Is Solana at the brink of a downfall? This final nail in SOL’s coffin could spell harm

• Solana loses out its major NFT collections to Polygon and Ethereum
• Solana’s current state in terms of price and revenue remains bleak

Despite the FUD that surrounded Solana [SOL] over the past year, the interest in its NFTs remained strong. However, this interest in Solana NFTs might start to decline as major NFT collections, DeGodsNFT and y00tsNFTs plan to migrate to other blockchains.

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Parting ways but how?

DeGods made an announcement on 26 December that the NFT collection will bridge to Ethereum in Q1 of 2023. However, the y00ts NFT collection, which is part of the same cohort, would be moving to Polygon. The reason for the move to these different blockchains has not been officially disclosed. 

However, it could be speculated that the move to different cryptocurrencies would help diversify the projects. Furthermore, it would help protect these projects from single points of failure in terms of floor price.

As these projects were the biggest NFT collections on the Solana network, it could cause problems for Solana’s NFT growth. From the data gathered by Dune Analytics, it was observed after peaking at the end of November, the number of Solana NFT transactions had decreased.

After the DeGods and y00ts NFT collections migrate, the number of transactions may end up decreasing even further.

Source: Dune Analytics

However, other blockchains like Polygon, will be able to profit from this migration and outcompete Solana in this sector. Polygon was already observed to be making progress in this sector with multiple collaborations with Reddit and Instagram.

If Polygon manages to capitalize on the y00ts NFT hype as well, Polygon could become a contender for the top spot in terms of NFTs. Although this migration development may sound like good news for Polygon, Solana and SOL holders may be negatively affected by this development in the long term.

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Going ‘SOL’o

Since 14 December, SOL’s prices have fallen by 23.14%. At the time of writing, SOL was trading between the $11.78 and $11.21 levels. It was 33.89, indicating that the momentum was with sellers. 

The Chaikin Money Flow (CMF) was at 0.08 and was also observed to be declining during this period.

Source: Trading View

Along with SOL holders, the overall Solana network was feeling the repercussions of the NFT move as well.

According to token terminal, the fees collected by Solana had already been declining. If the interest in Solana NFTs declined the amount of revenue collected by Solana will also decrease.

Source: token terminal

It remains to be seen whether Solana will be able to bounce back from this situation.