Ethereum Still Dominates NFT Landscape But Solana, Polygon Growing

Ethereum (ETH)

If you’re new to NFTs, ETH is probably the NFT environment where you’ve already started, or plan to start. The ETH network gave NFTs a good place to start due to smart contracts and the ease of which an ERC-721 token can be minted  The downside to this of course, is ETH’s nasty gas fees. Not only that, but because Ethereum is currently proof of work, it uses a lot of electricity. If Ethereum 2.0 launches successfully, it will alleviate many of these issues.

High value projects that you may have heard of before such as the Bored Ape Yacht Club and CryptoPunks are ETH NFTs. As are the vast majority of NFTs currently on the market. However, given concerns about ETH’s impact on the environment and the very high fees for minting NFTs on ETH to begin with, folks are beginning to look elsewhere.

Polygon (MATIC)

Polygon is technically not its own independent blockchain. It’s a layer 2 sidechain built that works with Ethereum. Transactions on Polygon are paid in MATIC. Polygon’s biggest strengths are it’s transaction speeds and low fees, roughly a penny in value. Due to it being an Ethereum sidechain, it is easy for Ethereum projects, such as AAVE, to instead use Polygon as their settlement layer, ensuring lower fees and faster transactions. In this same manner, NFT marketplaces can choose to use Polygon’s network for their users’ transactions. Users of OpenSea for example, can use Ethereum, or Polygon networks to buy and sell NFTs. It’s simply a matter of which network the token has been set for sale on.

While there are Polygon-specific NFT projects, all Ethereum-based NFT projects also exist on Polygon, they simply need to be bridged across from one chain to the other. Polygon is likely to become more popular as an NFT platform until Ethereum is able to solve its network fee issues.

Solana (SOL)

Launching in 2020, Solana is a fully independent layer 1 blockchain that does not require you to use Ethereum. Solana also uses a different method of achieving consensus than ETH’s proof-of-work. Instead, Solana reaches consensus through proof-of-history, and checks the timestamp when a transaction occurred between units. This system allows Solana to process a block every 400 milliseconds and an impressive 60,000 transactions per second. Because of this speed, Solana transactions are very cheap making the network attractive for NFT projects.

Some creators are getting pretty creative with Solana’s network. The marketplace, Neon, allows users to purchase NFTs out of a vending machine. A physical experience with NFTs might encourage future purchases.

World Asset eXchange (WAX)

One of the newer blockchains, WAX, was built specifically for NFTs. Not only that, but Amazon recently acquired sports fractioning platform, Dibbs, which is built on WAX. The neat thing about WAX is that it carries things most people have heard of before, or that you enjoyed when you were younger. Including but not limited to an NFT which can be redeemed for a unique TMNT funko-pop, Hot Wheels NFTs, baseball cards, and so on. The gaming industry is attaching itself to WAX as well. Users playing Street Fighter can upload their best matches as NFTs.

In addition to partnership alongside major brands, WAX is also very beginner friendly and has a number of tutorial options to educate you on using the platform. Finally, WAX is a certified carbon neutral blockchain.

Cosmos, Cardano and Polkadot NFTs Incoming

There are plenty more NFT ecosystems on the way with projects like Cosmos, Cardano and Polkadot all launching (or have already launched) support for NFTs.

Some of the networks are experimenting with community-owned NFT marketplaces to compete with OpenSea.

Meanwhile many of the exchanges including Coinbase, Kraken and Binance also have NFT marketplaces in the works, which will make buying NFTs an even more streamlined experience.

Conclusions: Non-ETH NFTs Are Great for Beginners

So the conclusions we can draw from the above NFT ecosystems are that if you want to get started in the NFT world, then you probably want to stay away from ETH, or be prepared to spend a lot of cash if you are. If you do want to use the Ethereum network, and if you want to spare yourself the horrific gas fees then you should probably make use of the Polygon network.

As alternatives to Ethereum’s strong control over NFT markets emerge, we can expect to see continued losses in market share of Ethereum NFTs. If Ethereum can solve its issues before then, it will remain the number one place for NFTs.