Blur founder Pacman has defended his platform against allegations that it crashed the rock bottom price of the non-fungible token (NFT).
While certain blue chip NFTs are nearing annual lows, the community has blamed the NFT marketplace Blur’s incentive model for the market’s decline. Blur founder Pacman took to Twitter to defend his platform.
Blur founder Pacman defends the platform
Pacman’s quote retweeted a community member’s tweet speaking out against the “Blur killing NFTs story.” Blur’s founder explained that some rock bottom prices have risen while others have fallen.
He complained that the community would not give credit if the floor price rose with the Blur airdrop, which injected liquidity into the market.
What are the best upcoming airdrops of 2023? Read more by clicking here.
Finally, Pacman lashed out:
“When asset prices are up, people don’t really talk about the cause (i.e. blurring injecting liquidity), but when they’re low, the pitchforks come out.”
Blur’s bidding incentive mechanism
Community members have blamed Blur’s incentive mechanism. A Twitter user Trevor.btc argued:
“In today’s bear environment, the flywheel of Blur’s bidding incentive allows mercenary capital to destroy the floor of a project without real holders selling, even as the number of holders increases
Since farmers ONLY earn points by having active bids, they are not incentivized to actually *buy* the NFTs they bid on
They MUST dump as soon as bids are accepted so they can get ETH and replace the bids to earn maximum points.
Indeed, due to large trading activity, the Blur marketplace dominates NFT trading volume. According to the latest data from a Dune dashboard, Blur contributes 69.1% to NFT trading volume.
Dune dashboard with volume dominance of NFT marketplaces
NFT market crash
Especially after the controversial launch of the Azuki Elementals, the bottom price of blue chip NFT collections started to drop. On Sunday, BeInCrypto reported that the floor price of Yuga Lab’s Bored Ape Yacht Club (BAYC) is down more than 7% in 24 hours.
At the time of writing, BAYC’s bottom price is around 30.65 Ethereum (ETH), trading near its two-year low.
BAYC bottom price chart. Source: NFTPRICEFLOOR