Blur also tries to provide users with an environment with the lowest transaction costs. Cost reduction is one of the most direct solutions to liquidity. Transaction fees, royalties, Gas Fee and the price of the NFT itself constitute the main costs for traders. In addition to liquidity, users are also extremely sensitive to transaction costs. The market will vote with their feet and choose the platform with the lowest cost. This article discusses transaction fees and royalties.

Transaction fee (currently 0%)

Since its launch, Blur has been focusing on 0% transaction fees, which is an extremely powerful blow to the transaction fees of OpenSea 2.5%, X2Y2 0.5%, LooksRare 2%, and SudoSwap 0.5%. For sellers, it is true that the handling fee can be passed on to the buyer through the NFT’s own price, but reducing the transaction handling fee itself has played a role in facilitating transactions in the market, shortening the distance between buying and selling orders. In the future, Blur may increase the transaction fee under the resolution of the community, but it will still maintain this level in the short term.

Royalty (minimum 0% initially, adjusted to 0.5% minimum)

When Blur is publicly launched in October 2022, creator royalties will not be enforced. Sellers can set the minimum royalty to 0%, or follow the original creator’s royalty plan, but for traders who pay 0.5% royalties, Blur will clearly Give more airdrops to encourage this behavior. The implication is that Blur supports creators, but also knows that lower royalties are also the key to facilitating deals. In the later period, Blur adjusted the royalty rule to the minimum setting of 0.5%. Although the standard line rose, it did not cause such a big controversy in the community when X2Y2 repeatedly changed the royalty rule.

After the token was issued, Blur also quickly announced new royalty rules, from the perspective of attracting creators, countering a series of "sanctions" policies implemented by OpenSea on Blur.

Recap:

November 2022,OpenSea launched the trading market blacklist (Blocklist) tool(Multiple trading markets that do not enforce royalties, including Blur), NFT creators can choose to use this tool to block transactions on platforms that do not enforce royalties, but the advantage is that OpenSea will Collections are mandatory to collect royalties. NFT collections that do not adopt this blacklist can be traded in multiple trading markets, but OpenSea will not enforce royalties on buyers. This move puts many creators in a dilemma. If they choose OpenSea’s blacklist, the royalty income ratio will be guaranteed but it will sacrifice NFT’s liquidity opportunities in trading markets such as Blur and X2Y2. If they choose the liquidity of multiple platforms , have to sacrifice part of the royalty income.

In January 2023, Blur used OpenSea's Seaport protocol to cleverly bypass the policy of the above-mentioned blacklist tool, which means that newly issued NFTs can be traded on Blur while adopting the OpenSea blacklist tool. In this way, NFT creators can collect full royalties on OpenSea, and can also trade on Blur at the same time.

Blur's latest royalty policy provides NFT creators with 3 options:

(1) Option 1: New NFT collections that do not use the OpenSea blacklist tool, and Blur enforces a minimum 0.5% royalty protection for such new NFTs;

(2) Option 2: A collection of new NFTs using the OpenSea blacklist tool, Blur also implements a minimum 0.5% royalty protection for such new NFTs (because Blur currently bypasses the OpenSea blacklist through the SeaPort protocol);

(3) Option three: If NFT collections are completely prohibited from trading on OpenSea, Blur will enforce full creator royalties (Full Royalties);

In addition, Blur also ironically gave the "choice four" that is not yet executable: if OpenSea stops the blacklist tool, Blur will implement the complete creator royalty policy together with OpenSea, which can be seen as Blur calling OpenSea to cancel Blacklist Policy.

Image Source:

Image Source:Blur Mirror

UI display:Blur provides NFT users with more comprehensive transaction information, reduces the time cost for users to switch between different platforms, and further improves user experience. The fine optimization of the data dashboard provides better assistance for NFT traders' decision-making, which is conducive to the improvement of transaction frequency. promote.

NFTGo in its recently released《NFT Annual Report 2023 》It is concluded that the habitual pattern of NFT professional traders has changed. From the original discovery of projects on social media, and then to OpenSea to complete the transaction, it has developed to the discovery of projects, and then conducts investigations through data analysis platforms and aggregators. trade.

