INTRODUCTION
Are Solana NFTs dead? Many people have been sentencing the NFT ecosystem to death, based on the negative growth of 2023. Although most metrics point to a slowdown in activity, is it really fair to name the NFT ecosystem dead? Data says otherwise.
NFT TRENDS
The Solana NFT Ecosystem is one of the most lively in the crypto space. Data shows that Solana is the second biggest NFT ecosystem in the crypto markets.
Ethereum has consistently led the NFT market in terms of trading volume, daily buyers and traders. In July, August and September, Ethereum recorded $272M, $226M and $174M of trading volume, respectively. Solana saw in July, August and September a trading volume of $37.5M, $34M and $27M, respectively. Polygon has been catching up in Q3, with a combined volume of $92M, which is $6.2M less than Solana’s Trading Volume.
Solana speeds up NFT narratives due to its low transaction fees, speed and high social engagement. For instance, Solana went through the 0% royalty debate in September 2022 and found a solution to royalties in early 2023 while on Ethereum the debate only started in early 2023. To this day, there is still no consensus or a unified solution on Ethereum.
SOLANAFLOOR INDEX
The SolanaFloor NFT Index consists of a carefully selected basket of Bluechip collections based on multiple weighted criteria: volume, social trends, age, and other statistics. This basket is reviewed monthly.
The SolanaFloor Chart presents the index in SOL (green) and USD (purple).
USD INDEX
In dollar terms, the SF Index is at hovering around the quarterly lows. The SEC suit against Coinbase and Binance deeply affected the overall markets, and the Solana NFT ecosystem was not an exception. The recent bullishness on the Solana token has caused a strong move in the SF Index in USD terms, reaching monthly highs.
SOL INDEX
In SOL terms, the SF index has tightly followed the price of SOL. Theoretically, the NFT market should inverse its native token price, meaning that the floor price of an NFT should increase when SOL goes lower, and it should decrease as the SOL price goes higher. Recent price action history is evidence that this is not always the case, especially in a bear market.
September has seen a period of consolidation, which is signaling a possible bottom formation that can lead to a growth phase.
NFT TOTAL FLOOR VALUE AND VOLUME
The broad NFT ecosystem has been in a deep bear market over the course of 2023, although the sentiment significantly deteriorated in Q3, with the collapse of the Ethereum NFT ecosystem sparked by a deleveraging event. Other NFT ecosystems like Solana have been severely affected, as data shows. The Solana NFT Floor Value and Trading Volume saw a 30% decrease in Q3, indicating that many market participants may have abandoned the NFT ecosystem in the last months.
The recent stabilization in floor prices and trading volume suggests that a bottom may have been found in September, adding more evidence to the thesis that growth may be coming in the next months.
SELLERS, BUYERS AND TRADERS OF NFTS
Similarly to the Solana NFT Floor Value and Volume chart, we can conclude that the NFT ecosystem has lost a considerable number of its monthly users.
CONCLUSION
The Solana NFT market is as alive as any other major NFT ecosystem such as Ethereum. Narratives such as Idle Gaming are exploding in growth with projects like The Heist and Reavers shining in the bear market. Although data does show that broad NFT ecosystem has significantly slowed down in the last months, many indicators point to a possible bottom and beginning of a growth phase over the fourth quarter.