NFT Volumes Surge on Solana

by James · September 22, 2022

Transactions passed 1 million for the first time this month

NFT transactions on the Solana network are at an all-time high, surpassing 1 million in the week ending September 12th for the first time ever and 900,000 in the week ending September 19th.

A blockchain created to address Ethereum’s high transaction costs and slow speeds, Solana has had a moment.

Over the past two weeks, its native token, SOL, has fallen less than 2% despite widespread selling in the markets. Ether has fallen more than 20%.

ETH Price + SOL PriceSource: The Defiant Terminal

Other measures of NFT activity have recently reached or are near record highs.

Turn up the volume

NFT sales volume hit a record high in the week ending September 12, approaching 1.5 million SOL, or nearly $50 million, according to Nansen. The number of Solana users interacting with NFTs that week was the highest since late June.

Ethereum’s high transaction fees are a barrier to entry for the average user, but they also limit wash trading, a practice in which someone transfers an asset between multiple wallets he or she owns to create the impression that the asset is in demand and traded frequently, thereby increasing its value. Some took to social media to suggest Solana’s recent NFT surge was fueled by such trading.

Organic growth

But Javier Gonzalez, a software engineer on Nansen’s NFT team, said data he’s seen suggests the growth is organic.

The action has been broad-based, with both large and small NFT collections seeing a bump. And it’s not just the latest ones, as old projects are also gaining renewed interest.

“Sometimes you can see that it’s this project that’s taking a lot of volume, or maybe there’s people trading that project, but that’s not the case here,” he said. The current wave “looks like it’s either very well orchestrated, which is unlikely, or there’s actually more volume everywhere in Solana.”

The increase has been driven by repeat buyers rather than brand new buyers, Gonzalez said, and was likely kicked off by the debut of the ABC and y00ts collections on Aug. 22 and Sept. 6, respectively.

picture, 1 — The ABC NFT collection at Solana was “made to remind you how fun things were when we were kids, before we grew up.”

Ethereum remains the most popular blockchain for NFTs.

Although NFT trading volume on Ethereum has cratered since reaching an all-time high in May, it topped 330,000 ETH — nearly half a billion dollars at Thursday’s prices — in the last 30 days, according to Nansen. Despite the uptick in September, Solana recorded a more modest $126 million in NFT trading volume over the past 30 days.

Nevertheless, it has established itself as a leading blockchain for NFT artists and collections.

“It seems Solana has some iconic collections,” Gonzalez said. “Solana should be able to claim: ‘We are the second chain for NFTs’.”