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Hello!
Yesterday, I made the mistake of going to Trader Joe’s on 6th Avenue right after work, thinking I’d be stuck in the throng of shoppers dressed in business casual and yoga wear.
My local grocery store is rarely crowded and I don’t hear people rambling on about closing deals on their AirPods. This is why Brooklyn is the best borough. But I digress.
Dissecting the Solana NFT Marketplace
Yesterday, long-running Solana NFT marketplace Hyperspace announced it would close its doors on September 17. This was the latest blow in the long-running decline of the NFT industry, which has never fully recovered after 2022’s massive crypto crash.
Hyperspace launched in September 2021 as hype was building around the emerging Solana blockchain and SOL was nearing its current all-time high. At the time, it was a Solana NFT tracking tool. In February 2022, shortly after NFT marketplace OpenSea hit a $13.3 billion valuation, Hyperspace raised $4.5 million in a round led by Dragonfly and Pantera.
Since then, Hyperspace has operated an NFT marketplace and launchpad, and made the Sui and Avalanche blockchains more accessible. But Hyperspace never made it to Hyperspace.
According to industry insiders and Hyperspace’s co-founders, Hyperspace’s demise was due to its failure to find a meaningful niche in the NFT market, a position it never regained in 2021.
Hyperspace co-founder Kamil Mahfoud told me he doesn’t think the platform has grown large enough to justify venture-scale profits, saying the company has tried to adapt many times and that the platform has had considerable success with its “whimsical” approach.
“But at least for me personally as a founder, I don’t want to be in a position to fight the market. It’s much better for us to attack a bigger market and grow that way,” Mahfoud said.
When asked what this larger market might look like, Mahood said he and his team have yet to decide, but acknowledged that “NFTs have a much smaller TAM than almost every other sector within crypto.”
That certainly seems to be the case. NFT trading volumes are a fraction of what they were in 2021 and 2022. Popular NFT marketplace Magic Eden plans to expand beyond NFTs. In recent months, Starbucks, X, and GameStop have all dropped NFT efforts and faced a flurry of lawsuits over ill-fated collectibles. The graveyard of past Solana NFT startups is already pretty large. Oh yeah, the SEC issued a Wells notice to OpenSea last week.
It makes you wonder how NFT platforms can become profitable businesses these days.
Bangars, an anonymous contributor to NFT platform 3.land, said NFT platforms may need to moderate their expectations.
“The idea of ​​NFTs being used as a large-scale means to raise funds to do something for a project is completely over,” Bangers said.[A]rt is fun, culture is fun…NFTs are fun even if they aren’t $300 lol.
Mahood said something similar when asked about the success of meme coins compared to NFTs.
“NFTs are scarce,” Mahood said. “NFTs were doing really well until they stopped selling.”
Mahood plans to remain in the Solana ecosystem for its next venture, adding that Hyperspace has “lost a little bit of its focus on Solana” as it expands into other chains.
Jack Kubinec
Zero In
I’ve been looking at NFT Pulse a lot lately, it has some really well aggregated NFT data.
Here we can see how Solana, Polygon, and Base have taken NFT market share from Ethereum over the past two years: At the start of 2021, the NFT market was essentially all on Ethereum, with Ethereum now holding 33% market share and Solana at 28%.
Despite the challenges facing NFT marketplaces, some venues are performing well, particularly Solana: Magic Eden generated $56 million in trading revenue over the past year, according to NFT Pulse, while OpenSea and Tensor rounded out the top three, raking in roughly $26 million and $12 million, respectively.
Jack Kubinec
Good DM
message Adam GutierrezSenior Development Support Engineer phantom:
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