Solana [SOL] ranks second by NFT volume, but this might be transitory

Solana’s NFT market dominance was challenged by declining transactions and migrations.
The ecosystem also saw a decline in users’ interest; however, the SOL token did not suffer.

Solana was performing well in the NFT market over the last 30 days. According to data provided by Delphi Digital, Solana outperformed most cryptocurrencies in terms of NFT volume and managed to secure the second position.

However, despite this impressive performance, a decline in transaction count and major NFT collections’ migration to other chains, could pose a significant threat to Solana’s dominance in the NFT market.

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Top chains by NFT volume (30 days)

@ethereum
@solana
@0xPolygon
@Immutable
@Cardano
@flow_blockchain
@BNBCHAIN pic.twitter.com/trNHUxk1fB

— Delphi Digital (@Delphi_Digital) January 21, 2023

Eat the blue chip

One of the key factors contributing to Solana’s success in the NFT market has been the growth of Blue chip NFTs in its ecosystem.

Well, their growth has been significant, indeed, especially given the fact that many investors have been flocking to the Solana marketplace to purchase these assets.

However, even though these Blue-chip index NFTs were growing, a majority of the Blue chip index’s volume was driven by NFT collections such as DeGods and y00ts.

Unfortunately, these collections are now planning to migrate to Polygon. This could be a cause of concern for the Solana NFT ecosystem and could signal a decline in users’ interest.

Source: NFTGO

Another indicator behind the declining interest in Solana’s NFT ecosystem was the decreasing number of traders. According to data provided by NFTGO, the number of traders declined from 5,235 to 2,405 in the last few weeks.

Now, this fall had an effect on the number of transactions being made on the Solana network, as per Dune Analytics.

Source: Dune Analytics

Furthermore, the decreasing activity on Solana‘s dApps indicated a declining interest in the ecosystem as well. According to Dapp Radar, popular dApps such as Magic Eden, Raydium, and Saber have all witnessed a decline in unique active wallets.

All of these dApps observed more than a 20% reduction in the number of unique active wallets on their platform in the past week. Magic Eden, one of the largest NFT marketplaces on Solana, observed a decline of 12.77% in terms of volume. At press time, the overall volume on the dApp was around $21.37 million.

Source: Dapp Radar

Looking at the token

Meanwhile, the Solana token observed a surge in terms of volume in the past few days. Although Solana’s volume continued to increase, its development activity declined, suggesting that the number of contributions being made on its GitHub had fallen.

Read Solana’s Price Prediction 2023-2024