Solana, the high-speed, low-cost blockchain that has been attracting a lot of attention in the NFT space, has seen a sharp decline in its NFT sales volume in the past month. Solana’s NFT market saw a significant decline in May, as the value of secondary sales fell by almost half from US$85.7 million in April to US$44.9 million in May. The SOL NFT Composite, which tracks the NFT activity on the Solana blockchain, also dropped by 12.13% during the same period.
What caused this slump in Solana’s NFT market? One possible factor is the competition from other blockchains, especially Bitcoin. Bitcoin, the oldest and most dominant cryptocurrency, has been on a bullish run since October. This has attracted more investors and traders to Bitcoin, as well as increased its media coverage and public awareness.
As Bitcoin’s NFT sales volume soared by 474% in May, reaching over US$189 million, Solana’s NFT market experienced a decline. Ordinals, a type of NFT on the Bitcoin network, contributed to this surge. Solana, which often ranks as the second most popular NFT chain, fell behind Bitcoin in terms of monthly sales.
The monthly sales of NFTs on the Bitcoin network increased by more than 500% in May, reaching US$195.7 million. This was a significant jump from the US$32 million recorded in April. According to Crypto Slam, the Bitcoin blockchain also achieved a milestone of 10 million Ordinals inscriptions on Monday.
Solana Can Still Reclaim its Place
However, Solana NFTs also have some benefits over Bitcoin NFTs, such as lower fees, faster transactions, and more innovation. Solana’s blockchain can process over 50,000 transactions per second, with an average fee of less than $0.01. Bitcoin’s blockchain can only handle about 5 transactions per second, with an average fee of over $10. Furthermore, Solana has a vibrant and diverse ecosystem of NFT projects, ranging from art and gaming to music and metaverse.
Therefore, it is too early to write off Solana’s NFT market as a fad or a failure. Solana still has a lot of potential and room for growth in the NFT space, as long as it can overcome its challenges and leverage its strengths. Solana may not be able to compete with Bitcoin on its own terms, but it can offer a different and complementary value proposition to NFT collectors and creators.