Liquidity conditions for NFTs today are highly exceptional. I don’t expect this to last forever — real interest in NFTs is still limited today. The massive liquidity on Blur likely starts to taper off from here. What are the implications? 

There is a cost to these exceptional liquidity conditions. Conceptually, BLUR tokens are paid out every single day to maintain these levels (even though distribution is at intervals)

Let’s assume Blur Season 2 lasts for 6 months and distributes 300M tokens. That’s 1.66M tokens/day = $1.3M at today’s prices. So it costs $1.3M/day to maintain ~$130M in liquidity.  Note: Blur has not revealed the length of Season 2 yet.

It’s pretty smart of the Blur team to keep the next airdrop distribution under wraps, without revealing too much. Unlike many DeFi protocols where yield farming APRs are transparent. It passes additional risk onto the liquidity providers, who have to live with uncertainty.

First major liquidity drop-off will likely be when the bonus 2X multiplier for bid/listing points ends on 1 April. There is real risk invovled in BLUR farming. For farmers without sophisticated tools, the risk-reward will be no longer worth it.