Solana recorded a 60% increase in secondary NFT sales transactions in Q3 2022
The Solana Network (SOL) recorded a significant increase in secondary non-fungible tokens (NFT) sales transactions in the third quarter of 2022, according to a recent banklessTimes.com data presentation. The site reported that the volume of these transactions grew by 60% QoQ. The growth was also mainly attributed to the success of Magic Eden V2.
Magic Eden V2 is a closed source version of SOL’s Metaplex protocol trustless Auction House program. The marketplace accounted for over 95% of the blockchain’s secondary transactions in the third quarter due to low transaction fees and free listing features. It also has a user-friendly interface, a wide variety of NFTs and a community focus.
BanklessTimes.com CEO Jonathan Merry says,
Merry concludes that this growth in SOL’s secondary NFT sales market is good news for users and developers. That’s because it points to a healthy and growing network. This development is crucial as it provides additional liquidity and use cases for the Solana network.
Against depositless transactions
While Magic Eden currently dominates SOL’s secondary NFT sales space, smaller players provide the alternative. These run on the original auction house smart contract and have taken a modest market share of around 4%. Despite their low sales volume, they can play an important role in expanding the reach of the Solana network.
Auction House is an open-source codebase that enables third-party marketplaces to facilitate transactions between buyers and sellers with ease. This could lead to a future where more escrow-less transactions occur, reducing the need for rent-seeking middlemen.
The idea behind Auction House is to create a trustless network where buyers and sellers can interact without the need for an intermediary. This is made possible by using smart contracts, which provide secure and transparent transactions.
The auction house has the potential to revolutionize the trading of NFTs on the SOL network. Creating a trustless network where buyers and sellers can interact without the need for a third party will help reduce costs and speed up the exchange process.
What does this mean for Solana?
The success of Magic Eden highlights the potential for innovation and differentiation within the secondary market. It also emphasizes the importance of creating a pleasant user experience and offering value-added services that differentiate your product from others.
Looking ahead, we expect growth in secondary NFT sales transactions to continue into Q4 and beyond. This growth will be driven by continued interest from developers and users to leverage NFTs for various use cases, from gaming to collectibles to social media.
And while Magic Eden V2 has been incredibly successful in increasing transaction volume on the Solana network, its architecture raises some concerns. Most notably, using a closed source program for such a critical component of the network may cause some to worry about potential centralization risks.
However, given that Magic Eden is an open source project and the developers have made the code publicly available, these concerns may be overblown.
