Why Solana NFTs May Stay On Top Despite Market Drawdown
Skerdian Meta • 6 min read
A few months ago, The NFT (Non-Fungible Token) market received unprecedented attention and generated buzz. Individuals and developers leveraged blockchain technology to create digital arts, mint them and sell them to investors and enthusiasts on the NFT marketplace.
At the booming phase of the NFT market, celebrities, top individuals, and big investors were jostling to own a piece of the NFT collection or more. The likes of Lil Baby owned a mutant ape yacht club collection, Justin Bieber owned the Alien Frens collection, and Timbaland owned the Bored Ape Yacht Club, amongst others.
These NFT collections owned by celebrities were very expensive and available in limited pieces. They were called Blue-chip NFTs. As the saying goes, “nothing lasts forever,” which indicates that the NFT market is sloping down and is currently in its draw-down phase.
A close look at the NFT market, the transaction volumes, the price value of major collections, and some other market indices show that the once-booming market might be heading for its bearish phase.
Amidst this drawdown, some NFT collections, such as the Solana NFT, remain strong and have not witnessed a decline in price value. What could then be the reasons why Solana NFT remains top of the market while other collections face a crash? Find out in this article.
Is the NFT Market Crashing?
According to Forbes, the market capitalization of all collections listed on NFTGo, a foremost data aggregation platform, has dropped by over 40%. That is, in January 2022, when the NFT market was at its peak, the market cap of all collections on NFTGo stood at $37.2 billion. Today, the market cap has fallen to about $22.2 billion.
Similarly, the daily trading volume of all NFT collections rose to about $800 billion in January. At the beginning of October, the trading volume dropped by 95% to $40 billion.
In the NFT market, some collections are called blue-chip collections and are regarded as top performers. The report shows that the floor price of these high-performer collections has dropped by about 79%.
For instance, the Bored Ape Yacht Club (BAYC) collection has dropped by 52% when denominated in ETH and 80% when denominated in USD. Similarly, Mutant Ape Yacht Club (MAYC) and Moonbirds are blue-chip NFT collections that have also dropped significantly either in ETH denomination or fiat.
These statistics and reports show that the NFT market is crashing. Investors who had these collections in their portfolio a few months ago are now running at a loss. Still, not all is lost as crypto trading platforms like Bitcoin Profit help investors minimize the risk and predict such plausible scenarios thanks to their advanced trading algorithms.
The price value has fallen, and the entire market is in its drawdown phase. Albeit, Solana NFTs seem unaffected.
Is Solana NFTs Unaffected by the Drawdown?
Amidst the overall decline in the crypto market and the continuous crypto winter that has seen the crypto market shed over $2 trillion since November 2021, some individual NFT projects remain unbothered and are gaining steam.
One of those NFT projects that keeps retaining its top spot amidst the market drawdown is Solana NFTs.
According to DappRadar, an online platform for tracking and trading NFTs, the NFT trading volume in September 2022 rose to $947million. A slight increase from $927 million and $916 million in July and August, respectively.
You would recall that in January 2021, the NFT trading volume rose to a whopping $5.36 billion. A comparison of the trading volume between January and September shows that the overall trading volume of organic NFTs dropped by 82%.
Amidst this decline, DappRadar reported that Solana NFT collections recorded about $133 million worth of sales in September, having recorded about $68.5 million worth of sales in the previous month. This sales volume shows about a 50% increase between August and September.
According to Dune Analytics, unique buyers of Solana NFTs increased by 34% in the last few months, while the Solana NFTs market share rose from 7% to 24% across the entire NFT market.
Similarly, Magic Eden, the top Solana NFT marketplace, recorded a total trading volume of $127million in September. What makes this figure significant is that Opensea, which used to be the foremost NFT marketplace, is now being rivaled by X2Y2 and Solana-owned Magic Eden.
There are speculations that in the coming days, either the Solana-owned Magic Eden or X2Y2 will displace Opensea. Magic Eden, in particular, is touted to displace Opensea due to its continuous top-spot retention in the NFT market.
