🌅 Welcome!
Andrew Ross-Sorkin of the New York Times hosted Sam Bankman-Fried in a live interview yesterday. Elsewhere, a pair of luxury German car manufacturers plan to enter the web3 and NFT space.
Today, we examine the rise of NFT marketplace Blur while our Research team highlights the top NFT projects that have seen the most amount of wash trading.
This is the Delphi Daily. Let’s dive in.
🚨 In Case You Missed It
- New York Times interviews former CEO Sam Bankman-Fried about the FTX collapse.
- Telegram plans to build a non-custodial wallet and decentralized exchange, among other tools.
- German car manufacturer Porsche announces an upcoming NFT project consisting of 7.5K tokenized vehicles.
- BMW may also be interested in web3 as the company applies to trademark its logo in association with a host of web3 services and products.
- Following its loss against the SEC in court, the firm behind the decentralized content platform LBRY says its days are likely numbered.
📊 Blur Captures Market Share Among NFT Aggregators
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Blur.io is a new NFT marketplace targeted at experienced traders and NFT power users. The platform offers an aggregation feature and portfolio analytics with zero marketplace fees.
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Blur was in closed beta for nearly a year before going live on Oct. 19, 2022. Blur also announced an airdrop of “Care Packages” for users who have traded on the platform in the previous six months. This includes an unspecified number of BLUR tokens.
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After launch, the platform achieved approximately 90% volume market share on Oct. 31, 2022 against competitors such as Gem and Genie. This dominance has persisted for nearly the entire month of November as well.
- During the Thanksgiving weekend, Blur briefly surpassed OpenSea’s volume with 40.3% volume market share on Ethereum compared to OpenSea’s 38.9%.
- The dominance in market share likely comes as a result of Airdrop 2 which will distribute even larger “Care Packages” than Airdrop 1 to users who list and trade on the platform in November.
⚡ A Primer on NFT Wash Trading
- NFT wash trading is a subset of price manipulation that occurs for two main reasons. The primary reason is to earn trading rewards from incentivized platforms such as LooksRare and X2Y2.
- The second reason is to manipulate the historical price and volume of an NFT collection. Deceiving potential buyers is generally uncommon and unsuccessful, but it exists.
- Wash trading results in distorted demand, volume, and prices. These factors can trick naive entrants to NFTs. When these users use LooksRare and X2Y2, it is worrisome that extensively wash-traded NFTs exist.
- Terraforms was the most wash-traded collection of all time, at $12B worth. Wash trading amounted to 99.8% of its volume.
- Meebits was the runner-up, with $9B in wash trading volume. Although 96% of Meebits’ volume is wash trading, this is notably lower than the less popular Terraforms, Dotdotdots, and Dreadfulz.
- Meebits is an airdrop of the blue chip PFP NFTs CryptoPunks, generating $1B in organic volume. Loot, a community-owned NFT gaming platform by the co-founder of Vine, Dom Hoffman, also receives significant organic volume.
- These NFTs appeal to market manipulators for two main reasons. Firstly, the collections are recognizable by the wider community. Secondly, the collections charge no royalty fees for creators.
- No royalty fees means a higher cost-benefit ratio for wash trading to earn trading rewards. NFT brand recognition can also result in mispriced assets selling at higher multiples and less risk in selling the assets after acquisition.
- For more on wash trading, Delphi members can read our Delphi Pro report here.
🐣 Notable Tweets
Summary of the NYT Interview with SBF
The New York Times was soft in its coverage of FTX’s collapse.
Thankfully, Andrew Ross Sorkin was not.
He put Sam Bankman-Fried to the sword at the NYT Dealbook Summit:
“Sounds like a bunch of kids who were on Adderall having a sleepover.”
Here are the other highlights:
An Example of AI Capabilities
omg. seriously mind-blown 🤯
we’re all gonna be out of a job 🤖
-devtooligan (@devtooligan)
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