Formfunction, a Solana (SOL)-based, nonfungible token (NFT) marketplace, has announced it is closing up shop after only 13 months of operation amid a slump in Solana NFT prices and trading volumes.
On March 15, Formfunction announced it was “shutting down” on March 29, saying it “cannot continue to operate.” The decision was reached after “much discussion and careful consideration, it said.
We have some sad news to share today—Formfunction is shutting down on Wednesday, March 29th.
This was an extremely difficult decision; however, after much discussion and careful consideration, we’ve come to the conclusion that we cannot continue to operate Formfunction.
— Formfunction (@formfunction) March 15, 2023
The exact reason for closing the platform was not disclosed in the announcement.
Formfunction’s head of community and marketing, known by their pseudonym “Magellan,” tweeted on March 15 that the cofounders and the team will “pivot to a new direction, likely outside of the crypto [and the] SOL space,” but did not provide further details.
It is with deep sadness to say that @formfunction is being sunset and closed down as the cofounders and team pivot to a new direction, likely outside of the crypto & SOL space.
A thread with a personal statement & reflections 1/n👇🧵
— Magellan◎☀️ (@CryptoMagellan) March 15, 2023
The marketplace’s shutdown comes after its launch just over a year ago, on Feb. 3, 2022. According to Magellan, over that time it conducted $5 million in sales despite a “brutal bear market.”
Shortly after its launch the platform also raised a $4.7 million seed round in March 2022 led by venture capital (VC) firm Variant Fund and contributions from other VC firms Solana Ventures, Canonical Crypto, Pear VC, Palm Tree Crew Crypto and OpenSea Ventures.
Since Formfunctions launch, the wider Solana NFT space has plummeted in terms of volume and floor prices alongside a drawdown in the price of SOL.
Figures from Solana NFT data aggregator SolanaFloor show its index of the “blue chip” NFTs on the blockchain saw a 75% price drawdown in dollar terms since early February 2022.
The daily number of buyers of Solana NFTs has also seen a slowdown over the past 12 months. According to data from CryptoSlam, daily unique buyers currently hover around 7,000, almost half the amount seen on average at the start of 2022.
SOL’s price has also tanked since Formfunction’s launch. At the start of 2022, SOL traded at around $100; it has now fallen over 80%, at time of writing trading around $19.
The price of SOL took a significant hit in the November 2022 collapse of FTX and has struggled to regain traction since. FTX founder Sam Bankman-Fried was an early investor in the Solana blockchain.
Notable NFT collections first native to Solana are seemingly abandoning the platform also.
In December last year, DeGods and y00ts — two top-performing Solana NFT projects — announced they were bridging to Ethereum and Polygon to “explore new opportunities” and to allow for the continued growth of the collections.