Forbes Dialogue Blur: In the face of tens of billions of giants, how did the 10-person squad successfully "slay the dragon"?

标题：《Forget Art, Let's Trade: How A 10-Person Startup Came To Dominate NFT Markets》by Maria Gracia Santillana Linares, Forbes

Compiled by Kxp, BlockBeats

As the NFT buying frenzy subsided over the past year, a new trader-centric NFT marketplace quietly replaced OpenSea as the market leader.

Tieshun Roquerre, a 24-year-old co-founder of NFT trading company Blur, recalls the Vestaboard hanging on the wall of his office, recalling that just a few months ago, the noise coming from this monitor was unbearable. This cloud-connected leaf display, designed to resemble a retro train station departure sign, Roquerre programmed himself to remind himself that every time an NFT is bought or sold on his emerging NFT marketplace, the display card flips, and every click means a new transaction has been made on Blur.

When Blur first launched in October 2022, the threshold for flipping a display board was 0.1 ETH, which equates to an NFT value of approximately $130. But with traders flocking in, even Roquerre raising the bar to 1, 5, or even 10 ETH hasn't dampened enthusiasm for trading.

Roquerre admits: "It was such a hustle and bustle that we had to turn it off." He laughed at himself, "I'm irritable, but I'm glad I'm irritable."

Over the past six months, Roquerre and co-founder Anthony Liu (known until recently by the screen name "Galaga") have built the largest NFT marketplace based on trading volume, replacing market leader OpenSea. The latter received a valuation of $13.3 billion in January 2022, making its co-founders Devin Finzer and Alex Atallah the first NFT billionaires. In March, Blur, a small company with just 10 employees, traded $1 billion, while OpenSea traded $260 million.

Like other digital assets, the NFT market has seen a decline since peaking in January 2022, with sales reaching $5 billion that month. But monthly trading volume reached $1.7 billion in March and has toy-date more than $4.7 billion. Some of the most popular NFTs, such as Bored Apes, often sell for more than $100,000.

San Francisco-based Blur's rapid rise has alarmed industry experts because it was able to surpass New York-based OpenSea, although other well-funded startups have failed to surpass OpenSea. OpenSea dominated the NFT market in the summer of 2021, capturing 75% of the market at the end of 2022 even as competitors sprang up. According to Dapp Radar, it generated $472 million in revenue from $18.8 billion in trading volume, with a transaction fee of 2.5%. A year ago, Coinbase launched its own marketplace to compete with OpenSea, but the results were so bad that it has only recorded $6 million in sales to date.

There are many reasons for Blur's meteoric rise. First, while OpenSea has been catering to retail NFT buyers and art lovers, Blur takes a very different approach. Drawing on Robinhood's growth strategy, Blur has targeted active NFT traders to support its business and growth by raising venture capital from crypto investors such as Paradigm and Cozomo de Medici, overtaking competitors on platform fees. Similar to Binance, Blur rewards customers with its own tokens, which OpenSea has yet to launch. Blur's timing was clever. For the user-friendly OpenSea, casual buying of NFTs by retail customers and collectors has largely disappeared. However, NFT traders for profit purposes are still trading digital assets in large quantities on a daily basis.

Blur's alternative model and sudden appearance have shaken up the entire NFT ecosystem, prompting many participants to revisit audience targeting, creator royalties, and NFT utility.

Roquerre, the son of a family hotelier in Cambridge, Massachusetts, began his love of tech startups in 2013 when he was 15 and landed a summer job as a software engineer at Teespring, a fast-growing T-shirt startup. The internship evolved into a full-time job when Roquerre dropped out of his Boston private high school and, with the help of his mother, moved to a San Francisco apartment he shared with a roommate he found on Craigslist.

After a year at Teespring, Roquerre founded his own recruitment startup, StrongIntro, in 2015. A year later, he left the company to become a freshman at MIT, while Anthony Liu was already a sophomore. As a San Francisco native, Liu always knew he wanted to get into the startup industry. "In large part, I chose to come to MIT because of its valuable network," he says.

Anthony Liu, who leads Blur's team of seven engineers, has not publicly used his real name until today.

In 2018, during his junior year, Liu met Roquerre at a mutual friend's tea party. The tea party was an opportunity for students on the MIT campus interested in startups to meet each other. "We both made very conscious choices in our search for partners," Liu said.

In May of that year, Liu earned a degree in computer science, and Roquerre decided to drop out of MIT to join him in co-founding a blockchain startup called Namebase. Namebase operates a blockchain-based domain name marketplace. After three years of development, they sold it to Namecheap, the world's second-largest domain registrar after GoDaddy.

During the 2021 NFT craze, Roquerre started collecting and trading digital art, but for traders, the services of the existing marketplace made him unsatisfied. He said the existing marketplace "sees NFTs as a retail shopping experience," which isn't ideal for seasoned collectors who want to do more and faster transactions. Meanwhile, Liu, who has been creating and selling digital collections online since middle school, is convinced of the idea. So, in January 2022, Liu and Roquerre wrote the first lines of code for their new NFT startup, focusing on traders.

Market platforms, where companies provide a place and infrastructure for buyers and sellers to communicate, are hard to disrupt. If a good trading venue has already emerged, it will be very difficult for the new venue to attract enough buyers and sellers, and the larger the existing market, the harder it will be to break it. For example, while Craigslist's website remains intact more than 20 years later, its 2021 revenue still reached $660 million; And the 11-year-old Coinbase is still the hottest place to buy crypto in the United States. When it comes to buying and selling NFTs, there are dozens of marketplaces worldwide.

