Cash flow has continuously poured into NFT collections on Solana in the past time. If the summer of 2021 witnessed a strong growth wave of DeFi, from the beginning of 2022 until now, NFT has been the bright spot of the ecosystem.
In this article, I will summarize the developments related to NFT, how to play NFT profitably, and outstanding events on Solana.
Highlights on Solana
Notable events on Solana:
- NFT continues to be Solana's bright spot and attracts cash flow.
- Solana Foundation Issues and Fixes.
- The ecosystem is still actively growing despite the market situation.
Below we will analyze each important event to understand the evolution of the ecosystem as well as related opportunities.
NFT bright spot
As mentioned in Solana's NFT Spring post from over a month ago, Solana's NFT is getting a lot of attention and attracting massive cash flow.
Highlights in the NFT branch on Solana
Take a look at the most prominent information related to the NFT branch in recent times:
Movement of Cash Flows: Previously most of the most valuable collectibles NFTs were concentrated in Ethereum. However, NFT on Solana is attracting more and more cash flow and many high-value collections appear. Among the top NFT collections with the largest transaction volume OpenSea appeared names from Solana.
Strong growth: Solana NFTs is one of the fastest growing markets. To date, over 10.6 million NFTs have been generated from Metaplex - the main infrastructure for NFT generation on Solana. The value of NFT transactions reached more than 2.5 billion USD.
If you read my previous article about Solana and focused on the NFT branch, you must have made a big profit. The next part I will present about the current state of NFT on Solana as well as the appropriate way to play at this time.
General assessment
During the time cash flow is mainly focused on collectibles on Solana. It is not difficult to come across projects with several hundred thousand followers. However, only a few projects can keep cash flow, the rest of the cash flow is continuously transferred to the next NFT projects.
- The number of new NFT projects is so great that it is difficult in itself to keep up with all the relevant information.
- The cash flow is fast, an NFT can be x2, x3 in just one session, but it goes up fast and goes down quickly.
- Since the cash flow is focused on NFT having a "brand", it means that any project with a lot of followers can create hype. Users are turning to buy NFT projects with real products and owning NFT can give them some benefit (from brand NFT → Builder NFT).
As a person who has earned a relative profit in the past, I will share how to play and notes to make a profit with the NFT branch on Solana, note that all are for reference purposes only and are not considered. investment advice.
How to play NFT with profit on Solana
Step 1: Prepare
- As summarized about the NFT cash flow properties above, NFT investment has a high return but also a high risk. Therefore, if we want to participate in speculation in this branch, we should only use a small amount of capital.
- Next, we will divide the capital into many parts to buy NFTs of many different projects. Such a division of capital will reduce risks and help avoid the negative effects of NFT losing value in the short term.
- Next we should join a DAO . The benefit of a good DAO lies in the fact that users can learn and know good NFTs from more experienced people. DAOs also often have give aways for their members, give aways are usually whitelists to help users make sure to mint NFT.
Note: DAO simply means a collective group created with the same purpose. Discord hidden groups that require the user to hold the group's NFT in order to join are also considered DAOs.
Useful Discords that I experience at the moment include Chillchat, The Chimpions, Taiyo Robotics, Sol Army. These Discords have many useful alphas as well as give away in the top Solana, but the barrier is that to enter the hidden discord, users have to spend a fee to buy the project's NFTs.
Step 2: Make profit from NFT
There are currently the following ways to make money from NFT on Solana:
- Hunting whitelist (WL) : How to hunt WL is quite simple, participate in discord and do quests from the project. The usual tasks are inviting others to join, creating images, memes, working hard to chat in discord. Depending on the hype of the project, the competition rate will be different. In my opinion, the easy bets to earn WL are not good, but the good bets are not easy to find WL. Joining good DAOs and hunting their giveaways will give better odds.
- Buying NFTs in Secondary Markets : This is a more affordable way to make a profit in a time of fierce WL competition. We will look for potential NFT projects, buy low and sell high. The NFT evaluation and selection criteria can be found here . Another way is to follow the information from the DAO and select the NFT filtered by the DAO to buy.
- Buy NFTs that generate passive income : These are the NFTs that have gained quite a bit of appeal in recent times. With holding NFT and staking, users can earn project tokens. The project has a strong community and the more use cases the token has, the more attractive it is. Some typical examples can be mentioned such as: Degods , Blocksmith Labs. The drawback of this method is that the barrier is quite large when the NFT of good projects is already high.
