The Solana blockchain is home to one of the fastest growing ecosystems alongside Ethereum. Despite the bear market, Solana's NFT landscape in particular is seeing new highs in terms of actively participating addresses and trading volumes.
The Solana network uses a unique combination of Proof-of-History and so-called delegated Proof-of-Stake algorithms that promises throughput of up to 50,000 transactions per second (TPS). In essence, the blockchain enables extremely fast and cheap transactions at the sacrifice of decentralization; a tradeoff known as the blockchain trilemma. As the data shows, this bothers a large portion of crypto users only slightly. The native NFT ecosystem, meanwhile, boasts a similar number of active addresses as Ethereum, while targeting a different user base.
Peak levels in a bear market
The enthusiasm for non-fungible tokens (NFT) has taken the cryptocurrency industry by storm in 2021, launching an incredible number of NFT projects. Just as after the "ICO mania" during 2017/18, the vast majority of NFT projects had already retreated into their own bear market during the year. 2021 ended with low liquidity, low volumes and floor prices approaching zero for many collections. Solana's ecosystem, while not completely immune to the market cycle, has shown impressive resilience.
The number of new NFT projects reached an all-time high in the first week of September and the daily trading volume climbed to 373,000 SOL (about 12.5 million USD). In the past, Solana made up only a small part of the market, but today the network is seemingly accepted as the leading platform for "cheap" NFT trading. As the chart above shows, the Magic Eden marketplace dominates with almost absolute dominance. The success of "SolanArt" and "CandyMachine" fizzled out after only a few months.
Own "Blue Chip" projects
Blue chip status is a contested term in both the crypto and NFT worlds. In the taditional financial world, investors use it to describe investments that are considered safe, long-term bets and generate steady returns on invested capital. Typically, blue chip companies have been around for many years to decades, are well capitalized and have a long track record; even in difficult times for the markets. Since NFTs have not gone through a full market cycle, the classification of blue chips also leaves a lot of room for interpretation. For example, the largest collections by market capitalization and trading volume are usually referred to as "blue chip," even though the track record may be far shorter than traditional investments.
Similar to the dominance of Yuga Labs' creations on Ethereum (Bored Apes, Otherside, etc.), one developer team stands out above all others on Solana. DeGods and y00ts, both creations of the same team, take the first two places by market cap without much competition. This is followed by the sports game "StepN" and two of the first NFT collections on the blockchain: Solana Monkey Business and Degenerate Ape Academy.
