Solana NFT marketplace Metaplex took to Twitter to announce trimming its working force to ensure the long-term sustainability of the protocol.
Although they were not directly affected by the collapse of FTX, the marketplace stated the resultant indirect impact on the market has forced the firm to take a “conservative approach moving forward”.
Founded in 2021, Metaplex is a Solana-based protocol that aims to be the de facto NFT tool on the blockchain. It also recently launched its own governance token, MPLX which however did not perform well in the ongoing bear market.
Due to the FTX insolvency, the total crypto market cap tanked over 20% in a span of just four days. While prices of nonfungible tokens [NFTs] on Ethereum fell 14% over the same period, Solana NFTs suffered more blows.
For instance, SolanaFloor revealed that their aggregate floor value dropped 68% from $424 million to $135 million over the last few days.
Similarly, the floor price of another SOL-powered platform DeGods plummeted by a staggering 66% to $2,700. Solana Monkey Business and y00ts too registered a drop of 68% and 70% respectively in the same time period.
One of the reasons for the poor performance of its NFT collection is attributed to FTX’s advocacy of the Solana layer-one blockchain.
During the exchange’s implosion, the price of the SOL token tanked 68% to $12. FTX’s fungible exchange token known as FTT and FTX’s SOL-based decentralized exchange [DEX] Serum was down 89% and 53%, individually, in recent days.
Investors Might Hold Off On Buying Solana-Based NFTs
It is interesting to note that FTX and Alameda Research have been closely linked to the Solana blockchain since the protocol’s inception in 2020. Both entities have been instrumental in boosting the network’s traction and visibility.
Moreover, SOL is also Alameda’s second-largest holding token, representing about 10% of the crypto’s market cap.
Due to the prevailing uncertainty on Solana-based projects, investors might look for other leading layer-one protocols to put their long-term bets. The market has currently entered a new risk-off phase, and it might take some time before confidence returns.
Additionally, NFTs being riskier assets has a much greater impact on the returns [profits/losses]. Hence, risk-averse investors might wish to hold off on buying NFTs until the issue is fixed.