Blur's UI interface is similar to Bloomberg, providing NFT traders with multi-dimensional transaction information, including historical transaction trends, transaction depth, pending order information, asking prices, and basic information about the NFT collection itself, including total issuance, royalty ratio, holding proportion etc. The unobstructed UI interface makes traders no longer need to compare the information of other trading markets and data analysis boards many times, and there is no need to jump to multiple pages to obtain the information needed to judge the transaction. In terms of design, Blur's professional presentation reflects the team's nuanced understanding of NFT traders.

From a horizontal comparison, Gem, which belongs to the aggregator track, and Genie, which has been integrated into Uniswap, are far behind in terms of product design. Traders still need to jump to multiple interfaces to obtain data and information. The seemingly more comprehensive information display actually has high information redundancy. The time for users to choose and wait increases transaction friction and reduces transaction frequency. Among them, the display interface of Gem directly integrates the data display of Dune Analytics and the map function of the holder address of Bubblemaps. The comprehensiveness of the data is good but the intuitiveness is not good, and the authenticity of the data is completely dependent on the third party.In contrast, Blur only provides limited information and data, but focuses on the key information of NFT transactions, and the information is more intuitive and readable. The Blur team's understanding of the trading habits of NFT users and the pain points of the NFT industry are reflected in the professional and thoughtful product design.

Blur's ambition to continue to change the transaction paradigm of the NFT industry can be seen from the recent UI optimization.The current UI design simplifies the user's transaction process, but its business layout currently only covers the trading market, and the focus is more on the secondary transaction of NFT. Initial NFT users will still use OpenSea as the first place to enter the NFT world. station, because OpenSea has the advantages of being more NFT Xiaobai-friendly, multi-chain, and multi-variety. On February 17, 2023, Blur updated to add the "Trending" (trending trend) Kanban function, users can directly see the recent hot NFT projects on Blur, and the more advanced and earlier trading signals of the NFT market are also included in the display scope.

Image Source:

Image Source:Blur Official Website BAYC Collection

Collection Bidding Function (Collection Bidding):In addition to having the same functions as other competing products such as Sweeping and Bulk Listing, Blur’s bidding function for an NFT collection has won the favor of many NFT professional traders.

The bidding function on other trading platforms can only be aimed at a single NFT or does not have this function at all. The abstract analogy to FT transactions means that only the sell order information in the market is transparent and clear, but traders' demand for buy orders for a certain NFT collection There is no clear channel of understanding of the situation. Blur's aggregate bidding functionality fills this critical market information, functionality gap. When designing this function, Blur also turned on the stolen NFT protection function (Stolen NFT Protection) to avoid the situation where stolen NFTs are bought by bids.

The Bid function allows users to directly bid with ETH funds, eliminating the need to convert ETH to WETH on some platforms and then conducting transactions, which further saves users' transaction time.

2. Niche market product positioning, but mastered the core users of the market

Because the UI interface resembles Bloomberg and has a code style, Blur's Pro-Trader-Friendly (professional trader-friendly) features are very distinctive, but this is also positioned in the niche market serving NFT professional traders and NFT Flippers with its initial products ( Niche Market). In the NFT industry, a pattern of blue-chip PFP assets on Ethereum, supplemented by a large number of NFT assets at the waist and tail has initially formed, and a group of experienced NFT speculators, professional traders and market makers have gradually formed in the user group Although this group of people is not the first-line force to promote NFT "Mass Adoption", they have a large number of blue-chip assets, professional experience in NFT hype/Flip, and are the main source of industry liquidity. This part of the niche market is also the most active player in the NFT market. Mastering this part of users also means mastering the core user group in NFT. The NFT user market is difficult to adjust. Blur did not choose a simple and cute UI design that is friendly to more novice users and new users. It chose a code-style interface kanban to cut into the professional market. High-value trading users with stronger liquidity motivation. With the growth of users in the later stage, new users are also expected to gradually transform into high-level players.

