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Blur Reportedly Finds Loophole in OpenSea's Blocklist as Marketplace War Escalates

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The battle for market share over non-fungible token (NFT) creators and collectors has escalated to new levels.

According to speculation on Twitter, zero-fee platform Blur has found a loophole to bypass collections blocklisted by leading platform OpenSea – intensifying the competition between the two marketplaces.

On Monday, Twitter user “Panda Jackson” posted a Twitter thread sharing details of the supposed loophole, explaining that Blur created a new marketplace on Seaport, a protocol that OpenSea released in May 2022. OpenSea and a handful of other marketplaces including fractional NFT platform Tessera and the ApeCoin marketplace are built on the Seaport protocol.

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Panda Jackson specified that because Blur’s new marketplace feature based on Seaport isn’t included in the original blocklist, it can list collections with enforced royalties on the marketplace.

In the wake of the royalty debate in November, OpenSea clarified its stance with creators and built a royalty enforcement tool to prevent creators from having their collections listed on marketplaces that don’t honor creator royalties – including Blur, whose trading volume has been nearing that of OpenSea.

With the current loophole, Blur would be able to bypass OpenSea’s blocklist rule. This means that collections that previously weren't allowed to be listed on Blur’s royalty-optional marketplaces can now list these NFTs, which could threaten OpenSea’s share of the overall trading volume.

Evidence of the loophole is visible on the Blur marketplace. For example, earlier in January, NFT goliath Yuga Labs opened the long-anticipated Sewer Pass mint and included the code in the collection’s smart contracts that prevent the tokens from being listed on marketplaces that do not honor creator royalties.

According to data from Blur, buyers can now purchase the Sewer Pass on the marketplace. It is important to note the Sewer Pass NFTs are marked by a “permissioned” tab, which means full royalties are being enforced by Blur on the collection.

Although Blur has always had a royalty-optional model, its new feature challenges the very structure that drew many users to the platform. Panda Jackson told CoinDesk he is hopeful the loophole will, in fact, be a win-win situation for creators and collectors alike.

“Since creators are able to have enforced royalties on the two largest marketplaces at the same time, creators' income may be increased and result in more creators joining the space,” said Panda Jackson. “All players will benefit from this.”

NFT royalty or revenue?

Blur, which debuted in October 2022, landed itself on the map for being a no-fee marketplace geared toward professional NFT traders. In one of its first days it raked in about 1,160 ETH in trading volume, or over $1.8 million. It soared past competitor marketplaces such as Sudoswap and LooksRare, challenging OpenSea’s top spot.

However, the timing of Blur’s launch raised questions among creators in the space as the royalty conversation was in full swing. In August, marketplace X2Y2 moved to a royalty-optional model, followed by leading Solana-based marketplace Magic Eden in October. This sparked an outcry from artists in the space, who claimed marketplaces were attempting to drain their profits and over-commodify creativity.

By the beginning of December, X2Y2 and Magic Eden reverted to their original model of enforced royalties. However, Blur kept pushing along and has held the second-largest trading volume below OpenSea for at least the past month, according to data platform Dune Analytics.

Crypto community bracing for BLUR token release

While the timing of Blur’s scheme might appear timely in the wake of the Sewer Pass hype, there’s also hype around the anticipated launch of its governance protocol and native token, BLUR. Blur has been airdropping the token over the past several months to traders who have purchased Ethereum-based NFTs on the marketplace, to help make the marketplace community-owned.

Blur was set to launch its token earlier this month. However, it recently set a new date of Feb. 14 to gear up for the launch.

“We’re trying new things and the extra two weeks will allow us to deliver a launch that hasn’t been done before,” said Blur in a tweet.