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

The platform made the startling announcement on X on Monday, marking its first post on the social media platform in more than a year. According to the announcement, Blur’s frontend interface will officially shut down on Nov. 12. However, the underlying onchain marketplace infrastructure will remain operational, allowing basic smart contract interactions to persist for those who know how to navigate the blockchain directly.

Alongside the frontend website closure, Blend, the peer-to-peer perpetual NFT lending protocol created by the team, will also cease matching new loans. Blur has informed users that borrowers have until the Nov. 12 deadline to fully repay their outstanding loans or face potential default. To mitigate some of the fallout, the platform has promised to provide a dedicated withdrawal interface even after the main website shutdown is finalized, ensuring that users retain a technical pathway to retrieve their stranded assets.

The reaction from the digital art and collector community was swift, highly vocal, and largely hostile toward the platform’s historical legacy. Rather than mourning the departure of a once-dominant industry titan, many prominent collectors took to social media to express their grievances over the platform’s impact on the broader ecosystem.

"Good riddance. You destroyed NFTs. Please shut down and never come back," wrote well-known NFT collector Cryptobscure in a pointed reply to Blur’s official announcement on X.

Another prominent community member, an NFT collector going by the handle starfruit, echoed these sentiments in a separate post. "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," starfruit wrote.

These reactions brought renewed criticism back into the spotlight regarding the aggressive economic strategy that initially helped Blur skyrocket to the top of the NFT trading charts in 2023. Blur’s rise was powered by a potent combination of optional creator royalties and lucrative token rewards designed to incentivize traders to aggressively bid on and quickly flip digital assets. This rapid ascent heavily accelerated a broader industry shift toward lower creator royalties across nearly all major platforms. Rival marketplace OpenSea, feeling the immense competitive pressure, later followed suit by moving toward optional creator fees for newly launched collections.

Blur originally launched on Oct. 19, 2022, introducing a model that allowed sellers to customize or minimize royalty payments while offering larger prospective token rewards to market participants who chose to pay higher creator royalties.

However, Blur entered the market at a precarious time when royalty protections were already beginning to fracture. Competing marketplace Magic Eden had already moved to optional royalties just the previous week, setting off a race to the bottom among platforms fighting for liquidity.

By July of the following year, blockchain analytics platform Nansen reported a dramatic decline in the health of creator earnings. According to Nansen’s data, effective creator royalty fees fell drastically to an average of just 0.6% in July 2023, down significantly from an average of 2.5% throughout 2022. The analytics firm attributed much of that steep drop to Blur’s explosive growth, its minimum royalty policy, and OpenSea’s subsequent decision to lower its own royalty requirements to remain competitive.

NFT sales slump from boom-era highs

Blur’s official announcements did not disclose the specific strategic reasons behind the company’s decision to shutter its frontend website and wind down new lending activity on the Blend protocol.

The wind-down arrives at a time when the broader NFT trading market remains mired in a prolonged slump, trading far below the dizzying heights of the 2021 and 2022 crypto boom eras. Comprehensive data compiled by CryptoSlam indicates that total NFT sales for the month of September hovered at $167 million spread across approximately 2.9 million total transactions. For historical context, the market reached its absolute peak in January 2022, when monthly sales volume touched an astonishing $6 billion generated across 13.7 million transactions.

The closure of Blur’s frontend joins a growing list of casualties within the digital collectibles infrastructure space as companies grapple with sustained low trading volumes and depressed market interest. Gemini-owned platform Nifty Gateway and social collecting platform Rodeo both announced plans to wind down their respective operations in January. Meanwhile, Foundation announced its own closure in April after a planned corporate sale intended to keep the platform operating ultimately fell through. Major cryptocurrency exchange Binance also completely ended dedicated NFT support on its primary exchange platform, shifting asset management functionalities exclusively to the Binance Wallet.

Cointelegraph reached out to Blur founder Tieshun "Pacman" Roquerre for additional comment regarding the shutdown and the future outlook for the protocol’s underlying technology.