Could The New OpenSea Update Make SOL an Ethereum-Killer?
The cryptocurrency space has been bearish since the end of November 2021, yet new updates coming from one of the biggest altcoins in the industry has the potential to revolutionize the NFT and cryptocurrency market simultaneously. After recent reports emerging about the possibility of the world’s biggest NFT marketplace adding Solana to its integration system, the token termed ‘ETH Killer’ may be prepared to do just this in 2021 and the years to come.
But how has news of this potentially revolutionary NFT update come about and why is the NFT market still strong despite the crypto winter season that has led to massive price falls? Let’s take a look.
NFTs are rising
Entering 2022, the Non-Fungible Token (NFT) markets are red hot. While the likes of Bitcoin, Ethereum and a majority of the altcoins have corrected by more than 20% in the last 4 weeks alone, NFT collectables and the marketplaces are on track to record a sensational and record-breaking month in terms of trading volume. January has already seen more than $3 billion worth of trading volume take place using just Ethereum on Opensea, with $3.5 billion being the highest monthly volume for any NFT marketplace.
Generally, cryptocurrencies and the NFT markets run in parallel, but 2022 and the final quarter of 2021 are an exception. When cryptocurrencies started correcting in November, many expected NFTs to follow a similar suit. Since Ethereum controls a monopoly over the NFT market, the 50%+ price correction had many investors wary.
Turns out, NFTs have been exploding the last few months, because of the cryptocurrency flash crash itself. Dragos Dunica, the Co-Founder and Chief data officer of Dappradar has said the following, “NFTs are continuing to perform well not necessarily despite falling crypto prices, but arguably and in part because of that”.
The reason for this is that investors are getting a massive price discount, in fiat currency while purchasing NFTs on various marketplaces. Since Opensea requires customers to purchase the assets with Ethereum or Polygon itself, current buyers have more than a 50% discount on the value of Ethereum, compared to 3 months ago.
With the rumours of Ethereum’s much-awaited update coming soon, people are betting on the price of the token going up. But, one big development has been the reduction of ETH’s monopoly in the last year.
Solana is increasing market share for NFTs
Despite Ethereum being the most used token for NFT marketplace integrations especially through OpenSea, Solana has surpassed more than $1 billion in trading volume in January for the first time ever. Analysts at JPMorgan have also billed Solana to be a major threat to Ethereum’s NFT market dominance since its monopoly has shrunk from 95% at the start of 2021 to 80% currently.
Solana has become the preferred token of choice for many NFT marketplaces, due to its considerably lower transaction costs, higher throughput and speed. Ethereum on the other hand has been experiencing a drop in usage due to the insanely high gas fees and low transaction throughput. While ETH manages to complete only 15–20 transactions per second on its blockchain, Solana has the capacity to conduct more than 75,000 transactions. Solana’s fees are also lesser than a dollar, while Ethereum’s gas fees have gone higher than $350 in their peak.
Despite these changing market positions, Ethereum had not much to fear about with its upcoming updates, but all has changed in the past week. Breaking news coming out of OpenSea is that the marketplace is working on integrating Solana as an option of choice for NFT creators and buyers.
Solana on OpenSea
Most investors and followers of the NFT space know OpenSea is the number 1 NFT marketplace in the world. ETH’s dominance in the space is attributed to the fact that only their token along with Polygon’s (MATIC) have been made available to buyers and sellers.
But the leading NFT marketplace is now looking to support Solana into their ecosystem, as per major leaks and screenshots coming from Jane Manchum Wong, a well-known blogger who has managed to release features from companies like Facebook, Twitter and Instagram before they were even announced.
Jane took to her Twitter to share a screenshot of the OpenSea server, confirming that she found references of Solana’s possible integration after reverse-engineering OpenSea’s website.
Speaking to Decrypt on the subject matter, Wong said that there were references to this in the user interface which OpenSea tried to hide.
OpenSea in response to this breaking news has termed it as ‘old speculation’, with the company’s representatives refusing to comment anymore about the update. Ethereum has tallied more than $23 billion worth of trading volume in 2021 through NFTs, with OpenSea being valued at almost $15 billion.
If the update is confirmed, Solana will have access to this huge marketplace, which will give NFT developers and buyers the opportunity to still use OpenSea whilst using a cheaper alternative to Ethereum.
Currently, huge NFT collaborations with Michael Jordan, the Solana Monkey Business and Degenerate Ape Academy have allowed Solana to collect more than a billion worth of trading volume, but confirmation of the OpenSea integration will most definitely sky-rocket interest in the token once again.
Many mainstream tech companies have also shown interest in wanting to enter the NFT marketplace, making Solana a great choice if they are available on OpenSea. YouTube’s CEO, Susan Wojcicki recently hinted that the platform will be considering integrating NFTs in the coming year, giving creators another way of monetizing their content.
Meta also has addressed their plans of getting into the space, along with big tech companies like Microsoft as well. Currently, Solana is the second biggest player in the Non-Fungible token space, but if the new update goes ahead on the OpenSea Ecosystem, the Ethereum Killer will start to live up to its name.