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CoinEx Research: The NFT Landscape in the Solana Ecosystem

2021-11-01 09:58:36

2021: The start of the NFT era

Ever since the summer of 2021, the market popularity for NFT (Non-Fungible Token) has soared, and the NFT segment has soon expanded its influence beyond the crypto space. Celebrities from all sectors have also become NFT players. For example, the NBA player Stephen Curry a “Bored Ape” NFT for $180,000 for his Twitter profile. The Japanese artist Takashi Murakami released an NFT collection series that combines sunflowers with CryptoPunks elements. Chinese celebrities Shawn Yue and Jinglei Xu have also changed their SNS avatars into NFT images.

Such celebrity effects have also brought increased coverage and user base to NFT. As the number of transactions and the trading volume surge, NFT has attracted mainstream focus. According to data from Coingecko, as of October 20, 2021, the total market cap of the NFT sector has reached $33.8 billion, which is 1.3% of the market cap of all cryptocurrencies around the world. Right now, NFT projects are concentrated in three fields: digital collectibles, game assets, and virtual worlds. NFT has become one of the most trending crypto segments in 2021 partly because it attracted a group of strangers to the crypto space and brought non-crypto users into the world of NFT digital images and blockchain games.

The leadership of Ethereum to be overtaken: NFT projects moving to new public chains 

As the first public chain that faces applications, the Ethereum blockchain pooled the majority of NFT projects and assets, including the earliest NFT CryptoKitties as well as the most expensive NFT CryptoPunk. Moreover, the network also boasts highly active transactions. However, on Ethereum, each NFT trade charges two-digit service fees (US dollar). When the network is congested, a transaction may even consume hundreds of dollars. In the last auction of Time magazine NFTs, buyers had to pay almost four times the price of the original cost to obtain the NFT. As of October 16, over 550,000 ETH worth $2.1 billion-plus has been burned in total since the London Upgrade, according to ultrasound.money. Opensea, in particular, burned the most, which was 80,000 ETH, about 14.5% of the total number. As such, we can tell that NFT transactions on Ethereum are very expensive.

Apart from this, the Ethereum network also suffers from other limits, such as the series of problems caused by low processing capacity and congested network traffic. For instance, at the end of 2017, the Ethereum blockchain went through large-scale network congestion, which led to the malfunctioning and outage of CryptoKitties, one of the earliest NFT projects. Due to the high Gas fees and small network capacity, a growing number of NFT projects have chosen to get deployed on other public chains with scalability solutions, such as high-performance chains like Solana and BSC, Ethereum sidechains like Polygon, and Layer 2. Of these platforms, Solana stood out with its extraordinary NFT performance.

Solana, a “dark horse” among new public chains

Among the new public chains, Solana is a rising star whose market cap has soared to the 7th spot on the list of crypto market cap despite the market volatilities. Moreover, the Solana public chain is also known for its high performance, high processing capacity (60,000TPS), and almost negligible transaction fees, which allowed the NFT projects in its ecosystem to thrive.

At the moment, according to its official website, the Solana ecosystem now includes 120 NFT projects. As of October 2021, the market cap and 7-day trading volume of these projects have reached $850 million and $65 million, respectively (Figure 1). In particular, Solana Monkey Business is the NFT project with the highest market cap (nearly $200 million). Meanwhile, it is also the first project in Solana’s NFT sector that sold an NFT for over $2 million. 

Figure 1

According to content released by Twitter account @Solanians_, the NFT landscape in the Solana ecosystem continues to expand, covering fields such as infrastructure, social NFTs, music, games, NFT platforms, and NFT collectibles  (Figure 2).

Figure 2

Popular Solana-based NFT projects

Next, we will briefly introduce the popular Solana-based NFT projects in communities and the market.

1. NFT collectibles

1) Solana Monkey Business

Official website: https://solanamonkey.business/

Solana Monkey Business (SMB) is a set of 5,000 randomly-generated images of cartoonish, pixelated monkeys. After its launch, SMB was welcomed by celebrities. In September 2021, the American comedian and TV show host Steve Harvey changed his Twitter profile photo to SMB NFT.

According to HowRare.Is, Solana Monkey #1355 is the rarest NFT in the SMB collection. The NFT depicts a monkey with a skeleton body (only 2.42% of monkeys in the collection have this feature). Additionally, the NFT dons an orange jacket, a feature specific to only 1.05% of the 5,000 SolMonkeys. On top of this, Solana Monkey #1355 features a bejeweled crown, a trait available in only 0.02% of the NFTs in the entire collection.

