Given the Solana NFTs unfamiliarity, Solana’s early phases were undoubtedly difficult, but it gradually gained recognition.
Related: Apple Forces Coinbase to Disable NFT Transfers on Its Wallet App
The cryptocurrency industry has been rocked by the fall of the FTX enterprise. The market is recording its losses as digital assets struggle to rebound. One of the most severely affected ecosystems last week during the sharp selloffs was Solana. More harm has been done than good due to its strong ties to and interactions with FTX.
Solana: an alternative ecosystem
Although Ethereum is where the majority of NFT trading takes place, Solana has arisen as a different ecosystem that has drawn numerous NFT traders, collectors, and constructors. Solana was primarily created with the idea of widespread adoption in mind. So, speed and scalability are its two main pillars. By surpassing Visa’s and matching Mastercard’s transaction speeds, Solana has solidified its position as the industry leader in speed and scalability. Solana NFTs gained momentum due to higher fees and the ability to process hundreds of transactions per second. It was the second-best option for NFT customers and producers due to its network efficiency.
Solana did benefit from months of rising NFT mints and daily quantities that were comparable to Ethereum. Thoughts started to shift after Magic Eden, its primary marketplace, switched to zero royalties.
The downtrend in Solana NFTs
Magic Eden is the preferred marketplace for Solana NFTs, as was already indicated. Magic Eden’s traffic and unique active users drastically decreased the previous month. Low trade volume was observed in October. In fact, since May 2022, it had been the slowest trading month. Additionally, we noticed a dramatic decrease in daily transactions on several Solana NFT platforms. Additionally, there were fewer trades last month.
The Solana Floor NFT Blue Chip NFT Index likewise revealed a declining blue chip NFT market.
Additionally, Solana’s network statistics have been rather poor for a few months at this point. Messari’s Real Volume metric has been falling all year.
The number of NFT buyers in Solana peaked in September, but this trend didn’t last and quickly came to a stop. Although there were frequently many buyers on Solana, the sales figures themselves haven’t been particularly spectacular. A widespread lack of interest in Solana NFTs is inferred from the multiple data sources. With the FTX problem, Solana’s situation is getting considerably worse.
Solana Unlocks and FTX
The Solana foundation and SBF, who founded FTX, had a strong relationship. He contributed to Solana’s private token sale in 2021 as an early investor. In March 2022, FTX and CoinShares will introduce a Solana-based exchange-traded product (ETP). The second-largest holding for Fried’s Bankman-trading business Alameda was $SOL. Alameda Research has $1.1 billion in SOL on its balance sheet, according to Coindesk. That is greater than 10% of the Solana that is available.
Alameda’s SOL tokens may need to be sold out to increase liquidity, according to these worries. Additionally, 30 million unlocked SOLs have lately been released into the market by Solana validators.
These occurrences have caused the price of SOL to drop to a historic low of about $12 earlier this week. Solana has lost all FTX and Bankman-Fried assistance and investment as a result of FTX declaring bankruptcy.
Future of Solana NFTs ?
Nansen’s NFT-500 indicator shows that within days of the FTX news going public, the price of NFTs on the Ethereum blockchain fell by 14%. The impact on Solana NFTs was far more severe. In the last few days, SolanaFloor’s entire floor value decreased by 68%, from $424 million to $135 million. On Solana, a lot of high-end collections underperformed.
Many Solana NFT holders left the ecosystem out of concern for a possible implosion. It is evidenced by the odd increase in trading activity in Solana marketplaces. Throughout the crisis, MagicEden’s weekly trade volume increased by an astounding 700%. Additionally, we noticed a threefold increase in the number of merchants.
The floor costs, however, were declining. A rise in volume and traders is typically a positive sign. It might signal that the ecology is accelerating. Rising floor prices generally follow this.
However, in this instance, it is reasonable to assume that the movement was caused by Solana NFT holders selling their holdings and leaving. The sell-off demonstrates that investor trust in Solana has been weakened. It might discourage programmers and producers from adding fresh dApps and NFT libraries to Solana.
In the end, the recent incidents and their knock-on repercussions might impede the growth of the Solana ecosystem. At this point, it is unknown how much harm has been done and how many firms and their treasuries were trading on FTX due to the constant flow of new information.
There are rumors that some of the best NFT collections will leave Solana for other chains. This covers rumors about the possible migration of y00ts and DeGods to Ethereum.
The top blue-chip collections inside Solana NFTs are y00ts and DeGods, both of which were founded by the same person, Frank. At the moment, DeGods has the second-largest trading volume and the highest-priced floor. On the other hand, y00ts has the biggest trading volume and the third-highest floor price. The DeGods NFT collection is frequently referred to as the face of Solana NFTs, much like CryptoPunks or BAYC is for Ethereum.
Such collections’ movement might have a damaging, long-lasting impact on the Solana NFT space. It might also cause several other collections to move.
Having said that, the ecosystem may not have been sustainable in the first place if one collection disappears and the entire system collapses. Solana NFTs’ future is questionable. Who will stay on board and who will abandon the ship is unknown.
Positive Outlook for Solana
However, Solana is regarded as having one of the most advanced ecosystems in the cryptocurrency world. The protocol remains in the news despite FUD.
One of the leading creators in the NFT industry is Mike Winkelmann, best known by his stage name Beeple. In order to introduce immersive 3D NFTs, Beeple is reportedly joining Solana NFTs.
Additionally, Solana has announced plans for a smartphone that will only use cryptocurrencies and just teamed up with Coinbase Global (NASDAQ: COIN). In other news, Google Cloud will shortly start validating Solana nodes. Raj Gokal, co-founder of Solana, offered a rather upbeat prediction for people creating their businesses on the blockchain in the middle of the confusion that gripped the community.
Other top layer-one protocols and their evolving NFT ecosystems may be chosen as long-term bets by investors. Consequently, these alternatives may perform better as a result of the doubts and FUD surrounding Solana. However, with so many developers, project teams, users, and overall value now locked in, it will take some time (if at all) to find a competing NFT blockchain to Ethereum. Cardano, Tezos, and Aptos are possibilities.
More to read:
Follow Crypto Stoshi: Twitter, Telegram
Disclaimer: This blog is for educational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.