Solana bounces back with NFTs as co-founder says FTX meltdown is ‘in the rearview mirror’
After four months of decline following FTX’s collapse in November, transactions on Solana have rebounded, thanks in part to a new buzz around NFTs drowning out murmurs about the blockchain’s former ties to Sam Bankman-Fried.
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FTX sister company Alameda Research was heavily invested in SOL, Solana’s original cryptocurrency, and the collapse of FTX and Alameda halved the token’s value. But the Solana ecosystem is soldiering on, and according to co-founder Raj Gokal, it’s not looking back.
“It feels like it’s pretty far in the rearview mirror, to be honest,” he shared Fortune. “Six months is a lifetime in crypto.”
The blockchain received a boost from the new xNFT project Mad Lads, which surpassed all other NFT projects in sales volume last week. As of Tuesday, the profile picture NFT Collection was still in third place in sales, just below Yuga Labs’ Bored Ape Yacht Club and Azuki, according to CryptoSlam.
Still, unlike other profile picture projects, Gokal said Coral — the Web3 company behind Mad Lads — was able to get a lot of support from its community by taking the time to build out a unique product before launching the NFT collection. Coral’s product, an NFT wallet called Backpack, has broken barriers, Gokal added, by enabling the capabilities of special non-fungible tokens – xNFTs – that act as their own on-chain applications.
It’s this kind of creative thinking, and leveraging Solana’s speed and affordability, that has made blockchain popular for NFTs lately, Gokal said. Mad Lads’ success has brought much-needed excitement to the ecosystem after two of Solana’s most prominent projects, yoots and DeGods, migrated to other blockchains. The launch of Mad Lads also proved that the blockchain has improved since the last fallout in February, and is getting better at catering to a critical mass of users, Gokal added.
“The Solana ecosystem is booming and it’s at a point where the rest of the industry is kind of fixated and has to pay attention,” he said.
Successful transactions on the blockchain fell by about 25% from October to November, driven in part by FTX’s demise, and this downward trend continued for several months. Things began to turn around in March; April was a second consecutive month of growth, with just under 800 million transactions recorded, according to blockchain analytics firm Flipside Crypto.
Part of what’s attracting people to the network, Gokal said, is a feature introduced in April that can compress NFTs, allowing users to make more at a lower cost. With state compression, minting 1 million NFTs would cost around $110, rather than the more than $250,000 required in the previous iteration of Solana, according to a company blog post.
Gokal pointed to one project, DRiP, which uses state compression for free weekly NFT airdrops to its community of around 200,000. Other companies, such as Dialect and Crossmint, use the technology for blockchain-based stickers in messaging and customer loyalty uses, respectively.
“It’s only just beginning to trickle down into product experiences that actually take advantage of that performance,” Gokal said.
This story was originally featured on Fortune.com
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