Formfunction, a Solana (SOL)-based non-fungible token (NFT) marketplace, has announced it will be closing shop after only 13 months of operation due to declining Solana NFT prices and trading volume.
On March 15, Formfunction announced a "shutdown" on March 29, saying it was "unable to continue operating." It said the decision was taken after "substantial discussion and careful consideration".
The announcement did not disclose the specific reasons for closing the platform. Formfunction’s head of community and marketing, alias “Magellan,” tweeted on March 15 that the co-founders and team would be “moving in a new direction, possibly outside of the crypto [and the] SOL space,” but no Provide more details.
The market closed after its launch on February 3, 2022, more than a year ago. According to Magellan, despite a "brutal bear market," it has brought in $5 million in sales during that time.
Shortly after launch, the platform also raised a $4.7 million seed round in March 2022, led by venture capital (VC) firm Variant Fund, with additional venture capital firms Solana Ventures, Canonical Crypto, Pear VC, Palm Tree Crew Crypto and OpenSea Ventures also provided funding. Since the launch of Formfunctions, the broader Solana NFT space has plummeted in terms of volume and reserve price, while the price of SOL has also dropped.
Since the beginning of February 2022, the dollar price of its index of “blue chip” NFTs on the blockchain has fallen by 75%, according to SolanaFloor, a Solana NFT data aggregator. The number of daily buyers for Solana NFTs has also slowed over the past 12 months. Daily unique buyers are currently hovering around 7,000, almost half the average number in early 2022, according to CryptoSlam.
The price of SOL has also dropped since the launch of Formfunction. At the start of 2022, SOL was trading around $100; at the time of writing, it was trading around $19, down over 80%. The price of SOL was hit hard in the November 2022 crash of FTX and has struggled to regain traction since then. FTX founder Sam Bankman-Fried was an early investor in the Solana blockchain. The well-known series of NFTs native to Solana also appear to have abandoned the platform.
Last December, DeGods and y00ts two of the top-performing Solana NFT projects announced they were bridging to Ethereum and Polygon to “explore new opportunities” and allow for continued growth of the collection.
