The world of non-fungible tokens (NFT) continued down a difficult path this week and this is reflected in the main facts of this summary. Although the days were dominated by negative news, there is also room for optimism. In the latter case, the rise of some Solana protocols stands out, which show considerable momentum. However, the negative elements were at the top of the information. When it comes to bad things for sectors linked to the crypto market, the SEC and its boss, Gary Gensler, could not be missing. The official continues to present himself as the villain of the movies against the companies and projects in the sector. This time, the agency cracked down on a second NFT project.
If you want to know details of all these cases, we invite you to continue reading this news summary.
The SEC attacked the NFT sector this week
Among the notable news in our summary this week, a new attack by the SEC against the NFT sector stands out. The Securities and Exchange Commission has taken aim at Stoner Cats 2 LLC (SC2), the company behind the animated series ‘Stoner Cats.’ The accusation was the classic “unregistered offering of securities.” SC2 raised approximately $8 million by selling Stoner Cats NFTs, promoting them as an investment with resale potential on the secondary market. The Stoner Cats project was directed by actress Mila Kunis and featured a roster of celebrities. According to the SEC, SC2 violated the Securities Act of 1933 by offering and selling these cryptoasset securities in an unregistered offering. SC2 has agreed to a cease and desist order, a $1 million civil fine, and the destruction of all NFTs in its possession. A Fair fund will also be established to return money to harmed investors. However, SEC commissioners Hester Peirce and Mark Uyeda argued that SC2’s activity constitutes fan crowdfunding. This implies that applying securities laws rigidly to NFTs could stifle artists’ creativity. Thus, this week the SEC once again becomes the executioner of NFTs and that is why it appears as the highlight of this summary.
Major platforms abandoned recurring commissions for creators
Recently, the abandonment of recurring commissions for creators on the OpenSea platform was made official. Behind this was growing competition from Blur, a free platform that gained market share by not charging platform processing fees. Total NFT trading volume has decreased significantly in 2022, and OpenSea has lost market share. Without guaranteed royalties, artists may further lose interest in NFTs. The latter could be the icing on the cake in a market that is going through an extremely delicate moment. Prices for digital art linked to the blockchain are declining dramatically. However, removing royalties also raises regulatory concerns and may impact smaller artists. Blur’s emergence was a devastating blow to what seemed like OpenSea’s stranglehold. Although the first of these platforms has only been on the market for a short time, that did not prevent it from becoming the main contender. In that sense, OpenSea is now forced to follow in the footsteps of its opponent so as not to be left behind. The side effect of this, as Forbes relates in a recent work, is that the artists’ dream of independence seems to be diluted. This week, as this summary shows, a continuation of the decline in interest in the NFT market was evident.
Solana NFT Market Outperforms Entire Sector on Ethereum
The Solana NFT marketplace is gaining traction and has almost as many day traders as all Ethereum-based NFT platforms. This is due to the unique synergy between Solana’s cost-effective and easy-to-use blockchain and the appeal of NFTs. But the most notable aspect of all this is at the bearish moment that the sector gains momentum in Solana. It should not be lost sight of that the convenience of this network for trading is not just a theory. In fact, speed and low costs are a factor that makes the difference in a time of ebb like the current one. In that sense, the TVL of Solana DeFi is rising rapidly, which creates a strong base for NFTs. Ethereum has its strengths and its NFT markets are far from obsolete. However, the rapid rise of the Solana NFT platform is a wake-up call. This is a reminder that the digital currency market is constantly evolving. This becomes one of the biggest news this week in the world of NFTs.
