NFTs
Ethereum NFTs Crater as Blur Incentives Decline
Major liquidity providers have withdrawn their offers ahead of the Blast token launch next week.
The floor prices of major Ethereum-based NFT collections Pudgy Penguins and Bored Ape Yacht Club (BAYC) were lowered by a quarter last week after top farmers Blur unrolled their positions.
Other popular sets aren’t faring much better, with DeGods down 32% and Azuki down 15%. Meanwhile, CryptoPunks are down 13% and are trading at their lowest level since November 2023.
NFT marketplace Blur is running an airdrop farming campaign where users are rewarded with [REDACTED], powered by explosion. Traders assume this will come in the form of the network’s next Blast Layer 2 token, set to launch on June 26.
Blur users earn points by bidding on NFTs and providing liquidity for loans through the Blend protocol. Blur’s incentive structure has been controversial, as liquidity is often not indicative of true demand, leaving collectors reluctant to enter the market.
On June 17, more than $16 million was withdrawn from Blur’s bidding pool, representing a fifth of the available buy-side liquidity, according to a Dune panel.
The majority of withdrawals can be attributed to CBB0FE, Blur’s top farmer who has accumulated over three million points.
“It’s been a crazy journey and probably our most challenging moments in crypto yet. It’s time for us to close this chapter,” they tweeted yesterday.
“CBB represented around 40% of the entire Blur market in recent weeks. NFT markets see new round of red as farmers withdraw bids and loans,” observed Stats, a well-followed NFT analyst.
It’s been a painful bear market for NFT collectors. With rare exceptions, most have seen their holdings plummet by 90% or more from their 2021-22 highs.