Solana Flips Ethereum For NFT Volumes

Momentum has shifted to Solana as Ethereum NFTs face headwinds from high gas prices.

Will Solana continue its winning streak?

NFT trading volumes on smart contract platform Solana have surpassed those on Ethereum for the first time ever.

Analysis from blockchain data platform CryptoSlam shows that Solana NFT volumes topped $366 million in December, while Ethereum sales were just above $353 million.

Magic Eden screenshot
The Magic Eden marketplace has a thriving Solana NFT trading scene.

What is important is not just the raw number, but also the trajectory. Solana has enjoyed a startling recovery over the last 12 months, as it shook off the legacy of its association with Sam Bankman-Fried and FTX, and staged an impressive rally from a low under $10 to well over $100. Along the way, the platform has managed to cultivate a thriving NFT ecosystem.

SOL/USDT chart, TradingView
After a rocky end to 2022, Solana has posted an outstanding recovery

Ethereum: Struggling With Headwinds

Ethereum, meanwhile, has struggled to retain its dominance. As activity picked up in the crypto space due to hype over a Bitcoin spot ETF, Ethereum has lagged, losing value against BTC.

Worse, soaring gas prices have pushed out smaller users, all but destroying NFT projects that were founded in the quieter times of 2023, when gas was regularly down in the single-digit gwei region. Many free-mint and low-cost projects now see practically zero volumes, because the cost of the gas fee equals or exceeds that of the NFT itself. Solana, with its ultra-low transaction fees, is highly attractive to the NFT community.

Moreover, there's a sense that Ethereum has seen its hype, while Solana—a newer platform with a far lower market cap—has room for growth. This is largely just a part of the regular crypto market cycle, as interest and capital rotates from one project to another. However, at the moment, Solana is enjoying its time in the limelight, at Ethereum's expense.

What Does The Future Hold For NFTs?

Solana has carved out a niche for itself as the dominant NFT platform, taking Ethereum's crown. With gas fees remaining so high on Ethereum mainnet, it's highly unlikely that the original smart contract platform will win back users en masse.

To date, L2 solutions have not proven so popular, though there are notable exceptions. Donald Trump's NFT collections have launched on Polygon, for example, and generated millions of dollars worth of sales and trades.

For now, however, there's a new sheriff in town. Momentum is with Solana, and given the nature of crypto communities and network effect, it's likely to consolidate its lead in the coming months.

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