Solana’s NFT Ecosystem Faces Challenges but Introduces Affordable Minting with State Compression Technology
Solana’s NFT ecosystem has experienced setbacks with the departure of two popular NFT collections, y00ts and DeGods, in 2023. While y00ts is in the process of migrating to the Polygon (MATIC) chain, DeGods is also moving to Ethereum (ETH) at press time. According to CryptoSlam, Solana’s total NFT sales volume grew by 31% in the last 30 days, but the NFT trade count declined by over 8%. The impact of the absence of these collections on Solana, which is the second-largest NFT market in the crypto space, remains to be seen.
Amidst these challenges, Solana has introduced a game-changing technology that could attract the NFT community in the future. The Solana Foundation plans to make NFT storage on the blockchain more affordable using its ‘state compression technology’. Compressed NFTs are similar to traditional NFTs, but the cost of minting is significantly reduced, as highlighted in a blog post by Solana. For example, minting a million uncompressed NFTs currently costs over $250,000 on the chain, but the same will cost only $113 using compressed NFTs, which is a fraction of the original cost. Solana notes that NFT compressions mark the first use of state compression technology, which is already being utilized by applications in the Solana ecosystem, such as Dialect and Crossmint.
Despite the challenges faced by Solana’s NFT ecosystem, the network has seen an increase in daily active users, up by 14% in the last 10 days according to Token Terminal. However, trading activity has not shown a significant jump, likely due to subdued transaction fees. The price of SOL, Solana’s native token, has increased slightly over the previous week, settling at $20.45 at press time. The dip in trading volume, as shown in a graph by Santiment, may be a contributing factor to the narrow price increase. Nevertheless, a positive aspect is the rise in development activity, which could instill confidence among SOL investors.
Key Highlights:
- Solana’s NFT ecosystem impacted by the exit of popular collections y00ts and DeGods.
- Solana introduces state compression technology to make NFT minting more affordable.
- Compressed NFTs cost a fraction of the original minting cost.
- Solana’s network sees an increase in daily active users but trading activity remains subdued.
- Price of SOL increases narrowly, with trading volume showing a dip.
- Rise in development activity could boost investor confidence in SOL.
