$BLUR AIRDROP with Blur's Founder, Pacman

Transcript

um I do just thankless Nation welcome to this very special edition of bankless we got to talk about the airdrop that just happened because it has burned an all-time high 24 hour of eth burn inside of 24 hours which always gets me excited but of course we're talking about the blur nft trading platform which just released this token into the wild and

has gained a ton of excitement just some quick stats to throw at you all one billion dollars in volumes traded through blur over 1 billion trades almost a hundred thousand active users so far and ever since uh the late stages of 2022 has been gaining in market share over openc uh and so we're bringing on the blur founder Pac-Man uh I don't know if he calls himself a Founder I'll ask him that when we get on to the show uh to talk about the ethosubler where how does blur position itself in the world of nfts who is blur optimizing for is it optimizing for Traders is it optimizing for collectors uh how is blur going to develop and how did this massive airdrop find that just came into the world today

how is it organized what does the token do and all of the other royalty Wars that are also part of the conversation going around in the nft world so all of these conversations and more but first a moment to talk about some of these fantastic sponsors that make the show possible Kraken has been a leader in the crypto industry for the last 12 years dedicated to accelerating the global adoption of crypto Kraken puts an emphasis on security transparency and client support which is why over 9 million clients have come to love kraken's products whether you're a beginner or a pro the Kraken ux is simple intuitive and frictionless making the kraken app a great place for all to get involved and learn about crypto for those with experience the redesigned Kraken Pro app and web experience is completely customized sizable to your

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earn if I will tell you if you have any unclaimed air drops that you can get and it also does poapps and mintable nfts any kind of money that your wallet can claim earnify will tell you about it and you should probably do it now because some airdrops expire and if you sign up for earnify they'll email you anytime one of your wallets has a new airdrop for it to make sure that you never lose an airdrop ever again you can also upgrade to earn five premium to unlock access to airdrops that are beyond the basics and are able to set reminders for more wallets and for just under 21 a month it probably pays for itself with just one airdrop so plug in your wallets at earnify and see what you get that's e-a-r-n-i dot f i and make sure you never lose another airdrop

bankless Nation I am here with Pac-Man and as you can see if you are watching the YouTube This Is A visual representation of what Pac-Man may or may not look like Pac-Man welcome to the show gmgm thanks so much for having me uh so Pac-Man we're going to talk all of course about blur the nft trading Marketplace the the airdrop and also the royalties Wars but uh as bankless listeners we'll probably know I don't pay attention to the nft world nearly as much as I do the D5 or the protocol or layer 2 spaces so I kind of want to start this conversation at the very Beginnings uh who are you and how did you come to work and found blur and where did that idea come come from in

the first place yeah totally uh would it be helpful to just get kind of some background on myself sure just to start off yeah yeah so for me I got my start in engineering uh around eight years ago in Silicon Valley uh so I started off as an engineer and then quickly moved on to starting my first business back in 2016. I went through Y combinator which um you know for those of you in the web too the world will know I mean maybe in what three or less familiar but you know I see they are a big accelerator they funded Dropbox stripe Airbnb Reddit I went through their program afterwards really wanted to go to school ended up going to MIT studied math with math there with computer science and I met

Galaga my co-founder and we basically just hit it off and started working together ever since um you know initially started working on side projects we eventually left MIT to start our first business together back in 2018. we ran that business for three years and we sold it at the end of 2021 and we started working on blur immediately afterwards and the reason why is because in 2021 I personally gotten really into nfts I'm into bloodmap as my first nft uh to his eighth sold it and then I just completely hooked and I really fell in love with the trading side of nfts but I was just very frustrated with the infrastructure all the existing marketplaces were very retail oriented and rather slow and clunky I wanted something that was more of a

professional trading platform for nfds so that's exactly what we set out to build that blur and so you identified as an nft Trader very early on it's like that's kind of the the thing that really gravitated you gravitated towards but then out of your frustration of the lack of infrastructure for nft Traders that was the main integration for creating blur yep exactly and what would you say what was uh deficient in the world of nft trading that frustrated you before blur was created yeah you know David I think as someone who's maybe more familiar with the token world I think the right analogy is if you look at the progression of the token trading market right we started with

infrastructure like Mount gox or coinbase these are very primitive you know retail friendly ways to you know at least coinbase retail friendly way to buy and sell crypto and then over time you saw as the needs of the space developed the infrastructure became increasingly Advanced and financialized we went from you know infrastructure like coinbase which is very optimized for retail to more crypto native exchanges you had you know binance okay X will be bitmax they're a bit more financialized exchanges you know FDX of course before they rugged everyone right so that development of infrastructure is the same progression that we're seeing in the nft space today when you look at the nft market it's

