Solana's blockchain network, despite weathering a tumultuous bear market in recent months, is exhibiting significant growth in the realm of non-fungible tokens (NFTs). Data from Messari reveals a two-fold increase in daily NFT transactions from the start of May, with the count now averaging near 60,000 transactions per day based on a seven-day moving average.
This rise in on-chain NFT activity on Solana is a welcome sign of recovery after the network and its ecosystem were battered during the bear market. It comes amid a decline in NFT transactions on Ethereum, which fell from over 100,000 daily transactions in March to less than 20,000. Polygon, another contender, is also currently processing around 20,000 NFT transactions per day, a steep drop from its peak of 70,000 in February.
Mad Lads, a digital art collection on the Solana blockchain, topped the charts as the most trending NFT collection on Solana over the past 24 hours. It recorded more than 35,000 SOL ($525,000) in trading volume, followed closely by Claynosaurz and Foxbyte.
In an attempt to foster innovation in the NFT space and cement its presence, the Solana Foundation in May launched the NFT Showdown. This competition targeted NFT projects that could influence "real-world" industries such as gaming, entertainment, or fashion. Judges for the competition are currently evaluating submissions based on their business model, user focus, creativity, use of Solana technology, and real-world applications. The ten highest-scoring collections will advance to the finals.
Solana's Journey Through Turbulence
The rise in Solana's NFT activity comes after a period of significant challenges for the network. Solana gained popularity in 2021 for its high speed, albeit at the expense of network centralization. The stringent technical requirements to validate the network led to a dominance by data center operators.
The native SOL token experienced a roller-coaster ride in the market. It skyrocketed from $1.5 at the start of 2021 to more than $250 nine months later. However, SOL faced a crushing drop to as low as $8 in January.
The drastic fall of SOL was aggravated by the collapse of Sam Bankman-Fried’s FTX exchange and Alameda Research trading company in November 2022, resulting in a further 65% crash for SOL. Solana's DeFi ecosystem mirrored this plummet, declining from $10B in November 2021 to less than $1B a year later.
The Solana Foundation suffered heavy losses from its investments in FTX's native tokens and other SBF-backed projects. Additionally, Solana's performance was hindered by its frequent network outages. Nevertheless, a planned overhaul is on the horizon, expected to enhance the reliability of the network.
The robust growth of Solana's NFT activity in May signals a potential turning point for the beleaguered network. Despite its struggles, Solana seems to be carving a niche for itself in the NFT market, offering a viable alternative to Ethereum and other established platforms. As the blockchain space continues to evolve, it will be fascinating to observe how Solana manages to further leverage this momentum.