Ethereum: The Diminishing NFT Leadership
Ethereum, one of the earliest public chains, boasts a booming ecosystem that features all kinds of DApps, which justifies its reputation as the “king of all public chains”. Meanwhile, as the first application-oriented public chain, Ethereum has brought together most NFTs and crypto assets, including the first-ever NFT CryptoKitties and the most expensive NFT CryptoPunks, with extremely active transaction records.
Despite that, as more beginners have been attracted to Ethereum by a hundredfold return, the transaction cost of Ethereum NFTs has grown increasingly higher. Today, an NFT transaction could consume more than ten or even dozens of dollars in Gas on average. When the network is congested, a transaction might burn hundreds or even thousands of dollars in Gas. For instance, according to Glassnode, when Yuga Labs started selling Otherside on May 1 this year, over 70,000 ETHs were burned during the sale, and the average Gas fee stood at a staggering $197.
Ethereum’s expensive Gas cost has scared away tons of beginners. Troubled by performance issues such as network congestions, users have started to find the next “NFT playground” that does not require such exorbitant fees. Of the many Layer 1 chains, Solana has stood out in terms of NFT performance. Known for its high performance, Solana features high throughput (65,000 TPS) and almost negligible fees (about 0.000005 SOL), which enables outstanding NFT performance. With Solana, users no longer need to pay thousands of dollars in Gas for a $100 NFT. New public chains with high performance such as Solana have provided retail investors with new investment opportunities.
Solana NFT: Finding Another Way
During the one-year-long “NFT Summer”, the total market cap of NFTs once exceeded $38 billion at the peak, and the high returns attracted all kinds of investors to the market. However, the crypto market as a whole seemed sluggish as people expected the Fed to raise interest rates in April and May. After two weeks of continuous shocks, the NFT market calmed down. On-chain data from Dune shows that the transaction volume of ETH-based NFTs on OpenSea has kept falling, and the recent figure is less than one tenth of the peak volume. NFT projects on Ethereum have entered a tough winter season.
In contrast, Solana’s NFT market has gained popularity. This April, OpenSea announced that it will support Solana NFTs, making Solana the fourth public chain supported by OpenSea, following Ethereum, Polygon, and Klaytn. OpenSea’s support has significantly facilitated the provision of liquidity for the entire NFT ecosystem of the public chain, bringing more unique Solana NFTs to the public.
According to Dune, the transaction volume of Solana-based NFTs on Magic Eden has grown significantly throughout April and May this year. Additionally, data from SolanaFloor shows that the total floor price of Solana NFTs has kept rising over the past few months. These statistics are direct proof that Solana’s on-chain NFT market remains popular and has become growingly so during the past few months despite the arrival of an NFT winter.
Solana’s Native NFT Marketplace Magic Eden Enables Growth
Magic Eden, the largest NFT marketplace on Solana, started the “Solana Summer” by offering the viral NFT series Okay Bears.
Tapping into the first-mover advantage, Ethereum NFTs have attracted the attention of most NFT users. Although NFT marketplaces like LooksRare and X2Y2 have sought to rival OpenSea with low fees and token rewards, they have failed in the race primarily because the liquidity of the same NFT is higher on OpenSea. As such, OpenSea’s share of NFT transactions on Ethereum has remained above 50%.
However, compared with Solana NFTs, OpenSea does not have apparent advantages. This April, OpenSea announced its support for NFT transactions on Solana. Meanwhile, Okay Bears boomed and ranked №1 on OpenSea in terms of transaction volume. Despite that, the statistics suggest that the majority of Okay Bears were traded on Magic Eden.
Apart from Okay Bears, Magic Eden also accounts for over 95% of the total NFT transaction volume on Solana, which gives it enormous advantages in terms of NFT liquidity on the public chain. The only thing that Solana-powered NFTs lack, when compared with Ethereum NFTs, is the first-mover advantage. Despite that, focusing on Solana NFTs, the Solana-native NFT marketplace Magic Eden has built an absolute dominance in liquidity and might become the “OpenSea killer”.
Bule-chip NFTs on Solana
Okay Bears
Okay Bears is a group of NFT avatars based on Solana and also one of the most prominent NFT projects recently. The Okay Bears NFT collection consists of 10,000 bears with different skins and outfits. These bears resemble BAYC’s apes in terms of clothing, facial expressions, and even the idea behind them, which is why they are sometimes called “Bored Bears”.
Since Magic Eden’s offering of Okay Bears for 1.5 SOL started on April 27, the price of these bears has skyrocketed, with the floor price peaking at over 260 SOL. In less than a month, Okay Bears recorded a stunning transaction volume, with over 20,000 transactions that are worth 1.4 million SOL. Right now, the floor price of Okay Bears stands at 115 SOL, an approximately 77X growth record. During the past two weeks, the Okay Bear NFTs have become the most successful Solana-powered avatar NFT project, attracting users from other NFT communities.
DeGods
DeGods, a deflationary NFT collection powered by Solana, consists of 10,000 virtual gods, divided into DeGods and DeadGods, showcasing values with their creative outfits and unique character designs. With a total supply of 10,000 NFTs, DeGods were offered at 3 SOL starting from October 2021, and the current floor price is 403 SOL. After purchasing DeGods, holders can join the Discord community using their NFTs as the pass.
DeGods issued DUST, which is acquired by staking DeGods and DeadGods, and has its own tokenomics. At the moment, users can get 10 DUST per day by staking DeGods and 30 DUST per day by staking DeadGods. A user can also switch between DeGods and DeadGods but need to pay a certain amount of DUST. The project has plans for game development, which indicates that gaming might be its next focus.
Cets on Creck
Cets on Creck, a BAYC-like NFT project launched this March, is a collection of 6,969 NFTs. The project’s total transaction volume has exceeded 250,000 SOL, with a minting price of 2 SOL and a floor of 60 SOL. According to its official profile, Cets holders will be empowered in the future ecosystem of the project, and the official roadmap is leading it towards the metaverse category.
Conclusion
Solana NFTs, led by Okay Bears, have started to soar, and its hundredfold ROI has made them hideously popular within a short period. Such success has demonstrated that NFTs on Solana promise incredible returns. The public chain’s daily NFT transaction volume is second only to that of Ethereum. As more successful projects flourish, Solana will become a formidable rival of Ethereum. At this stage, although the NFT transaction volume has been falling together with the overall market, statistics show that Solana is catching up in the NFT category, and it might foster more blue-chip NFTs in the future.
