BLUR is About to Unlock 195 Million Tokens: Why the Expected Sell-Off Won't Happen?
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BLUR is About to Unlock 195 Million Tokens: Why the Expected Sell-Off Won't Happen?
On June 14, BLUR will unlock approximately 195 million tokens.
Navigating Web3 tides with focused insightsWritten by: Unlocks Calendar
Compiled by: TechFlow
On June 14—four months after the February 23 airdrop—BLUR will unlock approximately 195 million tokens.
Unlock Details
Let’s first review the unlock details. BLUR conducted an airdrop of 3.6 million tokens on February 14, 2023. The June 23 unlock will involve approximately 195 million tokens, allocated to:
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Contributors: ~115 million;
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Investors: ~75 million;
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Advisors: ~5 million
This will increase total supply by 6%, and circulating supply (market cap) by 30%, representing potential selling pressure of around $60 million.
Notably, insider allocations account for about 51% of the total distribution.
How Will the Unlock Affect Token Price?
When assessing whether the unlock is bullish or bearish, several factors must be considered:
1) What are the seed/private investors’ returns on investment?
On March 28, 2022, BLUR raised an $11 million seed round led by Paradigm, but the valuation for this round is unclear.
It seems reasonable to assume the valuation was below $1 billion. Investors in this round are currently in profit and may create selling pressure upon unlocking.
In February 2023, BLUR raised funds again at a $1 billion valuation. These later investors now have lower returns and may be less inclined to sell at unlock.
2) Is the team likely to dump their unlocked tokens?
Currently, it appears unlikely that the team will dump their token allocation at this stage. The team consists of exceptional builders who have already proven capable of challenging OpenSea’s dominance, and they’ve made highly successful initial decisions/actions.
3) Is the financial situation stable?
Apart from the frenzy in February 2023, since then BLUR’s trading volume has consistently remained over twice that of OpenSea.
The total value locked (TVL) in BLUR’s lending platform stands at $39 million—decent.
Current revenue is zero, but governance can activate a 2.5% fee.
4) Is the valuation reasonable?
BLUR appears undervalued. Applying a 25% discount to current annualized trading volume ($4.4 billion) and assuming a conservative 1% fee, projected annual revenue could reach €33 million.
The current fully diluted market cap is $931 million, resulting in an FDV/Rev ratio of 28x—this doesn’t seem excessive and aligns with valuations of traditional financial firms. OpenSea is currently valued at $3 billion with annualized revenue of $28 million—an FDV/Rev ratio of 107x!!!
5) Price Behavior
Due to recent FUD surrounding Coinbase/Binance over the weekend, prices have already pulled back by 40%. Shorts are expected to take advantage of external factors to book profits ahead of the BLUR unlock event.
6) BLUR Season 2 Airdrop
When evaluating BLUR’s price, keep in mind an upcoming airdrop of 300 million tokens (as outlined in BLUR Season 2). Over 300 million BLUR tokens will be distributed to the community in Season 2. Users with 100% loyalty can maximize their rewards.
The Season 2 airdrop may extend until October 2023. Since the 300 million $BLUR comes from the community treasury and 468 million vests in the first year, calculations suggest it would take roughly eight months to qualify for the full 300 million in the second airdrop.
TL; DR
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Large volume of tokens being unlocked.
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Except for seed investors, other investors may lack motivation to sell.
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Compared to OpenSea, BLUR appears undervalued.
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"Financial health" is solid, especially in terms of trading volume and lending TVL.
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Price has already declined 40% due to Coinbase/Binance FUD over the weekend—shorts have had opportunities to profit.
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Future negative catalysts (Season 2 airdrop) are distant and may instead incentivize participation during the interim.
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We do not expect significant dumping.
[Disclaimer] The market involves risks. Invest with caution. This article does not constitute investment advice. Readers should consider whether any opinions, viewpoints, or conclusions herein are suitable for their particular circumstances. Investment decisions based on this information are made at the user’s own risk.
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