Ethereum NFTs Crater as Blur Incentives Wind Down

Floor prices of top Ethereum-based NFT collections, Pudgy Penguins and Bored Ape Yacht Club (BAYC), have been slashed by a quarter in the past week after major Blur farmers unwound their positions.

Other popular collections aren’t faring much better, with DeGods plummeting 32% and Azuki dropping 15%. Meanwhile, CryptoPunks are down 13% and trading at their lowest level since November 2023.

NFT marketplace Blur has been running an airdrop farming campaign where users are rewarded with [REDACTED], powered by Blast. Traders assume that this will be in the form of the Blast Layer 2 network’s upcoming token, set to launch on June 26.

Blur users earn points by bidding on NFTs and providing loan liquidity through the Blend protocol. Blur’s incentive structure has been controversial as the liquidity often isn’t indicative of true demand, leaving collectors reluctant to enter the market.

On June 17, more than $16 million was withdrawn from the Blur bid pool, representing a fifth of available buy-side liquidity, according to a Dune dashboard.

The majority of withdrawals can be attributed to CBB0FE, the top Blur farmer who has accrued more than three million points.

“Been a wild ride and probably our most challenging times in crypto so far. It's time for us to close this chapter,” they tweeted yesterday.

“CBB has been around 40% of the entire Blur market over the past few weeks. NFT markets seeing a new round of red as farmers pull bids and loans,” noted Stats, a well-followed NFT analyst.

It’s been a painful bear market for NFT collectors. With rare exceptions, most have seen their holdings crater by 90% or more from their 2021-22 highs.