Formfunction to Shutter Marketplace amid Solana NFT Slump

Formfunction, a nonfungible token (NFT) marketplace based on Solana $19, has announced its closure after only 13 months of operation because to a drop in Solana NFT pricing and trade volumes.

Formfunction declared on March 15 that it would “close down” on March 29, stating that it “could not continue to operate.” The decision was taken after “much discussion and careful consideration,” according to the statement. The cause for the platform’s closure was not specified in the release.

Formfunction’s head of community and marketing, known as “Magellan,” tweeted on March 15 that the cofounders and crew will “pivot to a new direction, presumably outside of the crypto [and] SOL arena,” but did not elaborate. Cointelegraph reached out to Formfunction’s cofounders, Matt Lim and Katherine Liu, for comment but did not receive an instant response.

The marketplace will close on Feb. 3, 2022, just over a year after it launched. Despite a “brutal bear market,” Magellan reported $5 million in sales over that time period.

In March 2022, the platform raised a $4.7 million seed round led by venture capital (VC) firm Variant Fund, with participation from other VC firms Solana Ventures, Canonical Crypto, Pear VC, Palm Tree Team Crypto, and OpenSea Ventures.

Following the debut of Formfunctions, the whole Solana NFT space has declined in terms of volume and floor costs, as has the price of SOL. According to statistics from Solana NFT data aggregator SolanaFloor, its index of “blue chip” NFTs on the blockchain has seen a 75% price drop in dollar terms since early February 2022.

Throughout the last year, the daily number of buyers of Solana NFTs has likewise decreased. According to CryptoSlam data, daily unique buyers are currently hovering around 7,000, which is nearly half the quantity observed on average at the start of 2022.

Since the launch of Formfunction, the price of SOL has also plummeted. SOL was trading at $100 at the start of 2022; it has now dropped more than 80% and is currently trading about $19 at the time of writing. SOL’s price suffered a big hit when FTX collapsed in November 2022 and has failed to recoup traction since. Sam Bankman-Fried, the founder of FTX, was an early investor in the Solana blockchain.

Prominent NFT collections that were originally native to Solana appear to be exiting the platform as well.

DeGods and y00ts, two top-performing Solana NFT projects, revealed in December last year that they were bridging to Ethereum and Polygon to “explore new prospects” and allow for the collections’ ongoing expansion.