really only had its moment in the last two years so the infrastructure really has not had too much time to develop but the needs of the space have been growing and so that need for professionalization and the professionalized infrastructure is exactly the need that we're serving yeah so let's dive into that that Niche that blur has really optimized for so optimize for nft Traders as opposed to collectors can you just help help me understand the the area of the nft world that blur has really uh carved out totally so you know I think when you're like a newcomer to nfts the existing marketplaces that you know we're all here prior to blur they really served that use case well you know they treated

nfts as a more traditional shopping experience right like what you would see on Amazon or Ebay or Craigslist and it worked really well for the dabblers but if you're a very active collector or if you're a Trader you really want to buy in size you want to be able to monitor the market in real time a lot of these collections they can you know the floor can shift very quickly on you right you can go down or up and especially for the hot collections there can be oftentimes so many orders happening at once that you know prior to blur all these platforms would just crash when the market got really hot um and wouldn't even be able to support even basic levels of trading and that was because these marketplaces really

treated nfts as a shopping experience which again works for the you know retail user or the beginner before someone who's very active in the space and is trying to take a position and move quickly in the market they want something that's more akin to you know whenever you use an advanced token trading exchange you have a real-time order book you have a live order speed right as trays are happening you're seeing that all update live the depth charts updating live you're able to chart things you know very quickly uh see a lot of data all at once all updating in real time and really before blur that kind of experience in a Marketplace just didn't exists so that's really the key focus of blur from day one you'll notice even from you know our early tweet announcements or blog posts

we've always made it very clear that we're focused on building the best nft Marketplace for pro Traders right okay so you are optimizing for people who are really leaning into the financial net aspects of these nfts where these nfts are tokens hence they are yeah have some sort of financial aspect to them where other people might just be perusing through Open Seas like oh I guess I like that one I guess I'll add it to my cart this is not what blur is optimized for blur has optimized for the power user of the nft industry is that a fair description exactly yeah I would say you know in a similar way to when you look at why someone would buy Bitcoin or eth or any other token there might be some utility

to it there might be you know maybe it's ultrasound money maybe it's something else um but ultimately the exchanges that these tokens trade on they're really focused on serving the core Financial need of trading the token around you know the speculation and that's not in like a negative right right in any in any Market there's hedgers and speculators and the exchanges serve matching the needs of the hedgers and the speculators and ultimately when when we think about why do we bring to the table for blur as a protocol and Marketplace it's really about making that market more liquid more efficient enabling it to grow just like the advanced exchange infrastructure and tokens really allow the space to grow as well yeah so I was looking at some Dune analytics Sports before we hopped into

this live stream here and and I'll repeat the numbers that I said at the beginning a billion dollars in total volume over a billion trades and almost 100 000 active users what has blur built that attracted all of that volume attracted all of that trading activity uh so if we're talking talking about building an nft Marketplace that's really optimized for the power user let's talk about the details of so what that what that means what has blur built that has allowed for all of this these power users to really be power users yeah totally um and you know David I'm really glad that you did your research it was it was a billion it was actually over a billion 1.2 billion um there's a really great analytics chart from Hill Dobby who um I can share that afterwards he does some really

great analysis uh but I think the the right way thing about it is just to imagine the token trading Market if any of the more crypto native exchanges Beyond coinbase didn't exist right like if binance didn't exist that next there a bit you know any of these exchanges just imagine just buying on you know buying and selling Bitcoin on coinbase consumer that's basically what the state of the market was um about you know 394 days ago when we started working on blur and that infrastructure was what was serving the nft market as it was doing you know four

billion dollars worth of trading volume every month at its peak so there was just a massive massive need for even just you know basic more professionalized infrastructure one of the products that we released um this was a combination of of UI plus the protocol integration but one of the products that we released was blurbating which allowed traders to actually start bidding with eth and we actually visualized the order book of bids directly on the marketplace and this is you know fairly basic in the token trading world but this was massively you know meta changing in the nft world because now when Traders were going into a collection they could see oh this

collection has you know five thousand eight thousand each of bids on the order book supporting the floor price you know this is a collection that I can buy into and I have fairly good confidence that she's not going to shop on me whereas a collection without any sort of depth on the buy side you know is probably going to have um a much harder time maintaining its priceability so this is something that's you know fairly basic and from the token trading World you'd be like of course you need an order book like that's fundamental to how an exchange works but that's really just not something that existed in the nft world before blur released it okay and and so okay so this really just perhaps just um uh UI and UI upgrades which allows for just more visualization

of this state of the market perhaps some um on-chain optimizations of how uh trades get executed perhaps but it really kind of just sounds like enabling users to have more data and tools at their disposal to engage in the financial aspect of nfts yeah I would say I would say it's a combination of both when you look at what we did on the protocol level so prior to blurbids basically whenever you want to bid on an nft you had to convert your eth into wheat right and it's a very confusing experience you know even for myself as someone who's an advanced user it was just always so confusing and clunky and