For NFT whales, high-frequency traders, NFT Flippers, professional traders, NFT funds, and NFT market makers, there has been a lack of one-stop tools and products in the past. Blur has solved this problem for professional players. One pain point, the professional detailed design brings a brand-new user experience, and has gained an excellent reputation in the community, and has received word-of-mouth praise from users.

3. The growth-first strategy quickly conquers cities and territories

exist@PacmanBlurexistopen interviewAs mentioned in the article, Blur pays more attention to early user growth and creation of products that bring real value to users than short-term zero-agreement revenue. Good products will not worry about long-term monetization. The speed and more intuitive products compete for users.

Image Source:

Image Source:OpenSea Twitter

4. In terms of operational skills, the continuous airdrop expectation perfectly matches the rhythm of new product features, and firmly locks in users and market attention

Blur's operating strategy before issuing coins is also worth learning for all entrepreneurial teams. The "airdrop culture" in the cryptocurrency field has always been able to attract more traffic and attention, but Blur is a relatively successful case that can use token airdrops as a tool and maximize its value.

Certainty:The airdrop in the first quarter before Blur’s coin issuance was divided into three rounds, and users were “trained” to use the Blur platform in stages. Airdrop 1 was given to some users who participated in the internal test, Airdrop 2 was given to users who placed orders, and Airdrop 3 was given to users who asked for prices. . Except that the first round of airdrops was announced after the closed beta, both Airdrop 2 and Airdrop 3 announced the rules before the event airdrops. For users who usually close their eyes and blindly submit airdrops, the certainty is higher and the directionality is higher. It will also be stronger. It can not only realize the functions that Blur wants users to experience (pending orders and collection price functions), cultivate users' usage habits, but also enable users to "earn money for their work".
progressive:The three rounds of airdrops in the first season are each larger than the previous round (the second round is 1-2 times the first round of airdrops, and the third round is 10 times the second round), giving more More incentives for users who enter the market later. In addition, when Blur announced the third round of airdrops, it launched the exclusive "Collection Bid" function at the same time, and also gave users of this function the most rewarded airdrops, and used the airdrop incentives to promote new product features and users Habit reinforcement. The "Collection Asking Price" already filled the gap in the market, and the ingenuity of the team's operation made the promotion of functions easy.

It’s not to say that “airdrops” are all effective and beneficial, or that copying Blur’s airdrop model will definitely succeed again. The operational success of Blur lies in the team's deep understanding of users' expectations for airdrops, and using the expectations to design a good rhythm-matching new function for publicity, which has accumulated into a long-term community binding relationship.

5. Token Economics demonstrates the team's long-term determination to build products and the vision of DAO governance

The token economics of $BLUR embodies the team's long-term construction project goals and the vision of decentralized governance. founder@PacmanBlurIt has been mentioned many times in Twitter Space that Blur’s token economics design is jointly designed by the team and investor Paradigm, drawing on the token economics models of many other DeFi projects (including Uniswap, GMX, dYdX, etc.) . It can be seen from the token economics document that the team is well aware that tokens are a bridge connecting the community, and most tokens (51%) will eventually be distributed to community participants, as shown below.

🎉 51% Blur Community Members = 12% 1st Season Airdrop + 10% 2nd Season Airdrop + 29% Other Contributors Grants/Community Projects/Incentives etc

Image Source:

Image Source:Blur Official Documentation

Web3.0 investment

1. What urgently needs Mass Adoption in Web3.0 is not users, but excellent entrepreneurs and developers

NFT was born in 2017. It was proposed by Dieter Shirley, the founder of CryptoKitties. In order to let the market distinguish the difference between CryptoKitties and ERC 20, the concept of NFT non-homogeneous tokens was introduced to the market. OpenSea was established in 2018, Gem was established at the end of 2021, X2Y2 and LooksRare were born in 2022, and the market value of NFT reached 2022Highest level of $34.6 billion (May 2022)However, the most basic centralized information display of buy orders in the NFT trading platform was not launched to the market by Blur until the fourth quarter of 2022, which made me realize once again that there are too few outstanding entrepreneurs in the industry. It is not users who urgently need Mass Adoption, but excellent entrepreneurs and developers.

