《Forbes》 Interview with Blur: How a 10-Person Team is Changing the NFT Market Landscape

Original title: Forget Art, Let's Trade: How A 10-Person Startup Came To Dominate NFT Markets

Original article by Maria Gracia Santillana Linares, Forbes

Kxp, BlockBeats

As the NFT buying frenzy of the past year has subsided, a new trader-focused NFT market has quietly replaced OpenSea as the market leader.

As Tieshun Roquerre, 24, co-founder of NFT trading firm Blur, recalls the Vestaboard hanging on the wall of his home office, he remembers how just a few months ago the noise coming from this display was unbearable. The cloud-connected split-leaf display, designed to look like a vintage train station departure sign, was programmed by Roquerre to remind him that every time an NFT was bought or sold in his nascent NFT market, the display would flip, and each click meant a new transaction had been made on Blur.

When Blur first launched in October 2022, the threshold for flipping a display board was 0.1 ETH, equivalent to about $130 in NFT value. But with traders pouring in, even Roquerre raising the threshold to one, five, or even 10 ETH didn't dampen the enthusiasm.

"It was so loud we had to turn it off," admits Roquerre. "I'm irritable, but I'm glad I'm irritable," he jokes.

Over the past six months, Roquerre and co-founder Anthony Liu (until recently known by the screen name "Galaga") have built the largest NFT market based on volume, displacing market leader OpenSea. The latter was valued at $13.3 billion in January 2022, making co-founders Devin Finzer and Alex Atallah the first NFT billionaires. Blur, a small company with just 10 employees, did $1 billion in transactions in March, while OpenSea did $260 million.

Like other digital assets, the NFT market has declined since its peak in January 2022, when sales hit $5 billion that month. But trading volume reached $1.7 billion a month in March and has surpassed $4.7 billion year-to-date. Some of the most popular NFTS, such as Bored Apes, often sell for more than $100,000.

SAN Francisco-based Blur's meteoric rise has surprised industry experts because it was able to overtake New York-based OpenSea, despite the failure of other well-funded startups that tried to do so. OpenSea dominated the NFT market in the summer of 2021, and even as competitors mushroomed, it still had 75% of the market at the end of 2022. It generated $472 million in revenue from $18.8 billion in trading, according to Dapp Radar, with a transaction fee of 2.5 percent. Coinbase launched its own marketplace to compete with OpenSea a year ago, but the results have been disastrous, with only $6 million in sales recorded so far.

There are many reasons for Blur's meteoric rise. First, while OpenSea has been catering to retail NFT buyers and art lovers, Blur has taken a very different approach. Blur took a page from Robinhood's growth strategy and targeted active NFT traders, outpacing rivals in platform fees by funding its business and growth with venture capital raised from Crypto investors such as Paradigm and Cozomo de Medici. Like Binance, Blur is also rewarding customers with tokens it mints itself, while OpenSea has yet to launch a similar initiative. Blur's timing was ingenious. For the user-friendly OpenSea, casual buying of NFT by retail customers and collectors has largely disappeared. But for-profit NFT traders still trade large amounts of digital assets every day.

Blur's alternative model and sudden emergence has shaken up the entire NFT ecosystem, prompting many participants to re-examine audience targeting, creator royalties and NFT utility.

The son of a B&B operator in Cambridge, Mass., Roquerre's love of tech startups began in 2013, when, at age 15, he landed a summer job as a software engineer at Teespring, a fast-growing T-shirt startup. The internship morphed into a full-time job, when Roquerre dropped out of his private Boston high school and, with his mother's help, moved to a San Francisco apartment he shared with a roommate he found on Craigslist.

After a year at Teespring, Roquerre founded her own recruitment startup, StrongIntro, in 2015. He left the company a year later to become a freshman at MIT, where Anthony Liu was already a sophomore. A San Francisco native, Liu always knew he wanted to get into the startup business. "In large part, I chose to come to MIT because of the valuable network," he says.

Anthony Liu, who leads Blur's team of seven engineers, did not publicly use his real name until today.

In 2018, during his junior year, Liu met Roquerre at a mutual friend's tea party. The tea party is an opportunity for students on MIT's campus who are interested in startups to get to know each other. "We both made very conscious choices when we were looking for partners," Liu said.

In May of that year, Liu graduated with a degree in computer science, and Roquerre decided to drop out of MIT to join him in co-founding a blockchain startup called Namebase. Namebase operates a blockchain-based domain name marketplace. After three years of development, they sold it to Namecheap, the world's second-largest domain registrar after GoDaddy.

Roquerre started collecting and trading digital art during the NFT boom in 2021, but he was not satisfied with the services of existing markets for traders. The existing market "looks at NFT as a retail shopping experience," he said, which is not ideal for sophisticated collectors who want to trade more and faster. Meanwhile, Liu, who has created and sold digital collections online since middle school, was convinced by the idea. So, in January 2022, Liu and Roquerre wrote the first line of code for their new NFT startup, focusing on traders.

A marketplace, a place where a company provides a venue and infrastructure for buyers and sellers to communicate, is hard to disrupt. If a good place already exists, it will be hard for the new place to attract enough buyers and sellers, and the bigger the existing market, the harder it will be to break it. Craigslist, for example, generated $660 million in revenue in 2021, even though its site remains intact after more than 20 years. The 11-year-old Coinbase is still the most popular place to buy Crypto in the United States. There are dozens of markets around the world for buying and selling NFTS.

Roquerre said it would be "almost impossible" to compete with OpenSea's dominance of the market for retail NFT buyers, but he sees an opportunity among OpenSea's less-well-served customer base: active traders who sometimes trade hundreds of thousands of dollars' worth of NFT per day.

