Two major projects leave Solana — how will this affect the ecosystem?

Two large NFT projects, DeGods, and y00ts are leaving the Solana ecosystem. The first will move to Ethereum, the other will find a new home on Polygon, and both plan to migrate as early as the first quarter of 2023. How this will affect Solana, which is still in no way recovered from the FTX crash, we will discuss further below. 

From Solana to Ethereum

DeGods said in an official statement that the migration will take place in the first quarter of 2023. A roadmap will be presented in January.

There are no details on the bridge yet, but they will be made public as soon as it is ready and tested. According to the developers, this has never been done before at this scale, so they want to make sure the bridge is airtight, to prevent hackers from being able to commit theft.

DeGods’ sister project y00ts will move to Polygon. More details on the migration will also appear after the bridge is ready and tested, and we can expect a roadmap for Season II in January.

Both projects joined Solana in the fall of 2022, when the success of NFT based on that blockchain was almost at its peak. Artists began joining Solana because it has a huge community and one of the fastest ecosystems for developers.

According to Irreverent Labs CEO and co-founder Rahul Sood, Solana has built its brand around gaming NFTs as well as a community of creators and artists. Its transaction speeds are excellent and transaction costs are very low, unlike Ethereum. But now that the projects have matured, the creators have decided to move on.

Migration reasons

The project creators explained that they made the decision to migrate y00ts after receiving a grant from Polygon, but the details of the deal are still unknown. 

According to Rohun Vora, the creator of both collections, the reason for the migration is related to the desire to “explore new opportunities” and achieve further growth of the collections. On the Solana blockchain, both projects have already achieved as much as they could, and according to cryptoslam, they are still at the top of the list.

Vora also said that both DeGods and y00ts will remain on Solana for now, and the migration will be done at the request of the NFT owner.

However, Solana’s overall decline, mainly related to the collapse of the FTX crypto-exchange (the presence of a large number of $SOL in the portfolio of Alameda Research) and desire not to be associated with a rock-bottom blockchain may have played out here. Read more about Solana’s price problem and its relation to FTX, here. 

How might this affect Solana?

DeGods and y00ts projects are the two most popular SolanaNFTs on the market. At the time of writing, the floor price of NFT from the first collection is 695 SOL (~$7,800). The first picture in the DeGods collection was minted on October 8, 2021 at 8 SOL (~$88.3). And the cheapest y00ts token can be purchased for 215 SOL (~$2,403) — was minted on September 6, 2022 at the price of 33 SOL (~$364). Obviously, the loss of such large-scale projects will have a negative impact on the ecosystem. By the way, according to Nansen, their price increased after the news about migration.

The same cannot be said about Solana, the value of which is still falling: over the day the token fell by 10.04%, and over the week by 16.16%. In the Top-20 by Market Capitalization according to CoinMarketCap, this is the worst score. The coin has already fallen to 17th place, behind Uniswap. At the time of writing, the asset is trading at $10.10.

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In addition, the cryptocurrency’s value was affected by the news of the closure of the important Solana-based Serum protocol. It is claimed to be a “pure” form of DeFi, as well as the Ethereum-supported Phantom wallet for Solana, designed for making it safe and easy to store, send, receive, collect, and swap tokens on the Solana blockchain. If the first project was simply shut down, the second decided to distance itself so as not to adopt the bad reputation of the ecosystem. 

This could not but affect the price of the asset, and in a negative way. It is likely that the same thing will happen now. 

Co-founder of the ecosystem, Anatoly Yakovenko, commented on the situation, expressing his sadness that DeGods and y00ts did not focus 100% on Solana. However, he accepted their desire “to conquer the world.” 

“The goal is to onboard everyone in the world to self-custody, and the path there is hard. These unicorns figured out product-market fit in an insanely competitive market. They were built on Solana because Solana is where the best products can be built,” he said. 

Mike Alfred, a well-known investor and analyst, probably disagrees with this fundamentally. The expert compared Solana to Santa Claus, meaning that although children believe in Santa Claus, there are still adults who believe in SOL and hope for token growth in the future.

But 0xCoral co-founder Armani Ferrante, on the contrary, thinks that everything will be fine with Solana, as well as with DeGods, Polygon, and Ethereum, and urged “don’t lose in the soap opera.” This probably means that there are more serious problems to pay attention to now, which, once solved, will make everyone better off.

It’s hard to argue, isn’t it?