How Have NFT Projects in Solana Evolved? A Deep Dive with SolanaFM
Introduction
The first ‘Solana Summer’ rally in 2021 was commonly attributed to the massive expansion of Solana’s NFT ecosystem. The first wave of PFP*-based NFT projects including SolPunks, Solana Monkey Business and Degenerate Apes drove the number of unique owners of NFTs in Solana to hit 1.5M by the end of 2021. This number has now tripled to 4.7M at the time of writing (7th July).
With the NFT ecosystem in Solana growing at such a tremendous pace, we must ask ourselves — how have NFT projects in Solana evolved over the past months? What can we expect to see in the future? This is what SolanaFM aims to find out by diving deeper into previous and newly established blue-chip* collections, highlighting their innovations and understanding possible use cases in the future.
PFP NFT: NFTs that can be displayed as one’s profile picture.
Blue-Chip: Top 5 NFT collections (by market cap).
Overview of NFT Projects in Solana
Solana’s NFT ecosystem has seen substantial progress this year as more projects are integrating use cases beyond PFPs. Some recent innovations include the use of native tokens, gamification of NFTs and even subsidiary NFT collections by the project owners. The timeline below shows an overview of popular NFT projects that were introduced on Solana.
Evaluating Solana’s Blue-Chip NFT Projects
Onto the main question — how have the NFT projects in Solana evolved? To answer this, we deemed it suitable to explore two of the ‘OG’ blue-chip projects established in 2021 (Solana Monkey Business and Degenerate Ape Academy) and compare the utility of their NFTs to the newer blue-chip projects that were introduced in 2022 (STEPN and DeGods).
*It is important to note that the ‘SOL to USD’ conversions seen in the following case studies are estimated figures based on the corresponding time periods.
*Here are the definitions for the market statistics used in the case studies:
Market Share: Project’s Market Cap vs. overall NFT Market Cap
Holders-to-Total Ratio: Number of Unique Holders of the NFT vs. Total supply of the NFT. (This metric describes the diversity of ownership of the NFT collection.)
Floor-to-Mint Ratio: Current Floor Price of NFT vs Original Mint Price of NFT. (This metric describes the growth of the project from its launch.)
Listed-to-Total Ratio: Number of NFTs listed on secondary markets vs. total supply of NFT. (This metric describes how many NFTs are listed on secondary markets. Fewer listed NFTs reflects higher confidence in the project.)
Case Study: ‘OG’ Blue-Chip Projects
Solana Monkey Business
Solana Monkey Business has consistently been one of the top 5 NFT projects since late 2021. Their Gen 2 PFP collection was launched on 3rd August 2021, releasing 5,000 NFTs at a mint price of 2 SOL (~$68). At its peak, this collection achieved over $3,000,000 in trading volume and a floor price of over 600 SOL (~$140,000). In addition, the collection holds the record for the most expensive NFT sale in Solana (worth $2,000,000). Currently, the floor price of an SMB NFT is at 190 SOL (~$6,650). Let’s examine the collection’s current market statistics and use cases.
SMB Market Statistics
SMB Use Cases
The main use case of Solana Monkey Business NFTs is to provide access to MonkeDAO, a community-driven DAO with over 1,600 verified Monkes. MonkeDAO pursues various initiatives like running a Solana validator and running a SOL community stake pool (DAOPool) to contribute to the Solana ecosystem.
Apart from access to the DAO, Solana Monkey Business appears to be a standard PFP collection — much of SMB’s success would be linked to their consistent engagement in the Web3 community, including co-hosted events at the recent NFT NYC event and a treasure hunt at the Solana Breakpoint in Lisbon.
As seen in the roadmaps above, future developments include plans to launch their own native token and secondary Monkeverse NFTs with aims to venture into the Metaverse. Though we have not seen any public releases of the Monkeverse, this appears to be a big step towards innovating new use cases for the NFTs.
Degenerate Ape Academy
Degenerate Ape Academy was one of the top 5 NFT projects of 2021. Presently, the project ranks 6th in terms of market cap. The PFP collection was launched on 14th August 2021, releasing 10,000 NFTs at a mint price of 6 SOL (~$250). At its peak, this collection achieved over $1,500,000 in trading volume and a floor price of over 100 SOL (~$14,000). The floor price of a Degenerate Ape today is about 45 SOL (~$1,575). Let’s explore the statistics and use cases of the Apes — how different are they from the other PFP projects?
DAA Market Statistics
DAA Use Cases
By owning a Degenerate Ape, holders can ‘enroll’ into the Ape Academy and DegenDAOO, a community-run DAO. Similarly with MonkeDAO, the strength of the collection lies in its community; DegenDAOO operates a Solana validator, and the 3800-strong community provides holders with exclusive whitelist access to other popular NFT mints within the ecosystem.
The project has also launched secondary collections including Degenerate Trash Pandas and Degenerate Ape Kindergarten in efforts to build on the Degeniverse.
As seen in the figure above, future developments of the Degeniverse include the creation of a Play-to-Earn game, “Trash with Frens”, and the creation of an on-chain currency as a medium of exchange. Though we have not seen any public releases of the game, this is also a big step towards the innovation of more use cases for the DAA collection.
Case Study: New Blue-Chip Projects
We observe that though the OG blue-chip projects are in the process of evolution, these collections achieved ‘blue-chip status’ by leveraging on the strength of their community engagement.
How have the newer projects taken the utility of Solana NFTs to another level? Let’s have a closer look at DeGods and STEPN.