Blur's founder recently lifted his "anonymity" status to publicly reveal his past experience. From various interviews and public information, we can know that@PacmanBlurWith an engineer education background, his first venture in 2016 became one of Y Combinator's 2016 winter batch projects. After that, he met the co-founder of Blur when he went to MIT to study mathematics and computer science. In 2018, when they were still studying at MIT, the two started a business together and successfully sold the company in 2021. After finishing the last period of entrepreneurship, the two soon started the Blur project, because@PacmanBlurI was fascinated by NFT transactions in 2021, but as a user, he felt that the market lacked a trading market and NFT infrastructure that was thought and designed from the perspective of traders, so he came up with the idea of Blur. Blur's 10-person team is also full of talents, including 7 engineers from Citadel, Five Rings, and Twitch teams, and 1 designer from Square and Brex. In general, the Blur team has experience in the development of trading companies in the traditional financial industry, large-scale streaming media platforms, and design experience in well-known companies, which is a good foundation for Blur to launch products that are popular with users. The cooperation experience has also paved the way for further cooperation, management team and financing.

2. Products that solve the real pain points of the industry are not afraid of competition in the Red Sea

The Blur team was established in January 2022, internal product testing began in May, and product public testing began in October. The project will issue coins about one year after its establishment. The pace of the project is not very fast in the cryptocurrency circle, but it can be seen that the team has a clear product idea from the beginning, and has always maintained the rhythm of developing products and launching new functions in the bear market environment. Although many NFT trading markets took the lead in seizing the market before Blur went online, the pain points in the industry have always existed and have not been solved by existing competitors.For entrepreneurial teams, track competition is an aspect that needs to be considered, but according to the first principle, the focus should be on "solving industry pain points". If the product is good enough, it can change the original competition pattern of the track, accumulate a lot of knowledge, and even lead the trend and development of the industry.

It is said that "time, place, and people" are needed to make things happen. Blur did not choose to launch products at the perfect time (bull market), and did not even wait for the bull market to come. But judging from the results, Blur has won a phased victory, and even became a project that independently created narratives during the bear market.Regardless of whether the product is launched or the time of coin issuance is in a bear market or a bull market, there will not be a big difference for sufficiently good products and teams, but there may be a huge difference for ordinary projects. This is the confidence that the author has observed in all successful entrepreneurial teams.

3. Team cognition determines the upper limit of the product

The collection bidding function (Collection Bidding) fills in the gaps in market information.Blur’s aggregated asking price function is a key feature to enhance liquidity, filling a huge information gap in the NFT market. One of the problems faced by NFT traders before is that the supply is clear but the demand is not clear, that is, users can only clearly understand the status of pending orders in other trading markets/aggregators in the past, but they cannot grasp the asking price and demand of NFT, such as in the order book Online traders can only see the information of selling one and above. Blur's collection price function is unremarkable, but it provides users with an intuitive and clear order price situation. When the information gap is filled, the user's desire to trade is fundamentally improved. This function also greatly facilitates the buying low and selling high transactions of users (giant whales, frequent traders, professional traders, market makers) who have a large amount of NFT hot money.
Tokens incentivize "liquidity", not "trading volume".in multiple@PacmanBlurHe mentioned in the Twitter Space and interviews that he participated in that the difference between Blur and some other token economic models in the trading market is that it encourages "liquidity" rather than "trading volume", and the latter often falls into the trading volume ( Wash Trade) inflates the trading volume. As an NFT trading market, the definition of "good liquidity" is that sellers can sell quickly with pending orders, and buyers can quickly buy at asking prices. The solution given by Blur is to incentivize tokens to the pending orders and asking prices close to the floor price, that is, those users who help "match transactions" in the market. It can be understood by analogy that more users are encouraged to concentrate their funds to "buy one" and "sell one". When the price fluctuates, the transaction will naturally occur, and the liquidity incentive will eventually be transmitted to the transaction volume, but it is obviously more "incentive" than directly incentivizing traders. organic".
In the early stage, growth was the focus, and cash realization was not a big problem for good products.For 0% transaction fees resulting in zero income for the agreement in the short term,@PacmanBlurThe answer is that in the early stage of the project, more attention should be paid to user growth and product polishing. Similar to Alibaba’s early strategic approach, it will be easier to think about monetization methods after the project reaches an absolute dominant position. The founder's "grow first, then cash out" strategy may not be applicable to all entrepreneurial projects and teams, but it shows their patience and confidence in long-term construction projects.

