Solana slips as NFT activity wanes

The drop in Solana’s price comes after it announced a partnership with Google Cloud

A smartphone displays the Solana name and icon                                 
Solana is now the 10th largest crypto by market cap after drop in its price – Photo: Shutterstock
                                

Solana (SOL) was trading down by 13% at $31.16 – as of 15:00 (UTC) on 7 November – as declining non-fungible token (NFT) trading activity continued to weigh on the cryptocurrency. 

Solana partners with Google Cloud

The token of the proof-of-stake Layer 1 blockchain had enjoyed healthy gains over the weekend, as investors reacted to developments at Breakpoint, the Solana Foundation’s annual conference in Lisbon. 

During the four-day event, Solana’s developers announced an ecosystem with Google Cloud. The tech giant’s Blockchain Node Engine will feature on the Solana blockchain from next year, participating in and validating the network. 

Among other improvements, it is hoped that the partnership could ease congestion on the blockchain, which rose to prominence as a faster alternative to Ethereum (ETH). 

Speaking at the conference, Solana co-founder Anatoly Yakovenko admitted: “We’ve had a lot of challenges over the last year. I would say this whole last year has been about reliability.”

Solana has been hit by several outages throughout 2022, which included the most recent one at the start of October that lasted more than six hours.

Yakovenko added: “[We’re] in a constant fight between performance, security, throughput, and decentralization, all of these problems... whenever you improve one you may actually hurt some of the other ones but I think we've done an amazing job in solving a bunch of those.”

Solana NFT transactions halve

The updates and improvements revealed over the weekend drove Solana as high as $38.48, its highest level since mid-September. 

Such momentum was promptly arrested on Monday, however, as investors and traders reacted to the substantial decline in Solana NFT trading volume.

Having reached a near-record high of $134m (£117m) in September thanks to a change in creator royalties and the profile picture project, y00ts, Solana NFT volumes fell by 50% in September. 

Down 3.7% in the past week, Solana is now only the tenth-largest cryptocurrency with its market capitalisation of $11.4bn lagging behind the likes of Dogecoin (DOGE) and Cardano (ADA). At the start of the year, the cryptocurrency’s market capitalisation stood at $52.7bn.

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