The decentralized ecosystem continues to evolve, driven by innovators who challenge existing paradigms. In a recent episode of The Decentralised.co podcast titled "Building from First Principles," hosts Joel and Saurabh sat down with Pacman, the founder behind both Blur and Blast, to discuss his vision for NFT markets, incentive design, Layer 2 innovation, and the current state of the crypto market cycle.
This article distills key insights from that conversation, refining structure, enhancing readability with Markdown formatting, and integrating core SEO keywords: NFT trading, liquidity incentives, Layer 2, yield-bearing assets, crypto market cycle, decentralized infrastructure, gas fee revenue, and on-chain innovation.
Rethinking NFT Marketplaces: From Consumers to Traders
When Pacman entered the NFT space in 2021—after selling his first startup—he didn’t approach it as a collector. Instead, he saw opportunity as a trader. After minting a Blitmap and selling it for 25 ETH, he dove deep into active NFT trading, building scripts to analyze metadata and track rare traits.
What quickly became apparent was the lack of infrastructure tailored for high-frequency traders.
"OpenSea felt like eBay or Amazon—designed for shoppers, not traders."
While OpenSea dominated with over 80% market share at the time, its user experience failed professional traders. Critical data like rarity scores, bid history, floor sweeps, and real-time listings were either missing or delayed. For someone used to Coinbase-like interfaces in token trading, OpenSea’s sluggishness was unacceptable.
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Pacman identified a fundamental misalignment: most NFT platforms treated users as passive consumers rather than active market participants. The reality? A significant portion of NFT volume comes from traders—not collectors.
This insight became the foundation of Blur: a marketplace built by traders, for traders, prioritizing speed, data density, and advanced tooling.
Why Blur Incentivizes Only One Thing: Liquidity
Many protocols rely on retroactive airdrops to distribute tokens. Users perform random actions across platforms hoping to qualify—minting, swapping, bridging—without contributing meaningful value.
Pacman sees this model as economically inefficient:
"You’re rewarding behavior you can’t measure, based on actions you didn’t define."
Instead, Blur adopted a transparent points system from day one. Users earn points based on clear, measurable metrics—primarily trading volume and providing liquidity.
But here's the crucial design choice: Blur only rewards liquidity.
Why?
Because liquidity is hard to fake. You can create 10,000 Sybil addresses, but you can’t fabricate $10 million in bids overnight. By focusing incentives solely on liquidity provision, Blur ensures that even "farmers" contribute positively to the ecosystem.
This approach aligns with economic reality:
- More bids = tighter spreads
- Tighter spreads = better execution for all traders
- Better execution = increased platform attractiveness
Unlike other platforms where farming inflates metrics artificially, Blur’s model drives real utility.
Blast: Solving Two Fundamental Gaps in Layer 2 Design
While building Blur, Pacman and his team explored various Layer 2 solutions. What they found was surprising: despite rapid innovation, most L2s shared the same limitations.
Two key inefficiencies stood out:
- No native yield on deposited assets
- Developers don’t capture gas fee revenue
In traditional L2s like Arbitrum or Optimism, when users deposit ETH or stablecoins, those funds sit idle—earning zero interest. Meanwhile, developers building DApps generate gas fees but see none of that income return to them.
Blast aims to fix both.
Native Yield on Base Assets
Blast introduces automatic yield on ETH and stablecoin deposits—similar to holding sDAI in MakerDAO (which yields ~7%). This isn't just a feature; it's a paradigm shift.
When base-layer assets earn yield by default:
- Users are incentivized to keep funds on-chain
- DApps benefit from higher retention
- TVL becomes self-sustaining
Compare this to existing L2s where billions in TVL generate no returns—an enormous market inefficiency.
Returning Gas Revenue to Developers
On Blast, developers earn a share of the gas fees generated by their applications. This creates a powerful feedback loop:
- More usage → more gas revenue → more resources for development → better products → more users
This model flips the script: instead of extracting value from builders, the network rewards them.
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The Current Crypto Market Cycle: Is It Really Over?
There's growing consensus that the current bull run lacks the transformative momentum of past cycles. While ETF approvals drove institutional inflows, Pacman argues we haven’t seen a fundamental innovation comparable to:
- 2017: ICOs enabling global fundraising
- 2020: DeFi and automated market makers (e.g., Uniswap)
- 2021: NFTs creating a new digital ownership class
Today’s narrative centers on faster, cheaper transactions—but not new use cases.
Google Trends data supports this view:
- Ethereum search interest peaked at 100 in May 2021
- Current cycle high reached only 26
That’s a 4x difference in mainstream attention.
Yes, projects like Pump.fun and friend.tech generate millions in revenue. But revenue alone doesn’t signal broad adoption. True cycles emerge when new people enter the space with new ideas.
We’re still waiting for that spark.
Frequently Asked Questions
Q: Why doesn’t Blur reward more user activities like minting or social sharing?
A: Because those actions are easily gamed. Blur focuses exclusively on liquidity—a metric that directly improves market quality and can’t be faked at scale.
Q: How does Blast offer yield without relying on external protocols?
A: Blast integrates yield-bearing assets natively. Deposited ETH is automatically converted into staked ETH (e.g., rETH), while stablecoins are deployed into trusted yield strategies—ensuring seamless, automatic returns.
Q: Can developers really profit from gas fees on Blast?
A: Yes. Unlike most L2s where gas fees go to sequencers or validators, Blast allocates a portion back to app creators—creating a sustainable incentive for long-term development.
Q: Is the NFT market still relevant in this cycle?
A: Absolutely—but its role has evolved. NFTs are no longer just profile pictures; they’re becoming tools for access, identity, and on-chain reputation. Platforms like Blur support this shift by serving professional traders who provide essential market depth.
Q: What would signal the start of a major new cycle?
A: A foundational breakthrough—like decentralized social graphs, scalable privacy, or AI-agent economies—that brings in millions of new users and unlocks previously impossible applications.
Final Thoughts: Building for Substance, Not Hype
Pacman’s philosophy is rooted in first-principles thinking: identify real inefficiencies, design systems that align incentives with value creation, and avoid chasing trends.
Blur succeeded not by copying OpenSea—but by serving an underserved segment: traders.
Blast aims not to be “another L2”—but to solve overlooked problems in capital efficiency and developer economics.
As the crypto space matures, projects that prioritize sustainable utility over short-term hype will shape the next era.
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