The token's price had already increased to $0.27 from $0.15 over a period of about three weeks, a gain of 80%, but after OpenSea announced on Friday it had let go of half of its staff, it shot up another 33%, according to The Block data.
The fact that Blur's token is rising in value amid its rival's struggles is indicative of how thoroughly the marketplace has decimated OpenSea after usurping it as the number one NFT trading portal by volume. And Blur achieved that by implementing a much different business model than OpenSea, according to The Block Research analyst Brad Kay.
"It's very difficult for OpenSea to compete," said Kay, citing how dramatically Blur's business model undercut OpenSea when it introduced a "minimum 0.5% royalty fee, coupled with attractive airdrops and bidding incentives."
OpenSea's business model
In contrast, OpenSea's business model was predicated on charging both higher royalty and platform service fees. OpenSea has tried to lower fees in order to compete, and continues to attract more unique traders on a monthly basis, but has failed to stymy Blur's momentum.
"Blur is not a profitable business by fees," added Kay. "But they made up for it by releasing a token, since they have equity in the company through its initial allocation ... usually a certain percentage is kept for founders." While Blur has not stated what percentage of tokens its founders may have held onto, the company's token distribution specified 51% earmarked for community, 29% to past and future core contributors, 19% to investors and 1% to advisors.
On Friday, OpenSea said its move to drastically reduce headcount is part of a new strategy focused on "product upgrades to technology, reliability, speed, quality and experience."
Disclaimer: Larry Cermak, CEO of The Block, is an angel investor in Blur.
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