How Solana and Cardano Are Paving New avenues For NFT Growth
With strong competition from networks like Solana and Cardano, will Ethereum’s dominance over NFTs hold much longer?
Key Points:
Digital Ownership has not been a term people have been familiar with for a long time, until this year this topic was not covered by major media outlets. The public has grown to be very interested in NFTs, in the third quarter of 2021 there was more than $10 billion in NFT trading volume. A huge bump from the $1.2 billion reported in quarter 2.
NFTs can be thought of in similarity to snowflakes, there is no two the same or in other words they are all unique. Nonfungible tokens have displayed use cases in industries like art, digital collectibles, to real estate and other physical assets.
According to Jonathan Choi, chief investment officer at Metaplex — the Solana protocol that set up open standards for on-chain digital asset issuance and ownership — that while NFTs are gaining traction among mainstream audiences for profile pictures, artwork and collectibles, the technology behind NFTs is much more meaningful.
“NFTs can serve a much broader range of use cases, including representing ownership of physical assets such as real estate, loans, luxury items and other digital assets such as audio, files, degrees or certificates,” he told Cointelegraph.
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Beyond ETHs dominance
Ethereum’s role in the NFT industry’s In fact, it was arguably the now-iconic ERC-721 token standard that kick-started the NFT revolution in the first place. CryptoKitties launched nearly half a decade ago, and while the platform was wildly popular at launch, perhaps it hadn't fully considered the limitations blockchains posed at the time.
Network congestion and the unpredictable, sometimes absurdly, high gas fees turned a lot of players away from the NFT space, but this is no longer the case. Outfits like Axie Infinity and Decentraland are pushing the NFT and GameFi narratives further than ever before. However, with an indefinite roadmap for the Ethereum 2.0 upgrade and its scalability updates, not all projects are convinced it’s the best place to set up shop.
In particular, networks like Cardano and Solana are making inroads into the realm of NFTs, with Solana even launching a $5 million fund this year to onboard creators and their fans into its ecosystem. Solanart, the most popular NFT platform on the Solana blockchain, is making waves with users in the space, producing collections like the Degenerate Ape Academy, SolPunks, Aurory and more, with hundreds of millions of dollars trading hands.
Layer-one blockchains like Solana and Cardano offer an alternative to the high transaction costs plaguing the Ethereum network while also lowering entry barriers for a broader audience. These platforms are also incredibly well-positioned among developers building on Web3 since factors like cost, speed and community growth are vital during development stages, especially for newer projects.
“NFTs are like golf club membership compared to cryptocurrencies, which are more like liquid cash,” Abhitej Singh, co-founder of Cosmos-based DeFi platform Persistence, told Cointelegraph. According to him, becoming a golf club member is subject to all kinds of factors including early membership, exclusivity, community and other elements that liquid cash alone cannot provide.
“The scarcity and the exclusivity results in high membership cost both socially and economically for new members,” he added.