of course especially for a newcomer it's just really really confusing and really easy to shoot yourself in the foot with it and what we did was we simplified that at the protocol level by enabling users to bid by depositing Ethan to their own pool and they didn't have to think of it as a separate construct because they could not only be with that but they could also buy nfts with that it's a fairly simple concept but that simple concept really they're just satisfied a massive gaping hole in the market I would say it's similar to you know when you look at what protocols have really enabled growth and the D5 world when you look at something like uniswap it's like not necessarily the most complicated idea and the product itself might be quite

simple but it can serve a need that wasn't really being met before and similarly when we think about blur at its core it's a very simple product and protocol but it's just really meant a need that wasn't being filled at all before certainly and I did hear you say that you started working on blur 394 days ago uh 94 was that right yeah 94. okay so a little bit over a year a year and a month uh and so a year and a month later since the Inception of beginning to work on blur uh you guys released the token uh the token airdrop and of course this is why we're doing the show today of all days is because tokens are exciting people love to talk about tokens and so uh can you talk

about just the the story of the token as I understand this was a multi-phase uh iteration of getting a token out into the wild can you can you walk us through that story of how the token was incepted and born and now released to the public yeah totally so the token was planned you know really everything that we feel Epler was planned from day one you know it would really just be like if you imagined the market as it is today in tokens and then just just take out every other exchange besides coinbase you'd be like oh my God there's a huge opportunity to just build like Finance or any other crypto native exchange and you know it's just gonna work you just need to build it that was basically the

position that we found ourselves in 394 days ago and we're looking at the market you know both for ourselves as traders in the market and then as Builders it was very clear that none of the marketplaces were really thinking about the space in this way and when we think about the power of web3 something that we really take a lot of inspiration from is really when you look at defy you know it's really just not possible in web 2 to actually give the end users control over the platforms right there's always this delineation between the platform and the user and there's actually usually very combative whereas in web 3 you're actually able to give the end users control over the protocol and they can actually control the value

accrual and distribution and you can align incentives in a way that's just frankly not possible in web 2. so when we thought about what made sense for this space it was really interesting because nfts are you know a completely new asset class they enable decentralized ownership of digital Collectibles and they were all being traded on what was effectively a web 2 Marketplace and that just didn't make any sense to us you know when we thought about this Market it was clear okay there's a gaping hole in terms of serving the pro users and then also there's a gaping hole in terms of aligning the business model of the infrastructure with the users of that infrastructure and it was just very shocking to us because it just

felt like at multiple levels the space wasn't really operating in an efficient way even though nfts are so adjacent to D5 and tokens and it's just like so clear just like you take a step across the line it's just like wow this is this is just like a very similar to space that's just not even paying any attention to what's happening you know in defy our tokens and that's really the position that we found ourselves in when we started working on blar and so the idea was always hey we're gonna make an nft Marketplace and it's going to have a token because openc is constrained by nation state regulation and the chasm of being web 2.5 and so the idea was to make an nft Marketplace to be a better trading experience but

then also have a token from day one so the token was in the plan from day one right yeah exactly and it's very much similar to you know ultimately it's if you look at every protocol today right it's a lot of the differences whether you set out to build it in a decentralized way or not from day one like uniswap could be a centralized Casino product you know they could kyc every user they could have restrictions and you know it was built in such a way that enabled decentralization but you could imagine it as a web 2 product if you wanted to be very easy to but they built it in a way that actually enabled the decentralization similarly when we looked at the marketplaces it was very clear that all the marketplaces were

built you know at least at the time there's been some you know some more experimentation and Innovation since which has been great to see but ultimately the majority of the market share was on marketplaces that were built in a very web 2 fashion it was very clear that you know decentralization wasn't something that they really you know focus on from day one whereas when we look at the space it was just like you know how it was just kind of so obvious it was like how can we not build it in such a way to actually enable the end users like when they think about a protocol that is managed by a single entity that's running a very web two-way versus a protocol that has the end users controlling it and that those end users are the ones that make up the network effect of the protocol and ultimately

Network effects are everything when we think about that comparison is very clear to us that a protocol that has the end users having control is the one that's going to win so that's really the impetus for why it made sense to for us to build it in such a way that we could do this right and that's of course the just uh what the web 3 philosophy really is and it's one thing to be able to create a token and say hey we can get this into the hands of the community but then actually getting the hand the token into the hands of the community is a different story can you talk about the strategy for how you how blur um released the token in ways that found so that so that the token would find its way into the hands of the aligned

community members yeah totally the number one cardinal rule that we had when thinking through the airdrop was to only ever incentivize liquidity never volume the issue with volume and I think we've seen this play out many times in the D5 world but the issue with volume is that you immediately just get watch Traders or arbitragers and they'll they'll just it's just a simple mathematical equation right they'll do the calculation and they'll figure out okay if I you know fake trades this many trades I'll make this much profit and I can just keep on doing it until you know it's no longer EV positive and that's exactly what has happened with some of the other marketplaces that tried incentivizing

