Blur Airdrop: NFTFi on CoinEx: The DeFi platform that’s taking NFTs to new heights
PRESS RELEASE. The highly anticipated Blur airdrop finally began on February 14. According to Dune Analytics 8.2% of those who claimed the Blur airdrop received over 10,000 tokens. Users received between 1,000 to 10,000 BLUR tokens. On average, 7,000 tokens were distributed to each user. The BLUR price was $0.8 on CoinEx at the time of distribution. This means that the Blur airdrop gave users $5,600 in tokens, which is another legend after the Aptos airdrop.
Blur’s boom: NFT blue ocean
Blur, a newcomer in the NFT market has been in the spotlight for the past year. The project gained a large following after its announcement of the airdrop in March 2022. The project’s aggregation system, which allows frequent trading, has gained a lot of attention from active NFT traders. Blur has outperformed OpenSea in terms of trading volume, demonstrating fierce competition in the NFT market.
Blur’s popularity shows that there is a large demand for NFTs. However, the market and its derivatives tools are still underdeveloped. NFTGO data shows that the market cap for three top projects, specifically BAYC and CryptoPunks has already reached 2,000,000 ETH. This is more than $3.1 billion, according to CoinEx’s real-time ETH price.
Despite this, it is difficult to accurately assess the value of each NFT due to the unique characteristics. Different NFTs are like traditional collectibles. Each NFT has a unique set of features. Collectors may give an NFT a different price tag depending on the value of that attribute. NFT trading is more difficult than FT trading because there are no clear valuation methods. This also results in poor liquidity and a blockage of the market for NFTs.
Blue-chip NFTs can be expensive and difficult to access for retail investors, which hinders the growth of the NFT market. Retail investors can purchase 0.01 ETH or a lesser amount on exchanges, even though the No.1 crypto Bitcoin price is $20,000 Bored Ape Yacht Club’s (BAYC), however, has a floor price of 67 Ethereum, which is more than $100,000 making it prohibitively expensive for ordinary investors.
The NFT market continues to look for new solutions to those problems. This led to the NFTFi category. It covers NFT marketplaces and intermediaries, lending, renting derivatives, fragmentation and oracles.
NFT marketplace and NFT aggregator
NFT marketplaces are the heart of the entire NFT ecosystem. An NFT marketplace allows users to list their NFTs and purchase NFTs from other users at any time. NFT trading platforms often offer multiple sales models. These include fixed-price sales and English auctions. OpenSea and Rarible are the most popular NFT marketplaces right now. LooksRare and X2Y2 are also in demand. OpenSea is the only project that has issued its own tokens. You can check them out on CoinEx if interested in trading these tokens.
Other than centralized marketplaces, decentralized projects are also working to improve NFT’s liquidity. Sudoswap, for example, introduced the AMM mechanism of DEXs to the NFT market. This allows users to provide liquidity while benefiting from instant pricing through trade matching via Sudoswap. This addresses the liquidity problem in decentralized NFT markets. This method is better suited for NFT projects that rank in the middle or bottom market, as the AMM mechanism eliminates rarity variations. AMM is not available for blue-chip NFT projects because they are subject to greater price variations.
If a seller lists an NFT on OpenSea users who only use LooksRare won’t be able to view that NFT. Buyers may need to switch between multiple NFT markets when searching for their favorite NFT. This significantly increases the time and cost.
This has resulted in the rise of aggregators which have become a major channel to buy NFTs. Blur, for example, not only has its own marketplace but also aggregates OpenSea and LooksRare. This allows traders to quickly access the most important statistics about the relevant NFTs from one platform. Blur aggregators are more efficient than regular marketplaces such as OpenSea for professional traders.
Many top projects are looking to create their own aggregators. Uniswap is a well-known DEX. It recently acquired Genie and launched its NFT aggregator. This supports popular NFT marketplaces like OpenSea and X2Y2, LooksRare and Sudoswap. Foundation, NFT20 and NFTX. OpenSea also acquired Gem, an NFT marketplace aggregator, which aggregates platforms such as OpenSea and Rarible, LooksRare. NFTXX and NFT20.
