Compressed NFTs are Driving Solana Forward
After nearly two years of an NFT market that trended down only, things are finally beginning to look up for Solana.
Collection launches are rising, mint volumes are trending higher, and secondary activity is shifting.
A new Solana innovation: Compressed NFTs.
To begin, let's rewind to late 2022 after the FTX collapse. Things weren't looking positive for the Solana NFT market.
In the charts below, Solana weekly NFT mints had dropped from ~150k per week in May 2022 to ~50k per week through February 2023. In Ethereum, that trend also mirrored downward:
Secondly, the Solana weekly collection launches below had dropped from ~300 per week in May 2022 to ~100 per week through February 2023. Again, in Ethereum, the trend similarly mirrored downward:
Third and lastly, looking at secondary trading volume in USD terms, both ecosystems were relatively flat through February 2023:
To summarize, after FTX collapsed and into the beginning months of 2023, the NFT markets on both Ethereum and Solana were really quite stagnant.
However, starting in March, we see a continuation of this downtrend in ETH but a reversal in Solana.
ETH's Weekly NFT collection launches remained slow beyond March, while Solana's Weekly NFT collection launches recovered quickly:
Secondly, again, we follow the weekly number of mints.
In Ethereum, mints continued to fall in Q2 and Q3, but as shown below in orange, the Solana weekly mints chart rose sharply with the launch of cNFTs:
Third and lastly, following secondary NFT USD volumes, we see at first glance, the trends in both Ethereum and Solana's USD volumes appear down:
But looking more closely at the orange bars above, cNFTs in Solana are just beginning to emerge and become the positive anomaly they are today.
We can isolate these tiny orange bars visually. Recently, there has been a spike and subsequent stabilization in cNFT USD volumes:
For the first few months of their existence, one could have argued that the large number of cNFTs being minted didn't mean much since they were virtually free.
Now, however, cNFTs aren't simply being minted because they are cheap - they're actually accruing value.
Users and creators have expressed their preferences clearly.
Below, weekly cNFT mints 20x'd from ~200k to ~4M in just a few weeks after February 2023, and new collections by NFT type show an almost complete switch to cNFTs:
Through September 2023, an astounding 54 million cNFTs have been minted on Solana. Since Q2 2023, over 95% of all NFT mints on Solana are now cNFTs - showing the Solana ecosystem's continued innovation has finally paid off.
Compressed NFTs are leading a resurgence in Solana, making cNFTs one of the most impressive demonstrations of true PMF in crypto.