DeGods (33.3%)
At the time of writing, DeGods is the 2nd largest NFT collection on Solana by market cap. DeGods is a PFP collection of 10,000 NFTs launched on 8 October 2021 for a mint price of 3 SOL (~$470). At its peak, this collection achieved over $2,000,000 in volume and an all-time high floor price of 400 SOL (~$16,800). Currently, the floor price of DeGods ranges between 270 and 300 SOL (~$9,450 — $10,500).
Degods Market Statistics
DeGods Use Cases
Currently, the main use cases of DeGods involve staking to earn $DUST as well as the minting of DeadGods.
After the removal of their viral failed experiment, the ‘Paper Hand B**** Tax’ (PHBT), creators of the project revealed $DUST, the native token of DeGods, for users to stake their DeGods.
The launch of $DUST paved the way for a slew of other use cases like NFT auctions, raffles and the purchase of DeGods merchandise. These features incentivise holders to stake their DeGods for $DUST, lowering the supply of listed NFTs on secondary markets and thus continuously placing a premium on the collection’s floor price.
The project creators also launched the minting of DeadGods in early 2022, allowing holders to upgrade their DeGod into a DeadGod for around 1000 $DUST. DeadGods are reimagined NFTs that can earn 3x more $DUST when staked. This proved to be successful in elevating the quality of the collection and increasing its value.
STEPN
At the time of writing, STEPN, one of Solana’s first non-PFP collections, is the largest NFT collection on Solana with a market share of 12.3%. On 2 December 2021, the “Move-to-Earn” lifestyle app released 99,999 Exercise Utility NFTs at a mint price of 1.3 SOL (~$300).
It is important to note that the total supply of this collection is not capped at 99,999. In efforts to onboard new users, the project allows for additional ‘breeding’ of new sneakers. Since its launch, over 600,000 additional NFTs have been minted through the app — this likely explains why STEPN’s market cap has been rising despite a steady decline in floor prices.
In this case, we will not assess the project’s market statistics; it would be an inaccurate comparison with the other case studies in the study.
What are the main use cases of these NFTs, and why are users minting so many of them? Let’s explore the various concepts behind this app’s breakthrough.
STEPN Use Cases
STEPN’s NFTs serve as ‘virtual sneakers’ for holders to earn rewards by exercising through their app. Users must possess the NFTs in-app to earn rewards, and rewards are earned based on the attributes held by each sneaker. In this case, users may be more incentivised to hold their NFTs and breed them instead of trading them on secondary markets.
STEPN launched their native tokens, $GST and $GMT, on 1st March 2022. $GST (Green Satoshi Tokens) serve as the in-app reward currency used to mint new sneakers, repair/upgrade existing sneakers or simply be swapped into stablecoins ($USDC). $GMT (Green Metaverse Tokens), on the other hand, serve as STEPN’s governance token.
STEPN has integrated GameFi elements into the collection instead of serving as a standard PFP — a fresh take on utility for NFTs. The project also aims to commit a portion of profits to purchase Carbon Removal Credits on the blockchain, which could reduce over 69,000 tonnes of carbon from our planet every year.
However, will the infinite supply of NFTs and $GST tokens cause problems for the project in the future? Though various burn mechanisms have been introduced, the project creators are in the midst of ideating new strategies to keep the supply of NFTs and tokens at sustainable levels.
What Can We Expect in Future Projects?
(Disclaimer: a fairly speculative section.)
With projects like DeGods generating more utility through their deflationary token and projects like STEPN building on gamification and social causes like climate change, we may see future blue-chip projects building on top of such use cases.
The current trajectory sees Solana NFTs unfolding on a path of diversification, with many existing developments going towards Gaming.
GameFi Developments in Solana
Solana’s GameFi ecosystem has been around for a while — projects like Aurory and Star Atlas have been some of the leading projects in the space. With more GameFi NFT projects like BitBrawl and Panzerdogs being built with Solana, we might be a few steps closer towards having games in Solana penetrate the mainstream gaming industry.
Additionally, with the release of the Solana Mobile Stack, we may possibly see the launch of mobile games in the near future.
The Gaming Ecosystem — Solana’s Next Breakthrough?
NFTs have developed into a first point of contact towards larger ecosystems. For instance, projects like Genopets and Aurory have leveraged on NFT mints to capture a market of investors, subsequently expanding on the utility of the NFTs by integrating them closely into the games as assets.
The added value of NFTs in games can be further supported by the following statistics:
The Block, in 2021, funding of NFT and Gaming firms (across all chains) have seen parabolic growth compared to previous years, receiving nearly $5B in venture funding.
With more capital being deployed into GameFi, we can expect an influx of innovations that will boost the value of NFT gaming projects. Additionally, the next stage of Solana NFTs should aim to bring together different ecosystems within the blockchain (e.g. DeFi, Wallets, Analytics), and GameFi projects appear to be one effective way to do so.
With that being said, although the future of GameFi looks promising, these projects have to be executed perfectly on various fronts — on top of the game itself, other aspects like in-game currency tokenomics have to operate sustainably as well. We will discuss tokenomics in more detail in our upcoming report with Spartan Labs.
Appendix
MonkeDAO DAOPool: https://daopool.monkedao.io/
NFT NYC: https://www.nft.nyc/
MonkeDAO Roadmap: https://monkedao.io/
SMB Roadmap: https://solanamonkey.business/timeline
Degen Trash Pandas: https://degentrashpandas.com/
DeGods Staking Platform: https://stake.degods.com/
DeGods Merchandise: https://merch.degods.com/
StepN Article on Carbon Neutrality: https://stepnofficial.medium.com/stepn-taking-bold-steps-toward-carbon-neutrality-766297728417
The Block Digital Asset Outlook 2022: https://www.tbstat.com/wp/uploads/2021/12/The-Block-Research-2022-Digital-Asset-Outlook.v2.pdf
