The incoming wave of Solana NFTs
To understand why Solana NFTs are rising right now, we have to understand the problem that it is trying to solve. A majority of NFTs sold today are either minted on Ethereum or using an Ethereum sidechain. Ethereum is borderline broken at the moment due to its terrible gas fees and slow transactions. The fact that NFTs have done so well on Ethereum so far should make us bullish that people will try to get NFTs at any cost, but we are now running up against the limits of what people will accept, even if you’re only buying fractions of high priced NFTs like CryptoPunks, bored ape yacht club, 0n1 force or cool cats.
The next wave of NFT buyers will be significantly different from the current audience – they’ll be less tech-savvy and will have less disposable income. They’ll be more sensitive to gas prices and not be playing with ETH that they bought at 1/100th of its current price (like many current NFT buyers).
At the same time, we’re reaching an oversupply of new collections on Ethereum. One of the best ways to stand out from the crowd when you’re selling a product is to lower prices, but we’re near the floor of how cheap NFTs on Ethereum can be sold at because high gas prices make it pointless to buy/sell eth NFTs below a certain price point.
Solana is a layer one protocol similar to Ethereum and Bitcoin but it has been built to scale much more efficiently than those other two blockchains. Solana can process 65,000 transactions per second compared to only seven per second for Bitcoin and 30 per second for Ethereum. The transaction fees are less than a penny for Solana compared to 27 bucks on bitcoin and 13 on Ethereum, and the transaction speed is also incredibly fast compared to the other two.
Solana Bull Case
- NFTs on ETH are too expensive due to gas fees.
- NFTs could launch on Solano to stand out because of the intense competition they are facing on Ethereum.
- Most collectibles are still static pieces with fixed rarities because gas limits the potential models that you can potentially do with NFTs.
Moving to Solana is an excellent way to make your collection stand out because:
- The end consumer pays less even without you lowering your price because you remove gas.
- You can lower the price even further and maintain the same revenue if you increase the collection size.
- You can create more innovative NFT projects that have more real-time interaction or upgradeable parts due to the fast and cheap transactions on SOL.
From the buyer’s perspective, new users will switch to Solana to escape gas fees and also because of more innovative projects. We are already seeing collections like Degenerate Ape Academy, Solana Monkey Business, and Sollamas all selling well above their mint. In some cases, they are getting a premium just by being on Solana. As more users come into the market, the collections will benefit from the lower supply of collections using SOL.