volume if you look at what really works well in D5 regularly like that curve they don't incentivize volume they just incentivize liquidity right on either side of a Peg and that liquidity actually helps maintain the Peg and when people want to trade the incentive to trade is because you have good liquidity so ultimately when we thought about how do we construct this airdrop to get the hand the token into the right hands it was very clear to us that incentivizing liquidity and not volume was the right solution because that actually can bring real users into the space and those real users if you take away the incentives can actually stay around and maintain the network effect and we actually experimented with this by we sequenced the airdrop rewards so the

first airdrop period was for listing on blur so providing ask side liquidity first before we talked about that uh airdrop periods can you define that real quick oh yeah totally so this is something somewhat untraditional that I think we did was we basically made the airdrop very very explicit and instead of just releasing the protocol and then not saying anything and then dropping a token you know months later um we made it very clear in order to get the airdrop you needed to provide liquidity to blur first on the ask side and then on the bid side and we did that because when we think about

foreign as a motivator of behavior it seems like a somewhat of a waste to do a completely retroactive airdrop because when it's retroactive if it's purely retroactive and everyone was already using the protocol then you're really just burning a lot of dry powder that the protocol could be using to actually grow itself right when you think about if you were to think about any sort of you know CEO operating if the CEO were to just go and spend you know 10 million dollars on an ad campaign that that didn't do anything for the business you'd be like okay you're a terrible capital allocator and that's just a waste of money you know

maybe there's some brand building that you know you can definitely you can definitely say that it does some brand building it's not completely zero But ultimately you know if a protocol could utilize 10 million dollars to actually further the growth of the protocol so that actually can actually grow even bigger and maybe next time around not give out 10 million dollars but maybe give out 20 million dollars or if you do it effectively maybe instead of 20 million dollars you can get about 50 million dollars you know I think if a protocol utilizes its funds and treasury effectively then it can actually be growing in a way that's very conducive um to the end goals of the protocol and so when we thought about the airdrop it didn't really make sense for us you know when we when we were thinking about butane blur it didn't make sense for us

to do it retroactively once the network effect was built we thought you know why not reward the users that are actually building up the network effect you know from day Zero and that's really why we made this airdrop a multi-round airdrop heading into the token launch right multi-round airdrop and importantly making the criteria for receiving the airdrop explicit which is something that other airdrops would not do it all because that they would be worried about airdrop farmers and airdrop Gamers just just uh spamming the system but it sounds like the criteria for actually receiving the airdrop I'm assuming uh has been determined to be things that are ungameable is my intuition correct

here yeah exactly and that's not to say that this is an easy problem at all even if you know especially I think we ought to just know whenever you make an incentive system explicit it's just inviting people to come in and game it you know many of our um you know early investors actually you know made their wealth just figuring out these early uh D5 summer incentive systems and you know utilizing them in ways that you know maybe the protocol creators didn't even think about um but ultimately it was what was enabled through the incentive design so it's something that's very tricky But ultimately if you are incentivizing liquidity it and in your standardizing real liquidity that's something that's

quite difficult to gain because whether um farming or a real bidder for example you know liquidity is liquidity someone can go and take my bid and and now I now I have you know the other side of that trade and I just took risk by putting that bid onto the order book you know that's that's real risk you can't really gamify that maybe you can hack it maybe there's a way for you to you know remove your bid right before it gets you know maybe like front run the trade or something like that like there's there's things you have to watch out for like that but outside of just like especially hacking the system in that way if you think about what incentivizing liquidity does it actually brings real value to the network and so that's what we really focus on was you know can we come up

with a formula that enables the users to actually provide liquidity in a way that's you know difficult to gain difficult to hack and if we can do that then actually making the system explicit works really really well it doesn't work for for all types of protocols and all types of airdrops like I don't think this is a one-size-fits-all solution but for blur where it's very important to build a network effect to and build liquidity onto a Marketplace that was you know going up against incumbents that were already worth you know tens of millions of dollars is very clear to us that you know we had to really focus the efforts on things that would grow the protocol okay so let's walk through the three

phases of the airdrop criteria is that right and and so can you walk us through the each phase and or the goals of each one yeah totally so there are three phases the first was uh it was a retroactive uh trading airdrop um basically based on your you know volume for the last like six months prior to uh October 19th um the second one was a listing airdrop so by listing on blur and providing liquidity onto player's order book you received uh rewards for that and then finally the third airdrop was the bidding airdrop so we shifted the

