Sorare, that NFT fantasy sports platform we’ve all heard about, is moving over to Solana. They are calling it an upgrade rather than a replacement, and they’re starting it off in early October. Their goal is to create an open and on-chain sports platform with a focus on speed, liquidity, and utility. Sounds good, right? They plan to reissue all current cards as Solana NFTs by the end of October.
What’s the catch? Well, all existing ETH balances will move to Solana's ecosystem. Multi-chain payment options are becoming a thing, so get ready to use ETH, SOL, and stablecoins. You can manage your assets through Phantom Wallet and do some trading on marketplaces like Magic Eden.
This move makes a lot of sense when you look at how other projects are migrating as well. Helium and DeGods are two other examples of projects looking for more efficient solutions.
What Are the Impacts of This Move?
The impact on Ethereum’s NFT dominance will be huge, no doubt. Solana is able to handle a lot more traffic than Ethereum, with up to 65,000 transactions per second. Plus, each transaction will cost you about $0.00025. That means Sorare can engage users more and operate more efficiently. This could pull users away from Ethereum, which is already congested and costly.
Also, Sorare is connecting its NFTs to a larger ecosystem, which supports payments and trades on other marketplaces. So yeah, this could mean a market share shift as well. In late 2023, Solana's NFT market share was already between 22% to 39% of total trading volume. Sorare's migration could speed this up. The growing institutional interest in Solana, like the launch of the REX-Osprey Solana + Staking ETF, is making this shift more appealing. Other fintech startups might follow suit.
What About the Regulatory Side?
And here’s where it gets interesting: Sorare’s move to Solana raises some serious regulatory compliance issues, particularly with the UK Gambling Act 2005. They are being accused of providing unlicensed gambling services, which could really set the tone for how regulators treat Web3 businesses worldwide. Sorare claims its platform is based on skill, not gambling, but the lines are blurred between gaming, speculation, and digital assets.
If found guilty, Sorare might have to obtain gambling licenses and change its business model, which means higher operational costs and more regulatory scrutiny. This case could be a game changer for how regulators deal with crypto-powered fantasy sports and NFT marketplaces.
What's the Takeaway for Other Startups?
Sorare's migration to Solana is a great case study for other fintech startups. If it works for them, it could inspire moves within the Asian fintech landscape – especially since Solana's expanding its reach in the region. Startups can see how Sorare is enhancing user engagement through better speed and liquidity, while also realizing the importance of regulatory compliance.
The multi-chain payments part cannot be overlooked. It offers a larger audience but also more security risks. Cross-chain bridges are often hacked, and managing assets on multiple chains can confuse users. They might not have the native tokens for gas on certain chains, leading to higher fees or waiting times.
While multi-chain payments open up new markets and models, they also come with added risks and regulatory challenges. Sorare’s experience can guide other startups in crafting more robust and user-friendly platforms.
