The Solana (SOL) network recorded a significant uptick in secondary non-fungible tokens (NFT) sales transactions in Q3 of 2022. That's per a recent BanklessTimes.com data presentation. The site reported that the volume of those transactions grew by 60% QoQ. Its growth was also mainly attributed to the success of Magic Eden V2.
Magic Eden V2 is a closed-source version of SOL's Metaplex protocol's trustless Auction House program. The marketplace accounted for over 95% of the blockchain's Q3 secondary transactions due to its low transaction fees and free listing features. It also has a user-friendly interface, a wide selection of NFTs on offer, and a community focus.
BanklessTimes.com CEO, Jonathan Merry says,
Merry concludes that this growth in SOL's secondary NFT sales market is good news for users and developers. That's because it points to a healthy and growing network. This development is crucial as it provides additional liquidity and use cases for the Solana network.
While Magic Eden currently dominates SOL's secondary NFT sales space, smaller players provide the alternative. These run on the original Auction House smart contract and have captured a modest market share of about 4%. Despite their small sales volume, they could play an essential role in expanding the reach of the Solana network.
Auction House is an open-source codebase that enables third-party marketplaces to facilitate transactions between buyers and sellers easily. This could lead to a future where more escrowless transactions occur, reducing the need for rent-seeking intermediaries.
The idea behind Auction House is to create a trustless network where buyers and sellers can interact without the need for a go-between. That is made possible by using smart contracts, which allow for secure and transparent transactions.
Auction House has the potential to revolutionize the trading of NFTs on the SOL network. Creating a trustless network where buyers and sellers can interact without needing a third party will help to reduce costs and speed up the exchange process.
The success of Magic Eden highlights the potential for innovation and differentiation within the secondary market. It also underscores the importance of creating an enjoyable user experience and providing value-added services that distinguishes your product from others.
Looking ahead, we expect the growth in secondary NFT sales transactions to continue into Q4 and beyond. This growth will be fueled by continued interest from developers and users in leveraging NFTs for various use cases, from gaming to collectables to social media.
And while Magic Eden V2 has been incredibly successful in driving transaction volume on the Solana network, its architecture raises some concerns. Most notably, using a closed-source program for such a critical component of the network could lead some to worry about potential centralization risks.
However, given that Magic Eden is an open-source project and its developers have made the code publicly available, these concerns may be overblown.