rewards entirely from listening over to bidding and interestingly once we stop the listing rewards we saw the ask volume so this is volume from people buying listings on blur we actually saw it grow after we stopped those listing incentives so that indicated to us that you know basically the plan worked it actually did bring real users into the protocol and they stuck around and then you know we focus on purely incentivizing the bid side liquidity um and then you know basically that just fills up the order book right you have the ask side you have the list you have the bid side now you have both sides um not necessarily the most complicated Concepts but you know that was the

strategy that we took to you know basically build up a network effect for the marketplace did you accidentally move the prices of any nfts in the process was there what was like the collateral effects of this you know it's really interesting because um there is this one tweet thread when we shifted the uh well one is when we when we first did the listing incentive people were saying um blur was hurting floor prices and then uh when we switched over to the bidding incentives you would think okay if you switch over the incentives to the other side then clearly people will Intuit that this is going to support the floors prices um and and it did have an effect on the flood prices but there is this

um there's a thread that went really viral where um this person was basically tweeting that uh blur's incentives were hurting your floor prices and there's nothing you could do to stop it and it was actually a very catchy thread um they wrote In Like A Very like just like viral like memetic way um and then everyone was coming out and being like Oh like is blur bidding like hurting for prices and it was just like it was the most shocking thing because if you just study any sort of financial Market it's like a bid wall is only going to support the price of an asset it's just um it was just such a shocking concept and and to see it actually gain Traction in the market uh was was a very interesting learning experience um and then uh actually now a month you

know two months later um as we were heading into the token launch a lot of people were speculating that the incentives was sop and then the same person that um started the viral thread that blur was hurting floor prices was now tweeting that you know blurs a lack of incentives you know blurs incentives ending was going to crash four prices yet again so it was it was really such an incredible shocking uh sequence events where it's like you know listing incentives hurt floors bidding incentives hurt floors the lack of video centers for floors it was like wow I was like you you incentivize anything it doesn't matter which way you do it you're just gonna destroy the floors apparently um well this this sounds like a very like typical crypto Twitter if it bleeds it leads

in Rage marketing tactics if you ask me yeah yeah that's a really good way to frame it I hadn't heard of that term before but I do think it's it's um it does strike me as rage marketing but um you know with that said I do think that you know ultimately liquidity liquidity doesn't really change the price of an asset so much as it really enables the asset to find its true market price and if the liquidity changes the price then I think that what that really means is that the price that people perceived before was was not really an accurate price right because the the floor price

or you know the the bid ask Middle Point right the spread there and whatever whatever the mark price is like that's not really the true price like when we think about the price of an asset a static number doesn't really accurately capture what's going on right and people just anchor around specific numbers right and so I think that when you have these liquidity incentives it just it gives you a different picture of the true price of the asset But ultimately it's still just you know you're kind of just like looking at like the leg of the elephant versus like the trunk of the elephant right um and that's I think what it really all that it did sure yeah the the momentary price of something is just a snapshot of the overall picture

uh and I I would like to also get the the snapshot of the current state of the token so uh how many people got the airdrop uh what is the supply of the toe token out of what's the outstanding supply of the token versus the the total the rest of the supply like can you just walk with me walk me through some of the uh the metrics around the token yeah totally so the total supply of the token is three billion three billion blur the airdrop was 12 of the supply so 360 million blur um I need to check the metrics but I believe like a very large portion of the airdrop has already been claimed like I think it's like 200 million of the 360 million or maybe like 240 million at this point I

honestly don't know um but a large portion of the airdrop has already uh been claimed and and can be claimed over the next 60 days um ultimately the blur token the tokenomics I follow a very similar structure to uniswap actually when we thought about what made sense here you know if you think about blur as a protocol you know uniswap is in exchange for tokens and blur as a protocol as an exchange for nfts and so if you zoom out and squint those are basically the same thing and when we thought about what made sense clear I think especially in a bear Market where there's more what we've seen is that there's more of a

return to fundamentals and a return to value and we wanted a simple tokenomic design that had a very clear story for Value so having a tokonomic design so much uni made a lot of sense to us because it's just so simple and easy to understand you know curve is really a phenomenal protocol we really like GMX as well like these are really interesting protocols that have really you know complicated to economic designs that very few people understand and I think that those sorts of protocols are incredibly powerful in a bull market when the market is more willing to experiment with creative schemes but in a bear Market we think that there is a more basically a return to value and we what

we wanted to do was basically maintain flexibility at the protocol level so that the community wanted to they could vote and utilize treasury tokens for future tokenomics you know Common Market but in a bear Market still have a very clear picture for why this protocol makes sense you know why holding the token gives you as a holder you know power over the protocol that was really how we thought about modeling it so I definitely want to ask a little bit more about about that but just some some numbers about the the price of this thing since we are now in the a post drop world uh at 70 cents which is what is currently trading at on on coin gecko uh and three billion token Supply that is a market cap of 2.1 billion dollars

