The hype around NFTs (non-fungible tokens) is long gone. By now, most of the industry is well aware of the fall in prices for major NFT projects. NFT trading volume on Solana, one of the most popular networks for NFT minting, fell by half for the month of October. According to Dappradar, NFT sales witnessed new monthly lows in October.
According to Dappradar, NFT trading volume on Solana fell from $134 million in September to $67 million in October. The higher September volume can be attributed to the highly anticipated launch of the yoots NFT mint passes. Nonetheless, Solana was not the only network to record falling NFT volumes.
Ethereum (ETH), saw its volume drop from $$687 million in September, to $518 million in October. However, there could be a lag in the Ethereum numbers as Dappradar is yet to track trading data from Blur, a new Paradigm-backed marketplace launched in September.
Why are Solana NFT numbers falling?
Frankly, it is not just Solana, but the general NFT market that has been declining since the beginning of this year. Nonetheless, there are several reasons for Solana’s dwindling numbers.
Traders are no longer required to pay creator royalties on Magic Eden and other marketplaces. The SOL community’s excitement was impacted by this move. The development of NFTs on the new competing platform Aptos, also seemed to drain some liquidity from the Solana market.
Furthermore, DappRadar’s data remove wash trades. This happens when someone sells an NFT between their own controlled wallets at significantly higher prices in an effort to manipulate a token rewards model or boost the awareness of an NFT project. After abolishing its own marketplace fee and making creator royalties optional, Magic Eden saw a surge in wash trading.
Pedro Herrera, a senior blockchain analyst at DappRadar, claim that Solana’s October trading volume data points to a new “consolidation phase” for the platform’s NFT market.