Is Solana on the brink of doom? This final nail in SOL’s coffin could mean damage

by James · December 26, 2022

Solana loses its large NFT collections to Polygon and Ethereum
Solana’s current state in terms of price and revenue remains dismal

Despite the FUD that surrounded Solana [SOL] in the last year, interest in the NFTs has been strong. However, this interest in Solana NFTs may start to wane as major NFT pools, DeGodsNFT and y00tsNFTs plan to migrate to other blockchains.

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Separate layers, but how?

DeGods made one announcement December 26 that the NFT collection will bridge to Ethereum in Q1 2023. However, y00ts NFT collection, which is part of the same cohort, will be moves to polygon. The reason for the transition to these different blockchains has not been officially disclosed.

However, it can be speculated that the transition to different cryptocurrencies will help to diversify the projects. Furthermore, it will help to protect these projects from single points of failure in the form of floor price.

Since these projects were the largest NFT collections on the Solana network, it could spell trouble for Solana’s NFT growth. From the data collected by Dune Analytics, after a peak in late November, it was observed that the number of Solana NFT transactions had decreased.

After DeGods and y00ts NFT collections migrate, the number of transactions may end up dropping further.

Source: Dune Analytics

However, other blockchains such as Polygon will be able to profit from this migration and outcompete Solana in this sector. Polygon was already observed making progress in this sector with several collaborations with Reddit and Instagram.

If Polygon manages to capitalize on y00t’s NFT hype as well, Polygon could become a contender for the top spot when it comes to NFTs. While this migration development may sound like good news for Polygon, Solana and SOL holders may be adversely affected by this development in the long term.

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Going ‘SOL’o

Since 14 December, SOL’s prices have fallen by 23.14%. At the time of writing, SOL traded between the levels of $11.78 and $11.21. It was 33.89, indicating that the momentum was with sellers.

Chaikin Money Flow (CMF) stood at 0.08 and was also observed to decrease during this period.

Source: TradingView

Along with SOL holders, the Solana network also felt the consequences of the NFT movement.

According to the token terminal, the fees collected by Solana had already decreased. If interest in Solana NFTs decreased, the amount of revenue collected by Solana would also decrease.