The platform didn’t say why it was closing down, but Solana NFTs haven’t been doing well lately.
Formfunction, a Solana-based marketplace for nonfungible tokens (NFTs), has announced it will close its doors after only 13 months of operation, due to a decline in Solana NFT prices and trading volumes.
Formfunction announced on March 15 that it would “shut down” on March 29 because it “cannot continue to operate.” The decision was reached after “much discussion and careful consideration, it said.
Formfunction shuts down due to declining prices
In the news release, the exact reason why the platform was closing was not given.
The head of community and marketing for Formfunction, who goes by the pseudonym “Magellan,” tweeted on March 15 that the cofounders and the team will “pivot to a new direction, likely outside of the crypto [and] SOL space,” but did not give any more details.
It is with deep sadness to say that @formfunction is being sunset and closed down as the cofounders and team pivot to a new direction, likely outside of the crypto & SOL space.
A thread with a personal statement & reflections 1/n
— Magellan◎
(@CryptoMagellan) March 15, 2023
The marketplace has been open since Feb. 3, 2022, just over a year ago. Magellan says that it made $5 million in sales during that time, even though the market was in a “brutal bear market.”
In March 2022, shortly after its launch, the platform raised $4.7 million in a seed round. The round was led by Variant Fund, a venture capital (VC) firm. Solana Ventures, Canonical Crypto, Pear VC, Palm Tree Crew Crypto, and OpenSea Ventures also contributed.
Since the release of Formfunctions, the Solana NFT space has lost volume and floor prices, and the price of SOL has also decreased.
Since early February 2022, SolanaFloor, a company that collects data on NFTs, reports that its index of “blue chip” NFTs on the blockchain has lost 75% of its value.
In the past year, the number of people who buy Solana NFTs every day has also gone down. According to data from CryptoSlam, the average number of unique buyers per day is about half of what it was at the start of 2022.
Since the release of Formfunction, the price of SOL has also decreased. At the start of 2022, SOL was worth approximately $100. As of this writing, its value has decreased by more than 80% to about $19.
The fall of FTX in November 2022 had a significant impact on the price of SOL, and it has been difficult for it to recover since then. Sam Bankman-Fried, the founder of FTX, was an early investor in the Solana blockchain.
It appears that notable NFT collections that were formerly native to Solana are also abandoning the platform.
DeGods and y00ts, two of the best-performing Solana NFT projects, announced in December of last year that they were bridging to Ethereum and Polygon in order to “explore new opportunities” and allow the collections to continue to grow.
Content Source: cointelegraph.com
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