The association of “digital ownership” to virtually anything is experiencing a hike in adoption as the exploding tokenization of securities and valuables happens each day. Although the concept and existence of non-fungible tokens (NFTs) have been in place, they didn’t gain popularity until last year. The Q3 of 2021 came with more than $10,000,000,000 NFT trading happening across different blockchains.
NFTs are digital assets that are associated with unique ownership for different virtual and physical assets. This ownership proof extends from arts and virtual collectibles to physical assets such as real estate. This results in a significant change in the concepts of ownership across different industries. Likewise, this innovation is creating a new standard while presenting offers associated with digital assets.
But Solana (SOL) is coming to the stage to shake up the participation and adoption of technology driving NFTs in the marketplace. This is primarily changing issuance and ownership. Alongside, a proposition states that NFT adoption can occur for various use cases as deemed fit. But Solana and Cardano (ADA) may shake up the marketplace as blockchain networks are used more than others.
Understandably, the Ethereum network is the most active blockchain network used to launch NFT-based projects. It is the widely used network in the decentralized finance (DeFi) industry because of the enabled smart contracts on the main network. And yes, there is a need for NFT sellers to interact with an audience to drive sales. And Ethereum has this existing already.
Transcending over Ethereum’s Dominance
The Ethereum network has been pivotal in the growth of NFTs over the years. Ethereum’s significance transcends beyond being a common hosting platform. One prominent feature that made this possible was the ERC-271 token standard. This enabled the successful revolution of NFTs in the crypto space.
An instance is the launch of CryptoKitties about ten years ago. But the team behind the project didn’t consider the limitations associated with using the blockchain at that time. Moreover, there were a few blockchains available, and not all could support their project concept. But now, those limitations are critically considered with NFT’s growth.
Parts of the limitations that held some players back from participating in the NFT space are the congestion that happens on the network and the indiscriminately high gas fees. But these limits are eliminated with the presence of projects such as Axie Infinity and Decetraland. These two outfits are changing the narratives of NFTs and GameFi.
But the possible scalability feature accompanying the Ethereum 2.0 upgrade is creating an impression that it may not be the best place to establish a digital shop. Due to the constraints and high gas fees associated with Ethereum, CryptoKitties moved their project to Flow blockchain, an in-house blockchain created to host its NFT project.
But this departure may force other projects to move to other networks that present solutions to the limitations of Ethereum. However, Ethereum will keep being the primary chain to launch NFTs because of its active crypto communities. But its limits are coming off as challenges for vast audiences, and developers might have to seek other efficient blockchain networks down the road.
The two most prominent networks that are becoming fierce competitors for the Ethereum blockchain when it comes to the NFT market are the Cardano and Solana blockchain networks. These two platforms are creating a new movement in the NFT industry and are onboarding creators while migrating their audiences to the ecosystem.
There are lots of potentials attached to NFTs, and the exploration process is just gaining momentum. Creators and participants are leveraging various implementation processes to leverage the potentials of NFTs across industries. An instance is the validation of transactions between two parties in the decentralized finance (DeFi) space. This makes those transactions unique and resistant to alterations.
Another instance is how NFTs can be technically used in the blockchain ecosystems to control who has access to some assets and utilities on public blockchain networks. Likewise, maximizing to protect the rights of individual and group property is possible.
Despite Cardano not striving to dive fully into the NFT industry, it is making waves. We witnessed this with its first NFT sales that recorded over one million US dollars in revenue. This success depended mainly on the Alonzo hard fork that incorporated smart contracts onto the network.
Although users could mint NFTs before making Alonzo go live, its launch saw more users registered on the platform. As a result, there exist an increasing interest in NFTs on the Cardano blockchain network. Likewise, there is a defined NFT metadata used as standards for the platform’s native tokens.
This development is creating competition for Ethereum because the identity case is solved. Likewise, authentication and governance of NFTs are becoming easier for the users. This is an exclusive offer for the NFT community, and Ethereum should expect its dominance to face platform challenges.
Embryonic but Creating Waves and Changing the Narratives
Cardano and Solana are becoming the best alternative for launching NFT projects because they offer creators low-cost network fees and reduce the requirements for a project to gain entry to reach a broader audience. Also, these two platforms strategically position themselves for Web 3.0 incorporation because of their cost, community growth, and speed of transactions that are important for new projects.
Another advantage is the interoperability the blockchain networks are incorporating into their networks. As a result, projects can launch on different platforms and build a bridge to tap into the Ethereum network and maximize a large number of users available on the platform. But there is a need to optimize the development efforts reaching the updates for the technology across industries.
While Cardano and Solana are paving ways for layer-one blockchains in the NFT marketplace, other prominent networks like Polkadot and Wax are extending the technology to a new set of audiences. The existence of these new protocols simplifies the complexity around Web 3.0. As a result, NFTs can be the best utility for blockchain technology beyond the Ethereum network.