OpenSea loses NFT market dominance in Q1 2023

Key Highlights

• Blur has overtaken OpenSea as the dominant platform in the NFT market, with a trading volume of $2.7 billion in Q1 2023 and a market dominance of 57.44%.
• Ethereum remains the dominant blockchain for NFT trading, with a 89.50% market share in March 2023. Yuga Labs and CryptoPunks were the most traded NFT collections on Ethereum.
• Solana and Polygon are emerging as significant players in the NFT market, with Solana’s Monkey Kingdom collection and Polygon’s inclusion in Binance NFT marketplace.

The NFT market has had an impressive start of the year with Q1 2023 being the best quarter since the second quarter of 2022. Despite a slight decrease in trading volume in March, the overall performance has been bullish.

One of the major takeaways in the first quarter of 2023 is the fact that the OpenSea NFT marketplace lost its dominance to a new platform, Blur, after being the undisputed platform so far. 

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The NFT Market saw a 137% increase in trading volume in Q1, reaching a total value of $4.7 billion. March saw a 15.65% decrease in trading volume after a February inflated by the Blur token farming period. NFT sales count only decreased by 4.63% in March, with 2.7 million NFTs sold.

However, Q1 2023 had a total of 19.4 million NFT sales, which is an increase of 8.56% from the last quarter of 2022. 

The NFT market is rapidly evolving, with the emergence of new players and changing dynamics. In Q1 2023, Blur dominated the NFT market, experiencing a significant increase in trading volume and market dominance.

The marketplace recorded a trading volume of $2.7 billion, which is a 783.89% increase from Q4 2022, and a market dominance of 57.44%. In March, despite a decrease in trading volume by 6.56% to $1.2 billion, Blur still had a dominance of 70.5% over the market. 

What You Should Know 

Ethereum remains the dominant blockchain in the NFT market by volume, accounting for 89.50% of the market share in March. Furthermore, Ethereum’s quarterly trading volume increased by 245.43% to $4.1 billion in Q1 2023, compared to Q4 2022. CryptoPunks was the most traded NFT collection on Ethereum with a trading volume of $241 million, an increase of 1,214% from the previous month.

In March 2023, Yuga Labs NFT collections dominated Ethereum volume, accounting for 38.61% of the NFT volume on Ethereum and 34.55% of the entire NFT industry. 

Surprisingly, Solana is in second place with a trading volume of $242 million, which is an increase of 4.55% from the previous quarter. The NFT collection Monkey Kingdom drove the Solana NFT protocol in March, with a trading volume of $7.9 million, doubling its number from February.

Back in December, two of the most popular NFT collections on Solana announced they will be a bridge to Ethereum and Polygon, which was a big hit for the blockchain. On 27 March, one of the co-founders of ‘DeGods’ and ‘y00ts’ announced the first sale of y00ts on Polygon, which marked the success of the bridge for one of the collections.  

Furthermore, Polygon had a bullish start to the year, with a trading volume of $29.8 million in March, despite a 24.20% decrease from the previous month. However, looking at the quarterly data, it had a trading volume of $85 million in Q1 2023, which is a remarkable 125.04% increase from the previous quarter and one of the best quarters recorded since Q4 2021.

On 8 March, Binance NFT, the non-fungible token (NFT) arm of crypto exchange Binance, announced that the Polygon network had been included in its supported blockchains within the marketplace. 

Blur’s rise to dominance can be attributed to its unique features and offerings. One of the significant reasons pro traders are flocking to Blur is its promise to users that it will reward them with future airdrops of the BLUR token, totalling some 300 million BLUR during its next “season” of give-outs.

The token has a fully diluted market cap of $2.5 billion, and the Blur team is more than willing to throw its financial weight around to entice NFT traders to stick with them. 

On the other hand, OpenSea, which was once the undisputed leader of the NFT market, is now facing stiff competition from Blur. In Q1 2023, OpenSea recorded a quarterly increase of 68.41% with a trading volume of $1.4 billion and a market dominance of 31.10%.

However, in March, OpenSea’s trading volume decreased by 35% to $381 million, and it had a market dominance of 22%. That is the platform’s smallest market share since February 2021.  

It is noteworthy to mention that CryptoPunks are currently experiencing massive trading activity on Blur Marketplace. According to recent data, a staggering 87% of the total trading volume for CryptoPunks is taking place on Blur, amounting to an impressive $216 million.

What’s even more interesting is that the average size of trades on Blur is 7.34% lower than on the CryptoPunk native NFT marketplace, with an average trade size of $114,453.69. 

Opinion on Blur’s Recent Raise 

While Blur’s rise to dominance is impressive, the marketplace needs to be careful in how it manages its user base and perceives its loyalty. Token farming is not a new concept, and it would be a mistake for Blur to presume that the wallets driving its phenomenal rise right now will do anything but jump ship if another platform offers them a better financial incentive to do so. 

More importantly, the ripple effects of Blur’s rise to dominance on the rest of the space need to be considered. The NFT world should celebrate the fact that there is such an attentive and inventive platform out there dedicated to serving the needs of traders.

Still, big problems could start to rear their heads when one marketplace or demographic’s prosperity comes at the direct or second-hand expense of another’s, whether that’s in a zero-sum marketplace face-off or eroding royalties rights for the artists who built the space from the ground up. 

Blur claims OpenSea is a centralized antagonist in the NFT ecosystem but making royalties payouts and marketplace dominance beholden to a group of just a few hundred NFT whales isn’t exactly the most decentralized system, either.

The Web3 ecosystem needs to ensure it’s innovating and catering to the needs of every demographic in the space, not just pro traders. One group that would be great to start with is the creators who helped make the NFT ecosystem what it is today.

Instead of leaving them to wonder which platform will honour royalties on their work and in what manner, there needs to be a decentralized way for artists and project heads themselves to control them. 

Conclusion 

In conclusion, Blur’s rise to dominance in the NFT market in Q1 2023 is impressive. However, the NFT ecosystem needs to ensure that it’s catering to the needs of every demographic in the space, not just pro traders. The focus needs to be on the long-term growth and sustainability of the ecosystem, not just short-term gains. 

2023 has started on a very bullish note for the NFT market. Despite a slight decrease in trading volume in March, the overall performance in Q1 has been remarkable, with an increase of 137.04% compared to the previous quarter. The dominance of Ethereum and the growing popularity of Polygon have been the key highlights of the NFT market performance in Q1.