uh and when you said 12 uh airdrop to the community that is uh if I'm doing my math right I don't think I am uh it's a 2.1 billion dollars times 0.12 is that right yeah I think it's like 240 million around oh no that was right yeah so 250 million dollars of value air dropped to uh to some number some thousands of people uh and that's just season one and season two just started we'll have to ask about that first what how does just like reactions to the two billion dollar market cap and also reactions to giving 250 million dollars towards how many ever in thousands of people there's

reactions to that yeah I think um you know first first reaction is you know definitely like I shared at the beginning of this call please when we think about the protocol and the token and and giving value to the community you know I didn't mention this at the beginning but one of the other reasons that we thought a token made sense here was when we when we looked at the market it was clear there is all of this commercial activity happening on this web 2 cell Marketplace and you know if you looked at the value of that marketplace right it's like openc

and the bull market was you know raising at 13 billion I think I remember hearing that there were secondaries at like 18 billion but that value is you know just by no fault of openness it's just kind of due to how you know web 2 companies are structured it's very concentrated right it's concentrated in the founder is concentrated in like a16z you know a few other funds and that value does not go to the community the power of a protocol is that when you can protocolize something you can actually give away the tokens to the community and then you have when we thought about you know what what was possible here it's oh if we can actually execute in the way that we think it's

possible to execute in terms of pursuing this Market opportunity we have the value to give away you know billions of dollars of value to the community and when I think about as an end user if I'm going to choose you know a web 2 style thing where it's like okay I can you know I can use it and it works right it's like Facebook Marketplace or Ebay like that all works or I can use something that is actually going to effectively pay me to become a controller of that protocol for doing the same thing I definitely want to go and use the thing that actually gives me more control like it just it just seems like a completely plus EV move so you know being able to distribute in season one 240 you know million dollars worth of value 250 that's that's really

incredible but when we think about you know the reason for blur having a token in the in the first place you know really working with the community from here to be able to distribute even more values to the community that's something that's really incredibly exciting to us and that's something that is ultimately I believe in the best interest of the protocol and like I mentioned before I think that when we think about protocol governance and you know the allocation of tokens via protocol governance I think it's really important to think of it as you know Capital allocation and you want you want efficient Capital allocation you want to be allocating capital in this case you know the protocol is token treasury you want to be allocating it into productive use cases that further the growth of the protocol so we're

definitely going to continue trying to contribute in that direction and making sure that it's valuable but if the community does it right we should be able to do it in a way that is incredibly rewarding to other community members and I think that you know what was done today is kind of just a taste of that basically well I definitely have more questions because apparently we're about to go for round two with uh season two so I'm gonna I want to ask about that but I also want to just talk about the the royalties Wars because there's a topic of uh to that I want to address with uh with that and and others as well but first we're going to have to pause for a break because I know yeah this is a very been a very long day for you so I want to give you a quick break while we

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openc has Equity as we've discussed and uh as you said like all of the value of that Equity stays away from the world of web 3 this fantastic world that we're all operating in uh and so I was looking at doing analytics and to some of the volume numbers uh blurs starting to approach open C volumes and so question to you Pac-Man is now that blur has this secret weapon which is the token that's in the web3 world it's got a tool that open C doesn't have uh do you think that this is the tool that's going to allow blur Marketplace the blur Marketplace to Dethrone openc as the number one nft Marketplace yeah that's a great that's a great question and

you know actually I'm I am such a sickler on the on the metrics I do believe that in the past week blur has done around 30 more volume than open C but you're right that's something that has to be persisted for a long period of time before claiming that throne and I think that there's multiple Dimensions to this one is blur is fundamentally serving a segment of the market that no one was really serving well at all which was the pro Traders but when we think about the value of the token ultimately it is an incredible tool that enables huge unlocks that just weren't possible before even stepping back a bit when you think about the nft market and who wants exposure to that in the space it's not just the nft Traders it's not

just the users of the space but there's so many participants on the sidelines who are very aware of the growth of the space right all of the growth that blur has achieved has been in the wake of FTX collapsing the you know institutions that we all rely on for liquidity collapsing in the wake of that Luna collapsing you know all of the activity has maintained through one of the worst bear markets that we've ever seen so the nft space has really shown its longevity and stickiness effectively it's something that once people get in they really get hooked like that was the same thing that happened to me and when you think when you think about the participants that might want exposure to that you know before it was very difficult to get that exposure if you're a fund and you want

