Blur Game: Part Deux - MVHQ

Blur Game: Part Deux

Blur Airdrop Season 2 explained and how it is affecting the market

May 4, 2023
Blur Game: Part Deux

Article originally published in MVHQ Magazine's February Issue on March 3, 2023 by RelicCK. Some information may be outdated.

On February 14th, Blur airdropped some good lovin’ on the market in the form of 360 million $BLUR tokens, 12% of the total 3 billion supply, following months of tireless listing and bidding in hopes that all of the daily work would be worth it in the end. Valentine’s Day rolled around and the NFT space as a whole, all of whom had been completely enveloped in this revolutionary process to dole out governance tokens, were finally feeling at ease. Nearly 200 MVHQ community members were in the trenches (voice chat) awaiting the, hopefully, heavy bag that was about to be dropped into their wallets.


The airdrop claim began, and as per usual the price of $BLUR temporarily skyrocketed immediately following. With prices reaching nearly $6 on Kucoin within the first 30 minutes, some savvy MVHQ community members were able to offload their tokens for a severely engorged price point. Shortly after the initial post-airdrop pump, the price trickled down to around $1 where it has steadily traded sideways with some 30-40% deviations.


Being the first community onboarded onto Blur, MVHQ played a massive role in shaping the platform into what it is now. As early believers, we were inclined to dive head-first into this initial airdrop, which rewarded us well. Internally we ran some estimates and MVHQ wallets accrued upwards of 10 million $BLUR, which equates to nearly $8 million at current market price.


The Valentine’s Day honeymoon phase soon ended just as quickly as it began as Blur dropped another announcement that day: Season 2 starts now. When they threw in the name “Season”, it hit me that this is pretty much that stock market game you used to play in your economics class in high school, except on steroids and you are rewarded a yearly salary if you participate.


Additional information around Season 2 included an undefined timeframe, points gained for bidding and listing is double the rate of Season 1 until April 1st, and 300+ million more $BLUR will be released.


This first-of-its-kind guerilla marketing tactic (not including LooksRare’s invitation of wash trading to incite volume on their platform) to draw volume away from existing NFT marketplaces and towards Blur by rewarding users for supplying liquidity on the marketplace through a gamified system has evolved into a gigantic vampire attack. So much so that it has adversely affected other NFT marketplaces, namely OpenSea.


Below is a view of volume by marketplace over the past month. Visible is the fact that Blur trading volume has been equal to OpenSea trading volume up until this first airdrop on February 14th, with this trend starting all the way back in mid-December. Then on February 14th, when Season 2 was announced, volume on Blur rapidly outpaced OpenSea as people witnessed how lucrative the Season 1 airdrop was and kicked themselves into gear to capture that value on the Season 2 airdrop.




And below you can see the daily user count for each marketplace through the last 90 days. Throughout Season 1, Blur pulled in 20-25% of OpenSea’s daily users, but as Season 2 started on February 14th it is apparent that Blur’s daily users grew to about 50% of OpenSea’s.



And these numbers are not just due to the fact that volume on the marketplace is incentivized. Blur has continued to innovate on its marketplace by integrating trading tools usually found on services that are solely aggregators while OpenSea continues to stagnate with respect to new products and trading tools.


With Season 2 comes some unique twists and turns implemented by the Blur team. In the ever-present war between marketplaces for market share, Blur has announced that the only way to achieve 100% loyalty is to solely list NFTs on Blur, as they are able to detect if the NFT is listed elsewhere and will subsequently knock your loyalty score down. Loyalty is the ‘luck’ metric Blur has included in the calculation when revealing the Blur airdrop crates that later open to show $BLUR tokens inside. Higher loyalty means an increased chance at rarer crates which in turn leads to a higher $BLUR yield.


Points towards the Season 2 airdrop are accrued through the process of placing bids and listings near the floor price of projects on the Blur platform. The further away from floor, the fewer points the position will collect. There needs to be some level of risk involved in the bid or listing to be eligible for points; neither placing positions on dead projects nor placing positions far from floor will be eligible for points.


Traders placing these listings and bids often are not wanting these positions fulfilled, though, so the process is a balancing act. A percentage of the positions a trader placed will be accepted by an opposing party, so a contingency plan needs to be in place for dealing with either selling an asset that you did not intend to sell or purchasing an asset you did not intend to purchase. If the plan is to immediately reverse the trade, then there will likely be immediate losses due to marketplace fees, gas, and price divergence. The balancing act here is to ensure that the $BLUR yield from these positions offsets these immediate losses that traders are succumbed to while farming these positions.


Recently, Machibigbrother and Franklin stepped into the spotlight as they seemingly battled each other in a war that included dumping apes back and forth and liquidating BendDAO positions, all while accruing Season 2 points through bids, listings, and sales. In doing so, the Bored Ape Yacht Club floor briefly dropped into the 50s and both Machi and Franklin seemed to take large losses on some of their ape positions.


Alongside Machi and Franklin, we have seen other NFT/crypto whales artificially pump and dump project floors to farm $BLUR, dump assets into artificially inflated bids, and/or buy assets at artificially depressed floors. There is a lot of gamification happening, and one can ask themselves ‘is all of it ethical and good for the space?’.


These recent vampire attacks alongside Blur’s more trading-friendly marketplace fees have also spurred some erratic and hurried responses from OpenSea. In seemingly rash decisions, OpenSea announced temporarily reducing their marketplace cut from 2.5% to 0% while also taking away creator royalty protection which previously guaranteed creators a royalty fee usually between 5% and 10% on all secondary sales for their project.



The utility of the $BLUR token is not widely known quite yet outside of governance voting. There has been no word on any kind of yield or staking, but Blur’s co-founder Pacman has spoken highly of Curve which leads me to believe Blur may be implementing a voting escrow model. The mechanics of this model require a user to escrow, or stake, their tokens to gain voting rights in the DAO. The longer someone escrows their tokens, at Curve it is between 2 weeks and 4 years, the more voting power they have from that set of tokens. Also, users who reach a certain voting power can create new proposals that are voted upon within the DAO. This is just one theory on how Blur could move forward with giving the token value, but in any case, Pacman has stated that they have some unique ways they will utilize the token.


With about 78.2% of airdrop 1 recipients having already sold the token, sell pressure has reduced substantially. The unlocked supply of tokens will nearly double at the conclusion of Season 2 when airdrop 2 releases another 300 million $BLUR tokens (10% of the full supply), so we will have to monitor what that does to the price. However, this next airdrop could still potentially be months away with only 12% of the total supply in circulation in the meantime.  


All in all, the actions Blur is taking have no doubt shaken up the space. When this is all said and done, we will see if we come out of this for the better or worse, but one thing is clear: OpenSea having some hard competition is a good thing.


The future release of tokens can be viewed below.