SolanaMonkey #1355 was finally sold for $2.1 million, a record high for NFTs within the Solana ecosystem. Right now, the floor price of SMB stands at 244 SOL. There are two official marketplaces for SMB: the built-in marketplace on the official website, and the Solana-based NFT marketplace Solsea.

2) Degenerate Ape

Official website: https://www.degenape.academy/

Degenerate Ape is a “Degenerate Ape Academy” NFT series consisting of 10,000 apes. Once the NFTs were minted, the entire collection of 10,000 apes was sold out within 8 minutes, raising about $2.5 million.

At the moment, we can trade Degenerate Ape on the NFT marketplace Solanart. When it comes to the NFT’s prices, the floor price is 67 SOL, the issue price was 6 SOL, and its lowest price when the NFT series was just released was 14 SOL. The initial holders of Degenerate Ape made a fortune from compound interests. Not only has the NFT price soared, but the price of SOL also surged. In September 2021, Moonrock Capital, a blockchain information company, purchased Degen Ape#7225 for about $110,000. #7255 is the 13th rarest NFT in the series, according to the HowRare.is ranking.

3) SolPunks

Official website: https://solpunks.com/ 

Solpunk is more of a copycat project of Ethereum’s Cryptopunks. It minted 10,000 Solpunk NFTs at the issue price of 3 SOL. Right now, all 10,000 Solpunk NFTs have been minted and can be traded in the secondary market Solanart, with a price floor of 6.6 SOL. Although Solpunk is a copycat project, NFT players bid high prices for its NFTs. According to the official Twitter, on August 29, 2021, #7523 was sold for $250,000.

2. NFT platforms

In the early stage, the secondary market trading of NFT projects on Solana relied more on the built-in Marketplace or OTC because well-established NFT marketplaces like Opensea did not support the trading of Solana-based NFTs. However, as NFT projects in the Solana ecosystem start to boom, the associated NFT marketplaces have emerged.

1) Solanart

Official website: https://solanart.io/

Solanart is a Solana-based, Opensea-like marketplace where NFTs are displayed and traded. In its basic model, each project determines an amount of initial issuance, and users apply for synthesis (NFT mint). The minted NFTs can be freely listed and traded on Solanart. Additionally, the marketplace also features a preview of new collections.

2) Solsea

Official website: https://solsea.io/

Developed by All-Art Protocol, Solsea is a Solana-based NFT marketplace launched on September 23, 2021. On Solsea, users can purchase NFT collectibles with cryptocurrencies like SOL, USDC, and SRM or through FTX-Pay.

3) Burnt Finance

Official website: https://www.burnt.com/

Burnt Finance is a Solana-based decentralized auction protocol that allows users to mint, trade, and bid various assets. The auctionable assets include synthetics, NFTs, and digital assets. On Burnt Finance, users can host different types of auctions, such as English auction, Dutch auction, and bonding curve auction. Through Burnt Finance, artists can not only sell their works but also use the platform to raise funds for new projects.

Burnt Finance was initiated by Burnt Banksy, which burned down the work of famous street artist Banksy and mint it into NFT. Incubated by Injective Protocol, it raised $3 million this May.

4) FTX NFTs (to be launched)

FTX.US plans to launch a Solana-based NFT marketplace called FTX NFTs, which will allow users to trade, mint, auction, and authenticate Solana NFTs. Moreover, according to its plans, the marketplace will soon support Ethereum NFTs. When it comes to fees, FTX NFTs will charge 2% sales fees, while Solanart and Solsea both charge 3%. At the moment, FTX NFTs are only open to users with an FTX account. In the future, it will support NFT purchases through credit cards and bank transfers.

3. Infrastructure

1) Metaplex

Official website: https://metaplex.com/

Metaplex is the Solana-powered NFT marketplace and on-chain protocol for minting and auctioning NFTs. The protocol was founded by Everstake, a social staking platform for mining pools. Additionally, it also receives strategic supports from Solana Labs and FTX. Metaplex will also create its own foundation to promote the further expansion of projects and its ecosystem.

With the functions of fast mint and storefront, on Metaplex, creators, artists, and brands can freely mint NFTs and build their own storefront. Meanwhile, the personalized and efficient usage also helps users launch NFTs that are oriented to communities. Audius, a blockchain music sharing platform, will also launch an NFT storefront on Metaplex.

2) All-art

Official website: https://all.art/

All-art won the second place in the NFT track of the Solana Season hackathon and is the first decentralized NFT exchange pool running on Solana. It aims to bring a paradigm shift in the art market. By combining NFT with DeFi, and through the financialization of NFTs, All-art turns NFT into a type of liquid asset and addresses the issue of poor liquidity facing the current NFT market.