100 million dollars of exposure to the nft market you can't just go and spend 100 million dollars on nfts the space is just to a liquid for that and it'll just completely distort the prices but now that blur actually has leading market share in this space it has enough market share that it effectively becomes an index on nfts and not just on nfts but actually on the fastest growing segment of nfts which is the pro trading segment and that index is actually a huge unlock that can allow so many more players to get exposure to nfts in a way that just wasn't really possible before yeah so um when you look at the blur token how how does it express itself and I guess normally only the market can really determine this but like in terms

of like what it gives over like governance over the blur platform how do you think it's going to be received by like the financial world around it like what are people going to to when they see the blur token uh do you think it's just going to give them access to just exposure to nfts broadly without actually picking winners of nft specifically yeah I think it really depends on the participant right if you're someone that is an active nft Trader and you're you know in there grinding every day and just really you know in the space then it's gonna be more of a reward and exposure to the growth of a protocol that you use you know every day effectively but if you think about you know if you're a fund manager or if

you're someone on the side that you know it's a very it can be a very exhausting space it's not necessarily for everyone right but I think almost I mean it doesn't take a genius to look at the charts and see wow this space is really growing it's really sticky and it's getting so much adoption when we think about the potential you know if you just think about the next generation of consumers they grew up with digital objects right like buying fortnite skins and Roblox items in a way that Millennials just never really did so when you think about the potential of nfts it's just really massive and for those players blur now effectively becomes a way to get exposure uh in a very passive vehicle effectively so I think it is it is different for for everyone involved uh so let's talk about season two uh what

is involved with season two uh you said season two's already started so can you just tell us that story yeah totally so season two you know like we mentioned earlier the initial uh 12 air drop is all for season one there's still a fairly large treasury that the community can vote on to uh utilize right for future incentives uh or for other programs right it doesn't have to just be for incentive programs it can be for you know translation services building new sub-downs I really like maker Dow in terms of their efforts of starting sub-dials you know all around the world working on different initiatives I think that that's a really beautiful unlock of up3 but one of the core things that we can do is actually

continue the progression of the incentives because if you look at the nft market today the reason why we would do this you know like I mentioned before we stopped the listening incentives for season one and we saw the listing volume grow so when we speak about efficient Capital allocation it doesn't necessarily make sense to keep on allocating heavily into that but when we think about you know where do we go from here if you look at the nft infrastructure today it's still very primitive right like nft if you zoom out and think of it as an exchange it's basically like a spot exchange right it's very simple it doesn't really have any of these more interesting Advanced Financial Primitives and of course you can't just read as an exchange it is fundamentally a Marketplace because nfts

are a different asset class and they're not it's not an exchange it is very much something that is a combination of shopping and trading which is very interesting but if you look at just how it developed token infrastructure is it gives you a sense that there's a lot more to come in the nfu space as it develops and professionalizes and ultimately given that there is still so much to develop to us it doesn't make sense for those incentives to just completely stop because there's new behaviors there's new products that can be introduced you know not just from us as core contributors but from the community the community has shared some incredible ideas that I think are very exciting and those are all things that can be pursued you know in season two effectively yeah so it's just the general Vibe season one

is seeding the community with a token that they will then need in season two to govern and so like season one is distribution and season two is giving uh the community a voice and starting to incentivize governance not just usage of the protocol whether you is that a fair description yeah definitely definitely and there is a specific allocation so there's a incentive committee that can utilize up to 10 percent for season two or you know beyond rewards ultimately though anything beyond that is something that can be utilized via governance and you know whether they're you know like if you look at the recent optimism airdrop they actually just airdrop to people who

participate in governance that was very interesting and I think that that's going to teach a lot of people hey actually there's value in participating in governance because for a protocol that does provide value if you decentralize the holder base and decentralize the decision making even more so than it naturally occurs so when we think about what happens from here on the creative Space is really massive and of course you know thankfully the blur protocol has a very large treasury in which you can utilize these incentives to again allocate the capital in ways that are predictively growing the protocol yeah and uh of course governance is very very hard to game uh so there is no such thing as like governance farming uh so I would imagine that asking about season

three is just too far in the future because season three will probably only be determined by the governors that come about in season two is that right foreign I would think so yes yeah well congratulations background I know this is a very long day for you so thank you for taking time out of your very busy probably sleep deprived day to come and tell us a story of blur David thank you so much for having me wouldn't want to be anywhere else right now cheers I I did want to ask one last thing about um the the nft royalty Wars uh that is a whole entire episode in of itself uh but I just want to ask you to pick your brain really quickly about that it kind of sounds like there's uh from my defy side of my perspective here is that there's been this tug of war between

open sea and blur about how to enforce royalties and blur is fighting for the most optimized trading experience and uh open C is trying to optimize for artists and and royalties and there's been this tug of war here uh do you have any just thoughts or anything or any ideas you want to share about that yeah it's a great question I think that we definitely have different ideas on what will actually work in the space so just for a bit of context when about two weeks I think after launch or maybe three um open C kind of came out with a new policy where they said if you're a collection Creator you need a filter blur otherwise you won't be able to earn royalties on openc and when we saw that