It is important to know that there are a few reasons why the Solana NFT has remained top and seems different from other NFT projects affected by the market drawdown.
What Makes Solana NFT Stand Out?
Some of the unique features of the Solana network that makes its NFT standout includes;
The Low Transaction and Gas Fee
The Solana protocol has lower gas fees and attracts a very low transaction fee whenever it verifies the validity of new transactions. The protocol uses the proof of stake (PoS) and Proof of History (PoH) consensus mechanism, thereby making it charge less transaction fee. The gas fee on the Solana network is less than $200. That is less compared to protocols such as Ethereum.
According to Sam Martin, a research analyst at Blockworks, “Project creators can wash trade on Solana to artificially pump volume due to low transaction fees, whereas on Ethereum, that would be far more expensive.”
This low gas fee, therefore, contributes significantly to the increase in trading volume of Solana NFTs while the market is seeing a decline.
Launch of New Collections
The decline in the market does not deter the Solana NFT; they keep releasing and minting new collections. For instance, Dust lab is the developer of the “DeGods project,” Solana’s most valuable NFT collection. At the beginning of September, they released a new NFT collection called y00ts.
It is interesting to know that both y00ts and Degods collections have seen millions of NFT investors and enthusiasts minting their units. The y00ts NFT is touted to become a blue-chip collection.
Stephen Hess, the former Solana Labs product chief, and current Metaplex CEO said, “ the idea that NFTs can become “identity tokens” and foster community — including the especially tight-knit holders of y00ts and Degods is something worth betting on for Solana”.
At this juncture, it is expedient to identify some of the top NFT projects on the Solana network.
Top NFT Projects on Solana NFT
The Solana Non-fungible tokens are launched on the Solana blockchain. These collections have made the Solana NFT climb the top spot amidst the market drawdown. They include;
Officially, the biggest NFT project on the Solana blockchain is DeGods. For a collection that sold for a mint price of 3 SOL during its launch in October 2021, it now sells for more than 350 SOL (exactly a year after its first mint).
This Solana NFT is now considered a blue-chip NFT collection and is touted to become one of the biggest NFT collections across the entire NFT market.
The idea behind the DeGods collection is to give back to its holders in new ways at intervals. Celebrities such as IceCube are holders of the DeGods NFT collection.
Degenerate Ape Academy
This Solana NFT collection gives the first impression of cool and fun digital art that you should have in your portfolio. No wonder it is the most hyped of all Solana-based NFTs.
The idea behind the Degenerate Ape Academy is likened to gathering ten thousand smartest students, putting them in a place, and letting them “fuck shit up.” Undoubtedly, the idea worked out, and these collections are doing wonders in the NFT ecosystem.
The ABC Collection (AbarakaDabra)
This is a unique collection across the entire NFT market. The ABC Collection has no team, mints, royalties, or roadmap. At the project’s launch, there was no attached website or social media page.
The ABC collection shares the same developer and creator as Solana’s biggest whale project, HGE.SOL. According to hge.sol, the ABC collection was developed to bring back the simpler times and stress-free childhood moments we all experienced.
The ABC collection has 10,000 NFT units and has traded more high values than expected.
Y00ts Mint Toob
The Y00ts Mint Toob is considered the most hyped NFT collection on the Solana network at its launch. 15,000 collections were launched and were originally called “duppies.”
The procedure to become a whitelist buyer of the Y00ts Mint Toob took a different approach; instead of the usual raffle draw process, Deadgood NFT owners were automatically whitelisted. Therefore, they can participate in the scholarship, which would determine them fit enough to own a yoot. The mint price of a y00t stands at 375 DUST, equivalent to a little above 1000 US dollars.
Solana NFTs are Non Fungible token projects stored on the Solana blockchain. The Ethereum NFTs lead the trading volume and market cap of the NFT market, while Solana follows.
However, in the last 30 days, there have been more transactions on the Solana network than on Ethereum. While there were just 900,000 transactions on the Ethereum network, Solana saw about 2,220,000 transactions within the same period.
Amidst the crypto winter that has seen most crypto tokens shed their market cap, the Solana NFTs are increasing in transaction volume and market cap.