4. Investment is a process of mutual selection and mutual growth

One of the reasons why many people are optimistic about Blur is that there is an outstanding Paradigm in the background of the management, but the author thinks that this combination is "mutual selection" and "growth together". The team's vision of growth first and then income is consistent with Paradigm's long-term investment style, like a combination of two "long-termists". In terms of token economic model design, Blur also cooperates with Paradigm. It is believed that in the process, a lot of Paradigm research team’s previous experience in token design in other projects such as Uniswap was drawn upon. The process of the two excellent teams giving full play to their respective advantages, helping each other grow, mutually benefiting each other, and bringing value to each other is worthy of reference and learning by practitioners.

Reflection In the work of studying Web3.0 first-level projects, two extreme stories are often heard: (1) a certain project A: various well-known cryptocurrency funds compete for shares; (2) a certain project B: no one cares about it , financing failed for N months. In the stage of mutual selection, stories of chasing back and being chased abound, but there is never the "most correct" choice, only the "most suitable" choice at the moment. In this market with asymmetric and insufficient information, both investors and project parties need to weigh their own values and needs. For investors, to determine their own investment track and direction, and at the same time improve the added value they can create for the project and industry, can more accurately match the target project; for entrepreneurial teams, the leverage brought by every cent of financing The effect is also different. Choosing like-minded investors can also avoid many unnecessary disputes on the long road to entrepreneurship.

Reflecting on the tracking of post-investment projects, there are still things that can be done better. Practitioners in the cryptocurrency industry are generally young, and it is difficult for entrepreneurs and investors to say who has more experience and knowledge. But no matter who you are, you need to have long-term belief and patience in the industry, calmly deal with market noise, have independent judgments, constantly polish your understanding of the track and the industry, and bring value creation to users and the industry within your ability. I believe that this market will not disappoint everyone who is working hard in the right direction.

secondary title

1. Token investment

$BLUR tokens currently in circulationmarket valuesecondary title

2. NFT investment

Image Source:

Image Source:NFT Marketplaces Dune Analytics – SeaLaunch

More advanced NFT transactions can also be used with NFT-Fi tools for leverage and risk hedging. NFT futures products include NFTPerp, NFEX, Tribe 3, etc. In order to get more airdrops, some NFT traders will frequently place a large number of orders or collection bids near the floor price. The futures agreement can help hedge the risks brought about by the rise and fall of NFT prices after the transaction is concluded, and can also enable NFT speculators to When the NFT market is more liquid, add leverage to the trading strategy.

secondary title

3. Blur and Paradigm ecological cooperation

The strength of the Blur project itself will also have the potential to feed back partners and Paradigm to invest in other targets. A social experiment project between Paradigm and Justin Roiland when Blur first launched in late October 2022Art GobblersWhen the Free Mint event started, the floor price once soared to 14 ETH. Investors in Blur and KOLs who help promote Blur can directly participate in Free Mint and benefit from it. From this incident, it can be seen that Paradigm and Blur have a close relationship, and it is not ruled out that there will be an operation strategy of building momentum and contributing traffic to each other in the future. Paradigm has also invested in multiple DeFi, NFT, public chain, MEV projects,Its projects and productssummary

summary

Blur has a team that intends to truly solve the pain points of the industry and long-term construction. With the blessing of Paradigm's long-term vision and the professional knowledge of the token economics model, I see the future of Blur further changing the NFT transaction paradigm and subverting the NFT market structure .

Information Sources

thank you

This research report is inseparable from@xuxiaopengmint @fanyayunrecommendations and reviews. grateful@MasterXDaiDiscussion and guidance on product moats, NFT trading market tracks, token economics models, etc. In addition, thank you @BTCdayu for your timely correction of the report!