policy you know we were basically like oh we can actually adopt this and start enforcing royalties on collections that utilize this ourselves because ultimately if they have a way to temporarily block trades that don't honor royalties and that's something that we can get behind and adopt the issue is that when a collection doesn't have the ability to do that then you know there are other protocols you know there are like amms for nfts there are you know zero royalty uh web 2 style marketplaces um that effectively take a you know royalty evasion approach for growth and there's nothing that can really stop trading from going to those platforms and you know if You observe the market you can clearly see that this this

market and markets in general they do operate in an efficient way they do Trend towards lower fees over time and if you create an incentive for them to Trend to no fee venues right so if all the existing marketplaces enforce royalties across the board and they never change their position all that does is it's going to create an incentive for a new player to come in and say we're actually going to not do this we're going to be the bad guy and we're going to get all the growth because the market ultimately doesn't really care it's a molok trap yeah so when we thought about what made sense here it was really just about okay can we can we design a system that is actually going to reach a steady state

the thing that we didn't want to do is we didn't want to take a policy that sounded really good but wouldn't work for more than you know a month maybe two months and so we've tried to take a more you know thread the needle approach for example we adopted full royalties on all collections that had a filter in them not because the filters aren't circumventable ultimately I think in the D5 world you know people have explored this problem extensively and there isn't really a way to actually protect royalties in a fully on-chain way it just it just doesn't work you can always create a wrapper you can do something to get around it and it's not sustainable from a coding

standpoint so we know that an option filter won't work in the long run but if it works in the short run just because people haven't really updated their systems or you know players haven't come around you know circumventing them then that's something that we can adopt at least in the short term and that made sense to us which is why we actually adopted it within a week of of the release of the policy but then for the existing collections it's really been about how can we thread the needle so that we can actually increase the royalty enforcement without also increasing the incentive to depart from blur and go to another protocol that maybe is taking a more aggressive approach and so what we did was starting on January 1st we started enforcing a minimum 0.5 royalties we kind of evaluated the market and we felt like

0.5 was a reasonable minimum and we felt like the Traders wouldn't really leave blur you know with that fee and it actually worked really well and if you if you look at the fees chart token terminal has a really great fees chart for blur you can see you just shot up immediately afterwards and that was after evaluating okay we can actually do this without impacting market and effectively reducing the net royalties paid by you know because if we set you can imagine if we set the minimum to 10 what that would do is basically everyone would stop using blur and everyone just start using you know zero rot Solutions immediately so it just doesn't accomplish anything so we're basically trying to thread the needle I think that's really the main difference in approaches that we see I think philosophically we're probably aligned although we're definitely more on the

pro decentralization but I think that introducing any form of centralization in the native asset of the space just creates Supreme dangers you know it's imagine if like Satoshi Nakamoto just had like the ability to take away people's you know Bitcoins it would just be it would just kill the entire space automatically so we think it's very very dangerous and we really try to stay away from that but we are effectively trying to take a more game theoretic approach um I think it's a difficult problem but ultimately when we project out five ten years from now I don't think that we kind of are in these like constant battles and you know these like skirmishes that just like never end I think that there is a steady state and

ultimately we're trying to push ourselves and push the nft space towards that set you say we don't quite know what it is but I feel fairly confident in knowing what it isn't and you know what the space was doing before really isn't a steady state because it was just clear it was it was just in case yeah yeah it was just unstable so we're trying we're trying to figure out you know what is what is stable and you know like like I shared like when when we launched bidding and the incentives that people were saying that uh Blair was like hurting floors like no matter which way we did the incentives um it's been an interesting experience because the market doesn't necessarily always come to the same conclusions that that we do even though sometimes we think that they're fairly straightforward conclusions

um but you know that's just that's just a part of being an operator in the space and that's another uh aspect of you know applying this game that we just have to navigate sure of course and and I really do appreciate the thoughts and that you've thought so much about this it sounds like it's a very uh coherent strategy that you guys are are running with so uh thank you for everything you're doing for for moving the space forward and I'm excited to see the uh the future of blur uh Pac-Man if people want to learn more and they don't know where to go where should they go yeah the Twitter is definitely the best starting point it's blur underscore IO um there have been an incredible number of scams and phishing attempts though especially around our uh token launch so just make sure to type in blur

underscore i o or if you want to be safe go to blur dot IO go to the website directly but we link to everything you know from the official website uh and before clicking any links please please please please double check the URL maybe type it out yourself uh L and I on most platforms look exactly the same it's a terrible thing they should use a different font but L and I looked exactly the same so it's super easy to get fish you know type in blur and check check our outplays awesome thank you so much Pac-Man and I will finally give you some rest for what has been I'm sure one of the longest days in your life uh but thank you for coming on Bank list and telling us a story thank you for having me cheers Bank

location you guys know the deal risks and disclaimers crypto is risky D5 is risky nfts are risky so is getting fish so be careful when you type in that URL but nonetheless we are headed west this is the frontier but we are glad you are with us on the bankless journey thanks a lot