Roquerre said it's nearly "impossible" to compete with OpenSea's dominance in the retail NFT buyer market, but he sees opportunities among OpenSea's less thoughtful customer base: active traders who sometimes trade hundreds of thousands of dollars worth of NFTs every day.

To meet the needs of traders, Blur designed its user interface to be very different from OpenSea's, which emphasizes NFT artwork and presents it in a gallery-style. Blur draws on the active stock trading interface to display important trading data such as minute-by-minute prices, trading volumes, and ownership information in a simple list of NFT collections and sortable columns. Users can also further view information such as "depth", which shows the volume of transactions at different price levels, and its "auction pool" allows traders to bid on multiple works at once and buy NFTs in bulk with a single click.

This is in stark contrast to the pre-Blur era, when traders had to list them one by one to sell a large number of NFTs on OpenSea. Ovie Faruq, co-founder and artist of NFT collectible Rektguyz, said, "It was so painful."

To reduce costs for these traders, Blur has adopted a controversial strategy: paying royalties to artists becomes optional. On OpenSea and other marketplaces, NFT creators are often entitled to royalties, often up to 2.5%, on the secondary sale of their work. However, royalties are never embedded in the NFTs' low-level, low-level code on the blockchain, so they can only be enforced by software built on top of the blockchain, such as OpenSea's marketplace. Blur's move angered artists, leading OpenSea to lower royalty fees, and as of February, both marketplaces agreed to abide by a minimum royalty fee of 0.5%.

"Blur has said they don't care about artistry, they just want to build an exchange where people can create a marketplace for these pieces, and they don't care what the NFTs look like," said Shane Cutra, a retired and enthusiastic NFT trader who is a former CBOE trader. Since trading began in December 2020, 53-year-old Cutra said he made about $400,000 by trading NFTs.

Blur also attracts customers by issuing its native Blur Token, which is deposited (or airdropped as it is called in the crypto space) into a trader's wallet depending on the trader's activity level. Creating this "loyalty" token (which can be used for discounts in Blur's example) and giving them away for free based on usage is a common marketing strategy for Crypto to attract and retain customers. Blur's token, like Binance Token, does not represent platform ownership, but does have voting rights, allowing token holders to have a say on platform software changes.

Blur's first round of token airdrops took place in February and was aimed at users who have been using the platform since its launch last October, offering additional tokens to traders who convert from competitors. It has also found an innovative way to offer token rewards for trading activity, minimizing "self-laundering trading," a common phenomenon in crypto trading where people trade with themselves for trading incentives or manipulate the market, essentially rewarding customers with only certain types of bids. NFT marketplaces Looksrare and X2Y2 both launched in early 2022 in an attempt to disrupt OpenSea, but both were plagued by a large number of self-washing transactions and never occupied more than 15% of the NFT trading market share.

Roquerre declined to say how many Blur tokens he owns (with a total circulation of 342 million), saying only that 29% of them belong to Blur founders and employees. Of the remaining loyalty tokens, 51% are for Blur traders and 20% for investors and advisors. According to CoinGecko, Blur's current market cap of tokens in circulation is around $250 million, or $0.58 per Blur Token.

Blur's strategy accumulation has had a huge impact on the NFT market. In February, OpenSea announced the temporary elimination of its 2.5% platform fees — a business model that earned almost $500 million last year. In April, OpenSea launched OpenSea Pro, an NFT trading platform with 0% fees and similar trading tools to Blur. When Forbes called OpenSea for comment, they declined to talk directly about Blur, changes to the fee structure, or whether they planned to launch their own loyalty token. "I've seen a lot of competition in my life that go unsuccessful," says Erick Calderon, artist and founder of renowned NFT studio ArtBlocks.

In the crazy and sometimes confusing world of crypto and NFT trading, it's nearly impossible to build sustainable barriers around business models. Since its launch last year, Blur has replaced OpenSea as the market leader in less than six months, but it still faces many challenges if it wants to stay ahead of the curve. First, it doesn't charge anything, so it relies mostly on its $11 million in venture capital funding. It needs to use fees or find other sources of income to sustain its expenses, and currently has only 10 employees, most of whom are software engineers. In August, Blur's token holders will vote on a proposal to turn on a 2.5% platform fee, but if these fees are enabled, it could quickly lose a large number of users. Although Blur has been unattainably ahead of OpenSea in terms of trading volume for the past seven weeks, OpenSea still has more monthly users than Blur, which has 90,000 traders per week compared to Blur's about 40,000, according to data on Dune.

There is also a feud between Blur and NFT artists, as it boldly cuts all royalties given to creators. Betty, founder and CEO of the Deadfellaz pop series

In a recent tweet, he said: "How can you expect economic prosperity when you don't recognize or support the people who created your deals?"

Then there's the regulatory issue: The U.S. Securities and Exchange Commission (SEC) has been ramping up enforcement against crypto companies and increasingly viewing NFTs as potential securities. A lawsuit against popular NBA Top Shot creator Dapper Labs alleges that the company's NFTs are securities, and the SEC is reportedly investigating leading NFT studio Yuga Labs for its alleged sale of NFTs in the form of unregistered securities, such as Bored Apes.

Reward tokens such as Blur may also come under scrutiny, and Adam Pollet, a partner in securities enforcement and litigation practice at Eversheds Sutherland, said Blur could still face regulatory action even if the token is only used to govern the token to improve and fund the development of the platform.

"This reduces the risk of non-compliance, but it definitely does not eliminate it," he added. Roquerre said Blur is working closely with its team of lawyers and Paradigm's partners to make sure they're on the right side of the law. "From day one, we've been focused on making sure everything we do is regulatory," he said.