Last March, when the NFT market was booming, Solana NFT marketplace Formfunction revealed that it had raised more than $5 million in a funding round in which OpenSea and other prominent crypto venture capitalists participated. However, the marketplace announced plans to cease operations yesterday.
Formfunction Fails to Disclose Reasons for Closure
In a blog post, the company disclosed that it would shut down its NFT trading platform at the end of this month. The founders, however, did not offer further details in regard to what fueled the decision.
Formfunction highlighted its achievements during the time it has been operational, including helping creators earn income through the platform. In addition, the marketplace’s founders said they were grateful for the love they have received from the crypto community, but due to unavoidable circumstances, they could not continue operating Formfunction.
When Formfunction began its operations, the wider NFT market was generating billions of dollars in monthly trading volume, with blue chip projects like Mutant Apes and Bored Ape Yacht Club posting price increases almost daily. However, the market has since shifted drastically.
A Closer Look at NFT Market
Since May last year, most NFT projects have recorded drops in trading volumes and prices. Data from DappRadar shows the total monthly trading volumes of the entire NFT market have been below $1 billion from last July to January.
But the sales increased again in February as the market posted $2 billion in trading volume. However, CryptoSlam considers the extra figures as wash trades from traders on Blur that were flipping their assets back and forth last month to increase their chances of earning more rewards.
Generally, there is little organic trading volume happening in the NFT market at the moment. In other words, it is a difficult period to run an NFT marketplace. But it is still unclear why Formfunction has decided to close down now.
Just three months ago, Formfunction bragged about having the third-biggest weekly trading volume among all Solana NFT marketplaces. At the time, the platform claimed to have generated $490,000 or 34,200 SOL in sales that particular week.