Solana dominates Ethereum, Bitcoin in NFTs. Activity: What’s next for SOL?

Solana is dominating other blockchains, including Ethereum and Polygon, in various indicators of non-fungible token (NFT) activity in the third week of January, according to on-chain data from SolanaFloor.

Solana dominates Ethereum, Bitcoin in NFT activity.

From the post shared As of Jan. 23, Solana has maintained its NFT lead among competing blockchains, primarily Ethereum and other high-throughput alternatives. To date, the blockchain has recorded its highest numbers in unique wallets, transactions, unique buyers, and first-time wallets over the past week.

For example, Solana had over 106,000 unique wallets as of the third week of January 2024. This is more than double what was generated on Ethereum. Meanwhile, Solana had over 22,000 original wallets, roughly three times as many as Ethereum and twice as many as Bitcoin.

At the same time, more than 2.8 million transactions were posted on Solana. This figure is more than 20 times that of Ethereum during the same period.

Extrapolating from this data, we can see that blockchain is becoming increasingly popular among NFT projects, collectors, and traders. Several factors may contribute to Solana’s NFT success.

This platform is known for its high throughput and low transaction fees. Considering how sensitive miners and active traders are to transaction fees, Solana is emerging as a layer 1 option for projects that want to enjoy the security of the mainnet while also benefiting from low transaction fees.

Legacy chains, including Ethereum, continue to struggle with on-chain scalability issues. Mining on the mainnet often leads to high fees, which can reduce profitability, especially for active traders and collectors.

Beyond the scalability benefits, Solana’s ecosystem is expanding rapidly. Despite a significant drop in the price of SOL in late 2022, a dramatic resurgence in 2023 boosted on-chain activity as meme coins bloomed and NFT projects decided to launch on Solana.

With the continued recovery of SOL and the growing number of projects choosing to deploy on mainnet, 2024 could see further advancement of on-chain activity, including NFT mining and trading, to new levels.

Developers at work, will SOL recoup $125?

As the network attracts users, developers are working to make the platform more robust and decentralized. In 2024, Solana developers plan to activate Firedancer, a verification client developed by Jump Capital. This client will further decentralize Solana’s infrastructure, improve performance, and significantly improve reliability, helping eliminate the network outages that have plagued the blockchain in 2022 and early 2023.

SOL is trading around $80 at the time of writing. The coin is down 34% from its December 2023 high and is below its dynamic 20-day moving average, indicating weakness.

Key support remains around $70. If there is demand at this price range, SOL could recover and retest $125 in future sessions.

Featured image from Canva, chart from TradingView

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