Try Quests to earn SOLNEAR - 4. Free Square: A comparison of NFT market behavior on Solana Vs NEAR against the FTX collapse
Introduction:
While 2022 has already been a rollercoaster year for the crypto industry, the downfall of Sam Bankman-Fried (SBF)’s egregiously mismanaged FTX empire takes the cake as one of the most catastrophic events in the sector’s history.
In a CoinDesk report, it was revealed in a leaked Alameda balance sheet that the FTX sister company had US$14.6 billion of assets against US$8 billion of liabilities, of which US$5.8 billion was primarily held in FTX’s printed-out-of-thin-air FTT token among other illiquid locked tokens and equity securities. In addition, 37% of the FTT tokens Alameda held were allegedly collateralized to borrow USD stablecoins, inciting doubts about the two companies’ actual asset position and their solvency.
Due to the intimate relationship between Solana, FTX, and Alameda, the price of the former’s SOL token quickly plummeted to a low of around US$12. This happened not long after it peaked at a three-month high of US$38 following the announcement of Google Cloud’s support to the Solana ecosystem.
On other hand, the NEAR protocol was one of the Investments of FTX. Therefore this collapse impacts a lot on this network.
The purpose of this dashboard is to provide a comparison of NFT market behavior on Solana Vs NEAR against the FTX collapse.
In this dashboard, the charts on the left are related to the NFTs of the Solana ecosystem, and the right side are related to the NEAR protocol.
NEAR Protocol is a decentralized smart contract platform that focuses on creating a developer and user-friendly experience. Its consensus mechanism is Proof-of-Stake and it uses sharding technology to achieve speed and scalability. NEAR also provides a bridge and scaling solution for the Ethereum blockchain.
Solana is a layer 1 blockchain that uses Proof of Stake and Proof of History as a consensus mechanism in order to achieve considerably higher levels of scalability. Solana is often considered to be decentralized enough in terms of security, but superior in terms of speed because certain aspects of its infrastructure are more centralized than other blockchains. Solana’s native token is called $SOL.
As you can see:
- The number of sales on Solana decreased until Oct 21st, 2022 but after that, it is stable and hasn’t notable change. On NEAR, this metric almost constant over the past three months, even during and after the FTX collapse.
- None of the networks experience a dropped during and after the FTX collapse and their situation is almost constant after this accident compared to 15 days before that.
- The total number of sales on Solana is much more than on NEAR.
- The average number of sales per day on Solana is much more than on NEAR.
As you can see:
- The number of unique sellers on Solana decreased until Nov 11th, 2022, and after that is almost constant. On NEAR, this metric almost constant over the past three months, even during and after the FTX collapse.
- The number of unique sellers on Solana decreased during the FTX collapse and this accident impacted Solana more than the NEAR protocol. On NEAR the number of unique sellers increased after this accident a little.
- The total number of unique sellers on Solana is much more than on NEAR.
- The average number of unique sellers per day on Solana is much more than on NEAR.
As you can see:
- The number of unique buyers on Solana Solana decreased until Nov 11th, 2022, and after that is almost constant. On NEAR, this metric almost constant over the past three months, even during and after the FTX collapse.
- The number of unique buyers on Solana decreased during the FTX collapse and this accident impacted Solana more than the NEAR protocol.
- The total number of unique buyers on Solana is much more than on NEAR.
- The average number of unique buyers per day on Solana is much more than on NEAR.
- In both blockchain, the number of daily unique sellers is more than the number of daily unique buyers.
As you can see:
- The volume of sales on Solana has some spikes during and after the FTX collapse. For example, on Nov 4th, the daily volume reached ~$9M, or on Nov 30th reached ~$11M. These volumes have been unprecedented in the last three months. Same happened for the NEAR protocol. In this network, the volume on Nov 23rd experience its highest high with more than $22K, and this amount was more than all other days of the past three months.
- FTX collapse hasn’t negative impact on the volume of NFTs sold on both of these networks but has led to more and more buying.
- The total volume of sales on Solana is much more than on NEAR.
- The average volume of sales per day on Solana is much more than on NEAR.
As you can see:
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The average price of NFTs on Solana has some spikes during and after the FTX collapse. For example, on Nov 30th the average price of NFTs sold reached more than $350 which was the highest average price in the last three months. Overall, the average price of NFTs hasn’t notable change after the FTX collapse, or even we could say increased a little. The same happened on the NEAR protocol but could say the average NFT price on this network decreased a little.
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The average NFTs price on Solana is increasing over time while this metric is stable on NEAR over this period.
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The average NFT price on Solana is more than on the NEAR protocol.
Conclusion:
- The FTX collapse impacted Sol's price more than NEAR’s price.
- None of the networks experience a dropped during and after the FTX collapse and their situation is almost constant after this accident compared to 15 days before that.
- The number of unique sellers on Solana decreased during the FTX collapse and this accident impacted Solana more than the NEAR protocol. On NEAR the number of unique sellers increased after this accident a little.
- FTX collapse hasn’t negative impact on the volume of NFTs sold on both of these networks but has led to more and more buying.
- FTX collapse caused an increasing price of NFTs sold on Solana and decreasing in the NEAR protocol a little.
- NEAR protocol is a newer blockchain than Solana so we expected this difference on different metrics about their NFT marketplaces. Anyway, I should say, all import metrics for NFT marketplaces like the number of NFTs sold, number of users using marketplaces to buy or sell their NFTs, and volume of NFTs sold on Solana is higher than NEAR protocol and these metrics are decreasing over the past three months on the NEAR blockchain.
The biggest VC losses include investments from Paradigm ($278 million) and Sequoia Capital ($214 million). Other losers include Tiger Global, SoftBank, the Singapore government investment fund Temasek, and the Ontario Teachers’ Pension Plan.
After the FTX contagion blew up, Sequoia Capital marked down its $213.5 million FTX investment to $0.
Paradigm, an investment firm focused on crypto and Web3 companies, poured over $215 million in different investment rounds and owned nearly 7 million shares of FTX. This week, the firm also announced that it would be marking down its investment to zero.
Similarly, Temasek, an investment company owned by the government of Singapore, is estimated to have poured over $200 million into FTX and has 7 million shares, being the second largest outside investor of the failed exchange.
If you want to read the FTX collapse story I recommend reading this article.
As we expected, due to the dependencies between these two networks and FTX, the price of their native tokens (Sol and NEAR) experienced a heavy drop. But let’s see which of them (Sol or NEAR) dropped more.
The above charts told us:
- Sol’s price dropped from ~$33 to ~$11. The price has decreased by 66%.
- NEAR’s price dropped from ~$3.1 to ~$1.3. The price has decreased by 58%.
Based on my analysis, the FTX collapse impacted Sol's price more than NEAR’s price.