Key Takeaways
- Ethereum’s NFT dominance is on the cusp of facing a significant threat from Solana.
- Solana’s faster transaction speed is rapidly making it a favorite NFT minting and trading destination.
- Ethereum still has a chance to retain dominance.
Ethereum holds a place of importance in the cryptocurrency space as it is the second-largest crypto asset by market capitalization and has gained a lot of traction. It currently boasts of holding the largest share of the non-fungible token (NFT) market as well as the decentralized finance (DeFi) market.
But with continued scalability issues that face Ethereum, there is constant speculation that one of the more aggressive blockchain infrastructure networks on the market may overtake it. One name that comes up in the discussions is Solana, which began supporting NFTs this year and is fast becoming a top choice for minting and trading digital collectibles.
Is the future of NFTs on Ethereum or Solana?
The question of where the future of the NFT market lies is a bemusing one. While one cannot tell what will play out in the market, there are strong indications that Solana is one viable competitor among others to Ethereum when it comes to NFT dominance.
Solana has been consolidating itself as a powerful alternative to Ethereum. One key reason for this is that the Solana network seems to have already arrived at where Ethereum is hoping to reach with its migration to proof-of-stake. Solana has a higher transaction per second rate than Ethereum, is cheaper fee-wise, and is more environmentally friendly than Ethereum. Another consideration that gives Solana an edge over Ethereum is the fact that in 2021, Solana’s ecosystem has been expanding faster than that of Ethereum even as more developers come to consider Solana to be easier to program.
With these features, it is no surprise that NFTs have gained massive traction on the Solana network. NFTs traded on marketplaces on the Solana blockchain have rapidly crossed $1 billion according to data from DappRadar. Solana is also crushing it in NFT gaming at the moment as it has seen several venture capital investments aimed at boosting the play-to-earn gaming model.
However, Solana still has a long way to go before it can match the status of Ethereum or flip it for NFT dominance. The fact remains that the biggest NFT projects are still based on the Ethereum network. Ethereum is also working on its migration to ETH 2.0 which may see it again be able to compete viably in terms of transaction speed and cost.
In 2021, the NFT space experienced a lot of expansion, having gained over $23 billion in trades according to DappRadar’s 2021 industry report. The value of the top 100 NFT projects is also now estimated to be at $16.7 billion. The market is poised for massive growth in 2022 as NFTs see more adoption.