NFT lending has become an integral part of the NFTFi group. NFT holders are looking for temporary liquidity to avoid selling their assets. This has led to a rising demand for NFT loans. NFT lending currently consists of two types: Peer to-Peer or Peer-to–Pool.
NFTfi is a common provider of Peer to Peer lending services. This lending model allows lenders and borrowers to negotiate all terms and conditions of the loan, including the amount, term, interest rates, and liquidation method. Peer-to–Peer lending has lower interest rates and is not subject to external oracles. Peer-to–Peer lending has high time costs and borrowers may need time to find suitable lenders.
Many NFT lending platforms have benefited from AAVE’s lending model. It employs the Peer-to–Pool approach in which the protocol matches both sides and makes decisions for lenders. This method is faster and more efficient, but it is not capital efficient and can lead to wide interest rate spreads. If there are 1,000 ETH in the pool but the borrower wants to borrow 500 ETH only, the interest he/she pays will be equally distributed among all lenders. This means that the interest payment received by the lenders would be smaller. The pool funds are not used up completely. Peer-to–Pool allows users to run the platform. BendDAO, a well-known NFT lending platform, experienced liquidity shortages due to the liquidation NFTs in a market downturn.
Ethereum approved the ERC-497 smart contract standard last year. It introduced the concept “expires” which allows collateral-free NFT renting via contracts. Collateral-free renting allows NFTs not to be wrapped in any way that would compromise their original features. However, the NFTs will be destroyed after the rental period ends. ERC-4907 has made collateral-free renting the norm in the NFT rental marketplace. It has replaced conventional collateralized renting. Most platforms, including reNFT, have adopted collateral-free rentals. NFT renting is still a niche market. The demand for blue-chip NFTs to rent is low and most NFT rental applications are in fields like gaming and metaverse.
Derivatives are essential products in the financial sector. NFTFi’s experimentation with derivatives has also attracted market attention. NFT-based options and futures are being explored by many platforms, despite not being very popular. NFT-based options and futures are offered by nftperp, which allows investors to trade NFTs long or short, and NiftyOption, which offers NFT options. The NFT derivatives market is still very young. However, investors will be able, once the products are upgraded, to hedge against price swings within the NFT market using various strategies.
Blue-chip NFTs such as CryptoPunks and BAYC are inextricably linked, which makes it difficult for retail investors to get involved. Many projects are looking at NFT fragmentation to address this problem. This is where NFTs can be broken down into multiple pieces that investors can buy and share the returns. Fractional.art is a leader in NFT fragmentation and offers Uniswap-based trading options that allow users trade fragmented NFTs anywhere, anytime. NFT fragmentation has its benefits, but there are potential disputes about the distribution of airdrop rewards.
Capturing NFT prices accurately has been a major challenge in the NFT market. Prices have a wide range impact on operations such as borrowing and liquidation. NFT oracles were created to solve the problem. Abacus oracle, for example, uses a peer-incentive pricing mechanism and Abacus Spot liquidity pricing to provide NFT pricing services that accurately capture the NFT’s value. Other platforms, such as Banksea and Upshot, are also looking into their pricing mechanisms. Oracle projects are fiercely competing in this sector by focusing on accurate NFT pricing in real-time.
NFTFi is an integral part of the NFT market. All segments of NFT are working towards a common goal: large-scale NFT circulation and greater accessibility. Many NFTFi projects are still at the infancy stage. However, they may offer innovative solutions that will help to accelerate the growth of the NFT market. Blur’s third airdrop, for example, triggered an increase in transaction volume and the floor price of blue-chip NFTs like BAYC or Azuki. The market will also be more attractive if NFT infrastructure is improved.
BLUR and many innovative NFTFi tokens are now available on CoinEx (https://www.coinex.com/), you can go to the exchange to trade the latest NFTFi token at any moment. CoinEx also announced the “NFTFi special event: Join Trading Volume Ranking and 5,000 USDT for Grabs”, promotion that runs from February 16 to February 22, 2023 (UTC).