Blur vs Looks: This Time is Different?
LooksRare and Blur are both NFT marketplaces that facilitate NFT trading between users, but were their launch goals the same? We evaluated LooksRare and Blur’s launch strategies.
Blur’s strategy
Blur launched a retroactive airdrop in the form of Care Packages, designed to incentivize liquidity on the protocol. Riskier positions earn more points and subsequently have a higher chance of being airdropped more $BLUR tokens.
The subtle design was the loyalty factor, which awarded those who list only on Blur the highest chance of obtaining a larger amount of $BLUR. The loyalty factor incentivized liquidity on the platform, both through bids and the listing of assets.
Blur’s marketing strategy successfully achieved specific objectives, which were:
a) Retro airdrop (delayed rewards, wash traders are disincentivized and discounted)
b) Non-disclosure of token amounts in Care Packages (mystery factor)
c) Addictive farming method (similar to how gamers farm for rewards)
d) Loyalty criteria for increased ‘luck’ when unwrapping Care Packages (must be maintained, which encouraged prioritized use of their platform)
LooksRare’s strategy
LooksRare launched their token and platform at the same time, airdropping 12% of their total supply, 120M $LOOKS, to eligible OpenSea traders. The platform also announced LP, staking, trading, and later listing rewards in the form of $LOOKS emissions.
LooksRare's strategy involved creating high emissions to ensure continued demand for their token and incentivize usage of the platform for trading. Traders rushed to farm staking rewards and trade on the platform to earn the token, leading to a huge volume of wash trading.
Outcome
The outcome for both airdrop strategies was the same, with the token slumping 80-90%. Since both the $BLUR and $LOOKS tokens had no utility beyond being governance tokens, they were sold as soon as they were earned.
Season 2
Farming for Season 2 of Blur’s airdrop has similar mechanics to Season 1; the only difference is the inclusion of Lending Points, which replaces the Listing Points of NFTs that are available to lend on Blend.
Season 2 may potentially run until October 2023. As the 300M $BLUR is from the community treasury, and 468M is vested over the first year, calculations indicate that it will take ~8 months to obtain the 300M for the second airdrop.
Upcoming event
On June 15th, there will be a $BLUR unlock of 6.5% of the total supply (~196M) for investors, advisors, and contributors. Due to the sheer size of the potential sell pressure from the unlock, $BLUR holders may feel inclined to sell their holdings in advance.
Conclusion
Blur and LooksRare utilized different methods to achieve their objectives. LooksRare accomplished theirs through emissions, while Blur opted for a retroactive airdrop. In a sense, both entities made payments towards their goals.
Assuming Blur's Season 2 lasts for 8 months, the platform would have paid roughly $1.01 million per day, while LooksRare would have paid $2.46 million per day as incentives for increased usage of their respective platforms.
LooksRare attempted to retain users through high emissions, but the strategy was not sustainable or successful, as platform activity has dropped significantly since launching in January 2022.
Blur revamped LooksRare’s strategy and effectively incentivized liquidity on their platform, but the lack of token utility resulted in many airdropped users selling their allocations.
The Blur team continues to deliver, and with Blend, they have essentially revamped the NFT lending landscape by introducing leverage. If Blur continues to innovate and create products that can cater to retail users, it will be able to become the number-one NFT marketplace.