After four months of declines following FTX’s collapse in November, transactions on Solana have rebounded thanks in part to a fresh buzz around NFTs drowning out murmurs of the blockchain’s prior ties to Sam Bankman-Fried.
FTX sister firm Alameda Research was heavily invested in SOL, Solana's native cryptocurrency, and the collapse of FTX and Alameda cut the token’s value in half. But the Solana ecosystem has soldiered on, and, according to cofounder Raj Gokal, it's not looking back.
“It feels like it's pretty far in the rearview mirror to be honest,” he told Fortune. “Six months is a lifetime in crypto.”
The blockchain received a boost from new xNFT project Mad Lads, which surpassed all other NFT projects in sales volume last week. On Tuesday, the profile picture NFT collection was still third in sales, just below Yuga Labs’ Bored Ape Yacht Club and Azuki, according to CryptoSlam.
Yet, unlike other profile picture projects, Gokal said Coral—the Web3 company behind Mad Lads—was able to get a lot of buy-in from its community by taking the time to build out a unique product before releasing its NFT collection. Coral’s product, an NFT wallet called Backpack, has broken barriers, Gokal added, by enabling the capabilities of special non-fungible tokens—xNFTs—that serve as their own fully on-chain applications.
It's this kind of creative thinking, and the harnessing of Solana’s speed and affordability, that's made the blockchain popular for NFTs lately, Gokal said. Mad Lads’ success has provided much-needed excitement to the ecosystem after two of Solana’s most prominent projects, yoots and DeGods, migrated to other blockchains. The Mad Lads launch also proved that the blockchain has improved since its last outage in February, and is getting better at accommodating a critical mass of users, Gokal added.
“The Solana ecosystem is thriving, and it’s at a point that the rest of the industry is kind of fixated and has to pay attention,” he said.
Successful transactions on the blockchain dropped by about 25% from October to November, fueled in part by FTX’s demise, and this downward trend continued for months. Things started to turn around in March, with April a second consecutive month of growth, with just under 800 million transactions recorded, according to blockchain analytics company Flipside Crypto.
Part of what's attracting people to the network, Gokal said, is a feature introduced in April that can compress NFTs, allowing users mint more at a lower cost. With state compression, minting 1 million NFTs would cost about $110, instead of the more than $250,000 required in the previous iteration of Solana, according to a company blog post.
Gokal pointed to one project, DRiP, which uses state compression for free weekly NFT airdrops to its community of about 200,000. Other companies, like Dialect and Crossmint, are, respectively, using the technology for blockchain-based stickers in messaging and customer loyalty uses.
“It’s only just beginning to seep into product experiences that actually take advantage of that performance,” Gokal said.
