Solana: Can this NFT hand help SOL regain its former green spot
Solana’s original token SOL has had a difficult journey so far in 2022. The platform saw hiccups like network outages that led to massive price corrections. But it seems that NFT projects may be the missing piece of the puzzle in SOL’s growth story.
Here is AMBCrypto’s price estimate for Solana for 2022-2023
Tells the details
It is difficult to find the exact reason behind SOL’s constant price decline. But it’s clear that “centralization issues”, a decline in the network’s DApp usage and fading interest from derivatives traders have played an important role in SOL’s journey south.
Consequently, SOL has traded at a large discount not only in the spot market, but even in the derivatives sector.
Solana futures traded at a 7% discount to the current spot price. Certainly, it is concerning data since it indicated a lack of interest from leveraged buyers. Which is evident in the graph attached below.
Source: Laevitas
Meanwhile, Solanas told TVL a similar death. The network’s Total Value Locked (TVL), the amount invested in its smart contracts, broke to its lowest level since September 2021 at 30.4 million SOL. Currently it was at around the 32m SOL mark.
However, active wallets on the Solana network registered hardly any gains, rather it fell this year given the market-wide price correction.
Source: The Block
In fact, data from DappRadar showed that the number of Solana network addresses interacting with decentralized applications decreased in 12 of the top 20 DApps.
Any saving grace(s)?
There is no doubt that SOL and society had a bad year. But the NFT domain had a little twist under its belt. The Metaplex Foundation, which oversaw Solana’s Metaplex NFT protocol, launched an airdrop of the MPLX token for Solana NFT creators. Fair enough, the said project saw much-needed traction.
Since its launch, Metaplex accounted for for ~21 million NFTs minted on SOL. Furthermore, the daily active owner count, the daily number of unique wallets that transacted via buying or selling an NFT, averaged almost 85,000 unique wallets in Q3 2022.
The calculation was up 12% compared to the previous quarter.
One of Messari’s analysts shed some light about this case.
Source: Messari
Overall secondary (marketplace) sales transaction growth strengthened in Q3, up 60% QoQ thanks to the long-awaited governance and utility token, MPLX.
But that is not always the same as sustained growth, as can be seen in the tweets attached below.
3/ Gross merchandise value (GMV) represents the sum of cross-sectional sales figures @Metaplex.
In the third quarter of 2022, GMV fell 57% i $SOL terms QoQ.
GMV was primarily affected by the decrease in the average mint price of Solana-based NFTs, despite the increase in the number of NFTs minted. pic.twitter.com/ZGhxCDtYb2
— Messari (@MessariCrypto) 19 October 2022
Could the aforementioned project lead to a change of faith for the lost ‘SOL’ or would the bears continue to haunt it? Let’s wait and see.
