OpenSea, the world's largest non-fungible token (NFT) marketplace, announced that it will list Solana (SOL -1.32%) based NFTs on the site this April. Currently only NFTs on the Ethereum (ETH 0.12%) blockchain are available on OpenSea.
Solana has made a name for itself in the last year. Despite a recent pullback of more than 40% from an all time high in November 2021, this "Ethereum Killer" rebounded out of a four month slump thanks to some impressive news.
To date, this will be the most significant utility Solana has supported in the NFT marketplace. Solana will be put to the test against Ethereum, one of its main competitors. If users begin to take note of Solana's low fees and lightning fast speeds, it may position the cryptocurrency to return to all time highs.
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This is welcome news for a blockchain that suffered from more than a few poor headlines in late 2021. The Solana network was down three times as the result of inordinate traffic on the blockchain. Something Solana developers claimed the network could handle. These events caused the price of Solana to crash.
Solana now has the chance to showcase its utility and leave that news in the past. Since its launch in April 2019, it has built a reputation as one of the fastest and cheapest blockchains out there. Contrastly, using the Ethereum network for NFTs can be costly for users. During times of increased network traffic, there are high fees when users create or purchase NFTs. The Solana network boasts speeds of up to 65,000 transactions per second for fractions of a penny. That is roughly 4,000 times faster than Ethereum and exponentially cheaper.
DeFi developers are well aware of these perks on the Solana network. To quantify the utility of the Solana ecosystem, we can use the total value locked (TVL) statistic. Total value locked is a sum of all assets a blockchain supports in DeFi protocols. It is represented as a dollar amount. A large TVL indicates that a blockchain offers unique utility that attracts developers and money. Currently, the blockchain has the fifth largest TVL among competitors. A slight pullback from fall of 2021 when Solana rose to as high as third. Solana is no stranger to the top and it may return to those heights.
What's the opportunity?
Solana now has direct exposure to the busiest and most prominent NFT marketplace. In just the month of January, there was nearly $5,000,000,000 in volume traded on OpenSea. It was also reported in the same month that the platform surpassed one million wallets, or users. The next largest platform, Rarible, has just under 100,000 wallets. OpenSea will help Solana gain exposure to millions of digital artists, investors, and NFT collectors. If all works out, this new found exposure should bode well for the price of Solana.
Another milestone for Solana
But now the blockchain is at a crossroads. It must prove to users that the bugs that led to the network outages are a thing of the past. This crossroads presents an opportunity for investors. The latest news and price support Solana has found should garner considerable attention. Keep an eye out for this Ethereum opponent to capitalize on a historic opportunity.