From the above sharing, I summarize as follows:
- If you have a large amount of capital, it is possible to make medium-term investments in top NFT projects that have the potential to generate passive income.
- If you have a low/medium amount of capital participating in the DAO and buying NFTs in the secondary market as well as hunting give away in a short-term speculative way will make more sense.
- Focusing on NFT projects that are developing products and buying the project's NFT will give you some benefit instead of paying attention to the usual collectible projects.
Below are a few tools that I find extremely useful for those who intend to focus on the NFT branch on Solana. Hope to help readers earn profits in the future.
Solana's Network Constraints and Solutions
Limitations of Solana's network
If anyone has used the Solana network recently, they must have seen many limitations. From frequent network shutdowns, TPS drops to even 30-minute clock skew, all have a big impact on the user experience. The reason for this lies in Solana's platform design.
Unlike Ethereum and EVM chains, Solana does not have a mempool (where unconfirmed transactions are processed gradually). Instead, the validator on Solana will forward the transaction directly to the processor (Leader).
This works because the validator knows the order of the leader. Therefore, this design creates an opportunity for bots to spam a large number of transactions to validators, thereby maximizing the chances of their transactions being passed.
The reason this becomes a problem for Solana is when the network has a certain trend like IDO , mint NFT or arbitrage opportunities. Users, if participating, often have a large profit, so the number of bots in the trending period is a lot. A large number of transactions are spammed continuously while the number of leader resolves is limited, thereby clogging the network.
“Solana can handle 50K transactions/second without handling those bots?”
Solana has twice caused the network to shut down. One is in September 2021 during the IDO token $GRAPE event, at which time the amount of transactions received by validators exceeded 300K transactions/second. The second occurred in mid-May 2022 during an NFT mint, at which time validators received up to 4 million transactions/second.
⇒ This shows an increasing trend of bots abuse and transaction spam for profit on Solana and the larger this number, the larger the number of transactions that Solana has to process. That's why users see the network experiencing many problems recently, the main cause lies in system overload.
Solution
To solve this problem, 3 measures have been implemented including:
- QUIC: An alternative transaction sending and receiving layer that increases speed and stability.
- Stake by transaction weight QoS: Change the form of receiving transactions from FCFS (First-come-first-served) to distributed according to the node 's stake proportion .
- Priority mechanism for higher paying transactions: Users will be able to charge an additional fee for their transactions to be prioritized. 50% of that will be for validator, 50% will be burned. This fee will still be deducted even if the transaction fails.
These measures will be implemented in update 1.10 and will certainly have a lot of impact on the Solana network. I will have an analysis of this update in the near future.
But in general, this can be seen as a positive signal that the developers still put their top priority on solving the fundamental problems of the network, which will determine the success of Solana in the long term. .
Featured update on Solana
Solana Hacker House
In addition to platform issues, Solana is also actively organizing events to attract developers to its ecosystem.
Solana Hacker House is an offline event held around the world that is still ongoing and the current stop is Tokyo. The event with the participation of leading Solana developers will provide insight and knowledge for other developers.
The Solana Twitter homepage also recently shared many good tips on coding on Solana. Downtrend is the time to strengthen the foundation and perfect the ecosystem.
Solana Explorer
Ethereum has Etherscan , BSC has BscScan , tracking tools are an essential part of any blockchain and so is Solana.
Last week Big Dipper launched an explorer for Solana. The project interface is quite friendly and informative. Readers can access to learn more about this explorer.
List of prominent explorers on Solana:
- Solana Explorer: explorer.solana.com
- Solana Beach: solanabeach.io
- Solscan: solscan.io
- Big Deeper: solana.bigdipper.live
DeFi on Solana
DeFi on Solana continues to be quiet for now. TVL of the system decreased to 4 billion USD. DeFi of both the market in particular and Solana in general will need a breaking point to be able to step through this winter.
summary
Hopefully the article has helped everyone update valuable information in the Solana system over the past time. I will summarize a few bright spots in the ecosystem:
- NFT is still a bright spot to attract cash flow, there will be many ways to play suitable for many different audiences.
- Solana is still actively developing and fixing her problems.
- DeFi on Solana has not yet found a breaking point.
