Ethereum is the 800-pound gorilla in the room when it comes to NFTs (non-fungible tokens), as both the first blockchain that enabled NFTs and in terms of the size and value of the market, with collections like Bored Ape Yacht Club attracting in the million-dollar range and drawing in celebrities ranging from Justin Bieber to Jay-Z. But investors who want to cast their eyes further afield will find that NFT ecosystems are also growing on other blockchains, particularly Solana (CRYPTO: SOL). While the Solana NFT market is still nascent and a fraction of the size of the Ethereum NFT market, it is growing quickly.
As a quick reminder before going forward, NFTs are essentially tokens on a blockchain like Ethereum or Solana that represent ownership of a unique asset. These assets can be anything from a piece of artwork to a character in a play-to-earn (P2E) game or even a plot of digital real estate in the metaverse.
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How does it work?
Buying Solana NFTs is a simple process. You’ll need to have a Solana wallet, such as Phantom, which is the most prominent and can easily be downloaded as a browser extension. You can then go to one of the main exchanges for Solana NFTs, like Magic Eden or Solanart, and browse the collections there. Magic Eden currently dominates this space, with $144 million of volume over the past 30 days as compared to $9.37 million for Solanart over the same timeframe. When you see one that is of interest to you, you just connect your wallet, make sure that you have the necessary amount of SOL in that wallet, and then you can purchase. You will have to approve the token coming into your wallet, and then The NFT will show up in your Phantom wallet shortly thereafter in the “Collections” section.
Check the stats
Solana has established itself as the second-most prominent blockchain for NFTs and is gaining momentum.
In February, Solana saw $149 million in total volume with an average price of $470 per transaction. There were 316,000 transactions with 54,434 unique sellers and 81,793 unique buyers. While the total sales volume fell from nearly $200 million in January , this is also attributable to the price of Solana falling about 50% from early January to February, so sales were all at a much-lower dollar-denominated price.
The important trend to watch is that unique buyers have exploded since last summer, when NFTs first came online on Solana, from 14,579 in August to over 80,000 in February, for an increase of over 500% in just six months. Total transactions grew by a similar percentage, from 63,873 in August to 316,800 for the month at the end of February. These trends are important because they indicate that more individuals are coming into the Solana NFT ecosystem instead of just a few whales buying and selling among themselves, indicating that Solana NFTs are gaining more widespread popularity among individual investors. Furthermore, the growing transaction numbers indicate that once involved, these investors are transacting more frequently, meaning that there is a good level of activity and volume for Solana NFTs.
Again, while Solana is not yet competing with Ethereum in the playground of multi-million dollar sales, there have now been three NFT sales for over $1 million on Solana. The record-setting NFT sale on Solana is for a Solana Monkey Business NFT for just over $2 million last October. The other million-dollar-plus sales were another Solana Monkey Business NFT and an Ape from the Degenerate Ape Academy. Other popular projects include the Catalina Whale Mixer, Boryoku Dragonz, Baby Ape Social Club, and Portals, a metaverse real estate project on Solana.
Can Solana NFTs keep growing?
As with any form of artwork or collectibles, there are plenty of collections that will flop but also some that will appreciate over time.
Solana NFTs have a long way to go before they reach the same mainstream profile as Ethereum NFTs. But they have achieved a lot of traction in just a few months of existence. A key factor that could propel Solana NFTs even further is that the fees for processing transactions on Solana are much lower than the “gas fees” on Ethereum.
These are clearly speculative investments and only for risk-tolerant investors who are comfortable putting a small amount of money into them, but I think Solana NFTs will continue to grow over time with the Solana blockchain as more developers build on it and more users interact with it. The increasing number of unique users and volumes over the last few months is a key trend that bodes well for Solana NFTs.
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