The All-art protocol comes with three keywords: cAMM, NFT-PRO liquidity pool, and its token AART. At its core, All-art tokenizes creators’ NFTs. It divides a complete NFT through NFT-PRO, and each divided NFT will form a LORT. The All-art protocol uses LORT and AART tokens to create cAMM pools for NFT-PRO, thereby providing liquidity for each NFT-PRO pool. 

4. SocialFi

Following DeFi Summer, the crypto sector has witnessed many more trending segments, such as NFT, GameFi, Metaverse, etc. In particular, many crypto users believe that SocialFi will be a promising field in the future. Plus, social interactions are also a strong demand of Web 3.0. Many outstanding SocialFi projects have been built on the Solana blockchain.

1) Only1

Official website: https://only1.io/

Only1 is the first NFT social platform based on the Solana blockchain. On Only1, creators in different fields can build their own NFTs, and their fans can purchase, collect, and invest in these NFTs through LIKE tokens. Meanwhile, by participating in social events on Only1, users and creators can closely interact with each other, thus linking social interactions with revenue.

To inject vitality into the social ecosystem of the entire platform, Only1 has introduced two unique mechanisms (Genesis-NFT and Content-NFT) to encourage users to take part in social events and interact with the creator ecosystem. Unlike other projects that focus on “social tokens”, Only1 has placed a greater emphasis on “socializing”. Through social interactions, Only1 brings together creators, owners, and communities and creates economic ties that connect the three parties.

Only 1 first proposed the concept of Social-To-Earn(C2E) and Initial NFT Offering (INO). The latter represents a new way to issue NFTs. It allows us to raise funds while issuing NFTs, which may become a new trend for NFT issuance.

2) Blockasset

Official website: https://blockasset.co/#/

As an athlete NFT platform and marketplace based on the Solana blockchain, Blockasset aims to bridge the gap between athletes and their fans with athlete-verified exclusive NFTs and fan experiences. Blockasset now features three core components: an NFT marketplace, an NFT ticketing facility, and an NFT gaming suite. The platform intends to make the process of purchasing, storing, and selling NFTs as easy as possible. Meanwhile, Blockasset is also building a governance portal, which will allow NFT owners to vote on key decisions made by athletes, and athlete management will go hand-in-hand with the standard meet & greets, signature shirts, and other real-world perks. 

5. GameFi 

1) Star Atlas

Official website: https://staratlas.com/

As the ace project in the Solana GameFi field, Star Atlas is a space-themed MMORPG (massively multiplayer network role-playing game) with a science fiction background. It is built with the Unreal 5 engine and has movie-level visual effects. The Star Atlas game will be launched in Q2 of 2022. In August, Star Atlas launched the decentralized exchange Marketplace, which is fully integrated with Serum on the Solana blockchain. This integration enables the global community to seamlessly exchange meta-posters, spaceships, and any other assets. Moreover, meta-posters and others owners of in-game assets can directly buy and sell NFTs on the Marketplace in Star Atlas.

2) Aurory

Official website: https://app.aurory.io/

This August, Aurory released NFT mint (10,000 NFTs) at the issue price of 5 SOL each. These NFTs can be used as skins in the subsequent game, which features both the single player mode and the multiplayer mode. When playing in the single player mode, players can follow NPCs to advance the plot development. Gamers get the corresponding NFTs for each creature they defeated. Such NFT cards can help them acquire additional items in the multiplayer mode. In addition, players will get certain token rewards for each mission they clear.

In the single player mode, gamers can receive NFTs and token rewards by completing the missions. Such NFTs can be the battling monster in multiplayer battles where players on both sides pay tokens to fight. Once a player successfully defeats an opponent, he/she can get an improved ranking and additional rewards.

Summary

In 2021, the Solana ecosystem has recorded impressive growth, and its NFT landscape has also been expanded. The public chain has witnessed more native projects, and even projects built on other platforms are migrating to Solana. As Solana’s NFT sector further expands, on August 9, 2021, the Solana NFT Alliance started by Burnt Finance was officially established, with initial members that include Burnt Finance, Phantom, Bonfida, Austin Virtis, Metaplex, and Solarians.

The Solana NFT Alliance was founded to help Solana create a common NFT standard. A universal contract standard will provide significant control power for creators and collectors, help the Solana ecosystem grow, and bring more projects and users into it, setting the stage for the high-speed growth of Solana NFTs.

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