Or Fireworks Coming?
Blur Founder Pacman has defended his platform against allegations of it crashing the non-fungible token (NFT) market floor price.
While certain blue chip NFTs are near their yearly lows, the community has blamed the NFT marketplace Blur’s incentivization model for the fall in the market. Blur founder Pacman took to Twitter to defend his platform.
Blur Founder Pacman Defends The Platform
Pacman quote retweeted a community member’s tweet who was speaking against the “Blur killing NFTs narrative.” The Blur founder explained that some floor prices have gone up, whereas others have gone down.
He complained that the community would not give credit when the floor price increased with the Blur airdrop, which injected liquidity into the market.
What are the best upcoming airdrops of 2023? Read more by clicking here.
Lastly, Pacman lashed out:
“When asset prices are up, ppl don’t really talk about the root cause (ie blur injecting liquidity), but when they are down, the pitchforks come out.”
Blur’s Bid Incentivization Mechanism
The community members have blamed Blur’s bid incentivization mechanism. A Twitter user Trevor.btc argued:
“In the current bear environment, the flywheel of Blur’s bid incentive allows mercenary capital to destroy a project’s floor without any real holders selling, even as holder counts increase
Because farmers ONLY earn points by having bids active, they’re not incentivized to actually *buy* the NFTs they bid on
They NEED to dump as soon as any bids get accepted, so they can get ETH and replace the bids to earn max points”
Indeed due to large trading activities, the Blur marketplace dominates the NFT trading volume. According to the latest data from a Dune dashboard, Blur contributes 69.1% to the NFT trading volume.
Dune dashboard showing volume dominance of NFT marketplaces
NFT Market Crash
Particularly after the controversial launch of the Azuki Elementals, the floor price of blue chip NFT collections started plummeting. On Sunday, BeInCrypto reported that the floor price of Yuga Lab’s Bored Ape Yacht Club (BAYC) fell by over 7% in 24 hours.
As of writing, the floor price of BAYC is around 30.65 Ethereum (ETH), almost trading at two-year lows.
BAYC floor price chart. Source: NFTPRICEFLOOR
