Things could get a lot more interesting for Solana [SOL] and its NFTs soon. This is due to a recent announcement from Metaplex, its NFT platform. The latter announced a new upgrade that will allow royalties to be enforced.
Because of the Metaplex announcement, Solana may become more appealing to NFT creators in 2023. Every time an NFT created finds a new buyer, NFT creators can earn a portion of the profits. Metaplex intends to implement the same feature for Solana NFTs.
The upgrade will be available to NFT creators on January 6th, according to the announcement. This will enable them to implement royalties and optional rule sets for their royalties.
One potential advantage of this change is that it will allow creators to earn more money from their NFTs. This move may also persuade more creators to use the Solana blockchain as their preferred network for deploying NFTs.
If the above occurs, we may see an increase in NFT trade volumes in 2023. The bearish market conditions had a significant impact on Solana’s NFT trade volumes.
Zooming in on its December performance reveals a slight increase in the last five days of the month.
It remains to be seen whether this move has an impact on Solana NFT trade volumes, but it should in theory.
The same is true for the effect on SOL’s demand. In that regard, SOL has put in a lacklustre performance over the last six weeks. Price volatility has decreased, but what can investors expect in 2023?
Solana saw an increase in social volume near the end of December. As social volume increases, SOL may be exposed to increased visibility.
The timing of this social volume surge is also noteworthy. It happened around the same time that SOL entered oversold territory.
SOL’s price action has so far struggled to break out of oversold territory, implying that existing demand was insufficient to support a significant pivot.
According to the Money Flow Index, there is a surge in money inflows (MFI). Perhaps this accumulation has dampened the previous bearish momentum. If SOL can attract significant bullish volumes in the coming days, we may see a small uptick.
Fortunately, there are already indications that SOL demand is improving. Both the Binance and DYDX funding rates fell sharply at the end of December.
Nonetheless, there has been a significant increase in the last 24 hours.
Furthermore, the above chart showed that demand in the derivatives market was recovering as investors took advantage of the discount.
SOL investors should be on the lookout for indicators of a resurgence in spot demand and bullish volumes.
