Blur is shutting down its website, so why are NFT collectors cheering?

Making its first official announcement on the social media platform X in more than a year, Blur revealed on Monday that its website frontend will officially cease operations on Nov. 12. However, the protocol emphasized that its underlying onchain marketplace smart contracts will remain operational, allowing users to continue interacting with the base-layer technology without the primary web interface.

Alongside the website shutdown, Blend, the peer-to-peer perpetual NFT lending protocol developed by the ecosystem, will also wind down its operations by halting the matching of new loans. Blur noted that existing borrowers have until the Nov. 12 deadline to either fully repay their outstanding loans or allow them to default according to the protocol rules. The platform has also promised to provide a dedicated withdrawal interface following the website shutdown to ensure users can retrieve their assets.

Despite the technical distinction between the frontend website and the immutable onchain marketplace, the announcement immediately rekindled deep-seated grievances among digital artists and collectors. Many members of the Web3 community took to social media to voice their frustrations over Blur’s legacy, holding the platform accountable for what they perceive as the degradation of the broader NFT ecosystem.

"Good riddance. You destroyed NFTs. Please shut down and never come back," wrote prominent NFT collector Cryptobscure in a direct reply to the official announcement on X.

Another well-known collector, starfruit, echoed these sentiments in a separate post, writing, "You may not have been able to complete your mission to destroy NFTs. But you acted with extreme determination and tried everything. Congratulations to us for surviving you."

These reactions brought renewed attention to the controversial aggressive growth strategies that propelled Blur to the pinnacle of the NFT market charts back in 2023. At the core of Blur’s disruptive model were optional creator royalties and lucrative token incentive rewards designed to heavily encourage traders to engage in high-frequency bidding, buying, and flipping of digital assets.

The platform’s aggressive market entry accelerated a systemic shift across the broader industry toward lower creator royalties. Following Blur’s market pressure, rival marketplace OpenSea eventually followed suit by moving away from mandatory creator fees to optional creator royalties for new collections, a move that fundamentally altered how artists earned secondary-sales revenue.

Blur officially launched on Oct. 19, 2022, introducing a mechanism that allowed sellers to customize their royalty payments while offering larger prospective token rewards to traders who voluntarily chose to pay higher creator royalties. However, the marketplace entered a competitive landscape where royalty protections were already beginning to erode. Competing marketplace Magic Eden had already shifted to optional royalties just the week prior, signaling a race to the bottom among platforms seeking liquidity.

The impact of these policy changes was rapid and measurable. By July of the following year, blockchain analytics platform Nansen reported that effective creator royalty fees had plummeted to an average of just 0.6% in July 2023, a steep drop from an average of 2.5% throughout 2022. Nansen explicitly attributed a significant portion of this decline to Blur’s aggressive growth, its minimum royalty framework, and OpenSea’s subsequent defensive measures to lower its own royalty requirements to stay competitive.

NFT sales slump from boom-era highs

Blur did not disclose the specific motivations or underlying reasons behind its decision to shutter its website frontend and wind down new lending activity on the Blend protocol. The shutdown arrives at a time when the broader nonfungible token market remains severely depressed, trading far below the dizzying heights of the 2021 and 2022 crypto boom eras.

Comprehensive data compiled by CryptoSlam illustrates the stark contrast in market activity, showing that total NFT sales for the month of September reached $167 million spread across roughly 2.9 million total transactions. For perspective, the market reached its all-time high in January 2022, when monthly sales volume touched an astonishing $6 billion across 13.7 million transactions.

The difficulties facing Blur’s frontend and lending protocols reflect a broader wave of contraction, consolidation, and closures across the digital collectibles sector. Gemini-owned Nifty Gateway and social collecting platform Rodeo both announced plans to wind down their respective operations in January. Meanwhile, marketplace Foundation announced its own closure in April after a last-ditch corporate sale intended to keep the platform operating ultimately fell through. Major centralized exchange Binance also retreated from the sector, ending dedicated NFT support on its main exchange platform while shifting asset management functionalities over to the Binance Wallet.

Cointelegraph reached out to Blur founder Tieshun "Pacman" Roquerre for formal comment regarding the website shutdown and the future of the underlying protocol.