When it comes to Non Fungible Tokens (NFTs), Ethereum is the natural choice of the investors and has 95% of all the NFT marketplace on its blockchain. But the emerging Solana with its smart contract, unique functionality and technology is pacing up, in spite of being new in the game. We take stock of the distinctiveness of the Solana and Ethereum NFTs. Let’s begin with the Ethereum NFT marketplace and its advantageous features.
Ethereum dominates the market overwhelmingly in terms of buyers and sellers and trading. This is evident from data by CryptoSlam, a website that provides NFT collection rankings by sales volume :
* In the past 30 days before March 27, Ethereum generated an extremely high trading volume of over $1.8 billion in the last 30 days, in comparison to $120 million from Solana-based marketplaces.
* The average NFT sale price in Ethereum in the Q4 of 2021 was approximately $3,000 compared to Solana’s $1,000.
What makes NFTs on Ethereum blockchain much sought after ?
Ethereum blockchain rules the DeFi world and has majority of NFT projects running on it as ERC-721 tokens.
* This is because of its data architecture and highly-secure network.
* The blockchain gives NFTs high exposure to a huge and potential market.
* Ethereum NFTs are thus sold on average for a much higher price.
* However, the heightened sale on the Ethereum network also limits it in certain ways :
– The network traffic leads to a major transaction backlog.
– This further results in a huge increase in transaction fees, making it expensive for many users wanting to mint NFTs.
* Some popular examples of Ethereum-based NFT marketplaces are OpenSea, Rarible, Nifty Gateway.
* The most popular NFT collections in the Ethereum blockchain include CryptoPunks, the Bored Ape Yacht Club (BAYC), Yacht Club (MAYC).
These limitations of Ethereum blockchain have shifted NFT makers to relying on other options that address these issues. Here comes Solana the blockchain that has an edge over Ethereum NFTs in these ways:
* Solana’s utilisation of Proof-of-History consensus mechanism guarantees high throughput of more than 60,000 transactions per second (TPS).
– The Solana also has lower transaction costs at less than a dollar.
– This PoS also reduces the technical glitches to a great extent as well.
* Solana ensures cheaper and faster minting of NFTs.
– The royalties in Solana-based NFT markets are also generally higher compared to Ethereum-based ones once the NFTs arrive in the secondary market.
* These qualities have made Solana an attractive NFT marketplace, which is fastly gaining a user base, more so since the Q3 of 2022 according to CryptoSlam data.
– This is evident by the NFT sales volume in the Solana which was over $1 billion by the end of January, 2022.
* One of the most popular Solana NFT collections are Degenerate Ape Academy, a collection of 10,000 unique NFT Apes that were sold for over $2 million.
The downsides of Solana NFTs :
* The high congestion in Solana has led to network outages in the recent past due to denial of service attacks which closes down a machine or network, and makes it inaccessible to its intended users.
* This has led several users to liquidate their positions being unable to pay the loans.
* The Solana network is less secure and offers less exposure.
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