To meet the needs of traders, Blur designed its user interface to be radically different from OpenSea's, which emphasises NFT art in a gallery-like display. Blur borrows from the active stock trading interface, displaying important trade data such as price per minute, volume and ownership information in a simple list of NFT favorites and a sortable column. Users can further view information such as "Depth," which shows volumes at different price levels, and "bid pools," which allow traders to bid on multiple pieces at once and buy NFT in bulk with one click.

This is in stark contrast to the pre-Blur era, when traders had to list one by one to sell large numbers of NFT on OpenSea. "It was excruciating," says Ovie Faruq, co-founder and artist of NFT collectible Rektguyz.

To reduce costs for these traders, Blur adopted a controversial tactic: paying royalties to artists became optional. On OpenSea and other markets, NFT creators are usually entitled to royalties on secondary sales of their work, usually up to 2.5%. However, royalties are never embedded in the underlying, low-level code of the NFT on the blockchain, and so can only be executed by software built on top of the blockchain, such as OpenSea's marketplace. Blur's move angered artists, leading OpenSea to lower its royalty fees, and as of February, both markets had agreed to comply with a minimum royalty fee of 0.5%.

"Blur said they didn't care about art, they just wanted to build an exchange where people could create a market for their art, and they didn't care what the NFT looked like," says Shane Cutra, a former Chicago Board Options Exchange trader and now retired NFT trader. Since he began trading in December 2020, Cutra, 53, said he has made about $400,000 trading NFT.

Blur has also attracted customers by issuing its own local Blur tokens, which are deposited (or airdropped in the Crypto world) into a trader's wallet based on their level of activity. Creating such "loyalty" tokens, which in Blur's case can be used to enjoy discounts, and giving them away for free based on usage, is a common marketing strategy for Crypto to attract and retain customers. Blur's Token, like Binance's Token, does not represent platform ownership, but does have voting rights, giving Token holders a voice on changes to the platform's software.

Blur's first round of Token drops took place in February for users who had been using the platform since its launch in October, offering extra tokens to traders switching from competitors. It has also found an innovative way to offer Token rewards for trading activity that minimizes "" self-washing trading," "a common phenomenon in Crypto trading where people trade with themselves for trade incentives or manipulate the market, essentially rewarding customers only for certain types of bids. NFT markets Looksrare and X2Y2 both launched in early 2022 in an attempt to disrupt OpenSea, but both were plagued by a large number of self-washing deals and never accounted for more than 15% of the NFT deal market.

Roquerre declined to say how many Blur tokens he holds (there is a total circulation of 342m), saying only that 29 per cent of them belong to Blur founders and employees. Of the remaining loyalty tokens, 51% go to Blur traders and 20% to investors and advisers. According to  CoinGecko  Blur currently has a market cap of about $250 million, with each Blur Token costing about $0.58.

Blur 的策略累积效应对 NFT 市场产生了巨大影响。2 月份，OpenSea 宣布暂时取消其 2.5% 的平台费用——这是去年其几乎赚取 5 亿美元营收的商业模式。4 月份，OpenSea 推出了 OpenSea Pro，这是一款 0% 手续费且与 Blur 具有类似交易工具的 NFT 交易平台。当《福布斯》致电 OpenSea 征求评论时，他们拒绝直接谈论 Blur、费用结构的变化或是否计划推出自己的忠诚度 Token。 「我这辈子见过很多走向失败的竞争，」知名 NFT 工作室 ArtBlocks 的艺术家兼创始人 Erick Calderon 说，「在我看来，这次最为惊人。」

In the frenzied and sometimes confusing world of Crypto and NFT trading, it is almost impossible to build sustainable barriers around business models. Blur has replaced OpenSea as the market leader in less than six months since its launch last year, but it faces a number of challenges if it hopes to stay ahead. For one thing, it doesn't charge any fees, so it relies largely on its $11 million in venture capital funding. It needs to adopt fees or find other sources of revenue to cover its expenses, and currently has just 10 employees, most of them software engineers. In August, Blur's Token holders will vote on a proposal to unlock 2.5 per cent platform fees, but it could quickly lose a significant number of users if these fees are implemented. Although Blur has held a distant lead over OpenSea in transaction volume for the past seven weeks, OpenSea still has more monthly users than Blur, with OpenSea having 90,000 traders a week compared to Blur's roughly 40,000, according to  The data on Dune.

Blur was also at loggerheads with NFT artists, as it boldly cut all royalties given to creators. Betty, founder and CEO of the popular Deadfellaz line

(not his real name) said in a recent tweet: "How do you expect the economy to prosper when you don't recognize or support the people who created your trade?"

Then there's the regulatory issue: The Securities and Exchange Commission has been stepping up enforcement against Crypto companies and is increasingly treating NFTS as potential securities. A lawsuit against popular NBA Top Shot creator Dapper Labs alleges that the company's NFT is a security, and the SEC is reportedly investigating leading NFT studio Yuga Labs, For allegedly selling NFTS in the form of unregistered securities, such as Bored Apes.

Rewards tokens such as Blur's could also come under scrutiny. Adam Pollet, partner at Eversheds Sutherland's securities enforcement and litigation practice, said that even if the Token is only used as a governance Token to improve and fund the development of the platform, Blur could still face regulatory action.

他补充说：「这降低了违规行为的风险，但绝对没有消除它。」 Roquerre 则表示，Blur 正与其律师团队和 Paradigm 的合作伙伴紧密合作，以确保他们处于法律的正确一方。他说：「从第一天开始，我们就一直关注确保我们所做的一切都符合监管规定。」

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