NFT Trading Volumes Hit $2B in February, Highest Since LUNA Crash, Thanks to Blur

The war for market share in the non-fungible token (NFT) space may be having positive impacts after all.

According to Web3 data platform DappRadar’s latest industry report, NFT trading volumes reached $2 billion in February – the highest number since before the meteoric crash of Terra and its UST and LUNA tokens in May 2022.

Much of the surge is attributable to the rising popularity of zero-fee marketplace Blur. While NFT sales, the number of tokens traded, decreased about 32% from January, trading volume, the amount of cryptocurrency transacted across those trades, increased about 120%. Much of this has to do with incentivized trades ahead of Blur’s native token airdrop in mid-February.

Sara Gherghelas, blockchain research analyst at DappRadar, told CoinDesk that while Blur is overtaking market share and challenging the historically leading NFT marketplace OpenSea, the marketplace isn’t bringing new traders into NFTs. While OpenSea is targeted towards retail traders, Blur’s focus on professional traders may be raising trading volumes, not new buyers.

“Blur doesn't bring adoption,” said Gherghelas. “As of right now, they are just bringing hype with the token launch, but it's impressive what they're doing.”

Since Blur launched in October, it's been focusing on targeting floor-sweeping NFT traders looking to make large-scale purchases with zero fees. It quickly rose to popularity by incentivizing traders to transact on the platform to be eligible to receive its native token BLUR ahead of the token's release in February. Two days after the token went live, Blur surpassed OpenSea in trading volume, and since has been challenging the leading marketplace’s status.

The Yuga empire keeps NFTs hot

While Blur has played a large role in February’s NFT trading volumes, DappRadar has also reported that Yuga Labs’ NFT collections contributed 30% of Ethereum-based NFT trading volume last month. Its Dookey Dash skill-based mint played a large role in this figure – earlier this week, the winning key, an NFT earned by receiving the highest score on the game, sold for $1.6 million.

Gherghelas told CoinDesk that Yuga Labs customers don’t care about sought-after rarity traits in its NFTs, and that its dedicated customers will purchase whatever they release to become a part of the greater community the company is building.

She noted that Yuga buyers will be ready to embrace TwelveFold – its upcoming generative art Bitcoin NFT collection.

“It’s another way that they are trying to dominate the market,” said Gherghelas. “It’s surprising why Yuga Labs wanted to launch this … this might be something interesting that the market will evolve [towards].”

Leveling up Web3 gaming

The rush by Yuga Labs fans to jump into the sewer and play Dookey Dash wasn’t the only bullish sign for blockchain gaming, according to the report. While 2022 saw the decline of the play-to-earn model popularized by projects like Axie Infinity, in 2023 the Web3 gaming projects are focusing on the metaverse and being able to develop better projects, supported by gaming engines like Unity which released support for SDKs for MetaMask and other decentralized projects.