Ethereum or Solana – which one will win the space for NFTs? Here are 5 things to consider.
The NFT market is exploding. In the third quarter of 2021, a new record of $10.7 billion in NFTs changed hands, up more than 700% from the preceding period.
Collectors and artists who want to enjoy and make money from digital art will find the space exciting. To trade or mint NFTs, you need to choose a platform. This article will compare two major NFT networks, Ethereum and Solana. Even if you don’t want to buy NFTs, you should still know about this if you are thinking about investing in crypto.
The value of the two crypto tokens is based mainly on the size and functionality of their networks. This is because the networks enable NFT trading, which makes the tokens more valuable.
NFTs are presently a major reason people utilize these networks. Simply stated, the higher the price of NFTs will be if more people use Ethereum or Solana to acquire them.
People started getting interested in NFTs in 2020. Ethereum went up 2.300% during that time. Solana had an even bigger increase. It went up 17,500% in 2021 because it is a good platform for trading NFTs.
Size – Ethereum Wins – Hands Down
You need to think about the size of the network when you are trading NFTs. That’s because the bigger the network, the more opportunity there is. Artists want to be on a platform that has lots of buyers. And buyers want to be on a platform with lots of different types of NFTs.
Almost all NFTs still trade on the Ethereum network. The primary network accounts for more than 97% of NFT sales.
Ethereum is the leader in terms of the amount of money exchanged. In February 2021, an NFT called “Every day’s – The First 5,000 Days” sold for a whopping $69.3 million.
Compared to Ethereum, Solana’s network is small. But that does not mean it is not worth looking into. For example, a Monkey Business NFT recently sold for the equivalent of $2 million. So it is clear that it has potential.
That means that people who are looking for things like art or trading can still find what they’re looking for on Solana. This is especially true if they niche down and use the particular technical advantages of the Solana network. More on that below.
Still, Solana has a lot of work to do before it can compete with Ethereum in size.
Growth – Solana Ahead
However, size is not the only factor. An intelligent trader will want to position himself in a network that is growing.
This is because growing networks are great for early adopters. While the web is getting bigger, there are less people competing. By the time it grows, early adopters will already be established in it.
Solana’s NFT ecosystem has become more popular recently because the network can process transactions quickly and efficiently. This makes it a good choice for people who want to use DeFi services. The total value locked in the network is now more than $15 billion, up from just $3.5 in September.
Of course, this includes NFTs. The most extensive collection is Degen Ape Academy, which sold about $227 million worth of ape NFTs.
Ethereum is still the most compatible blockchain network.
The most important factor to think about when comparing the networks is their technical specs and user experience. This means how well they work and how much it costs to use them.
The future of the network depends on these factors. Networks that are too large won’t be able to survive. Smaller, better networks will eventually take over.
It is important to note that the network’s ecosystem is not just the blockchain. The best user experience comes from a series of compatible apps and services that support it.
This includes wallets that are hot or cold, exchanges for tokens and NFTs, and associated services such as Bitcoin’s Lightning Network.
Ethereum seems to have more features and be more compatible than other cryptocurrencies. It is the second largest cryptocurrency by market cap, so it has a lot of support from different services.
On the other hand, Solana’s ecosystem is younger than Ether’s, but it is growing quickly. Moreover, as the fifth-largest crypto by market cap, it is not that far behind Ether.
OpenSea is the largest platform for trading NFTs. It has more stability and features than Solana’s Solanart. The latter even advertises that the site is still in the beta phase.
Ethereum users can also use the popular MetaMask wallet, which is available on most popular browsers and mobile devices. Solana’s Phantom Wallet is good, but it does not have as many features as MetaMask.
For example, Solana’s network is getting a mobile-friendly integration soon. The Phantom Wallet will be launching their mobile app in January 2022. This is because developers see how important it is for users to be engaged on mobile devices.
Blockchain Tech: Solana Is Way Ahead
However, while most of Solana’s integrations with outside systems are not as good as Ethereum’s, blockchain is where Solana shines.
The most straightforward test is the speed of transactions. Solana can handle up to 50,000 transactions per second. Ethereum can only handle about 15.
This is an important fact for user experience, because slow network speed also means that it costs more. Every blockchain network calculates fees based on how busy the network is. Ethereum can only handle 15 transactions per second, so it quickly becomes congested.
This is because the cost of using the Ethereum network is high. This is especially true because of the ‘NFT craze’. Right now, the average transaction fee on Ethereum is about $15. On the other hand, using Solana costs only $0.00001.
The fees for selling NFTs are even higher than for other types of transactions. This is because the process is more complex. One estimate says that the average Opensea transaction costs $151.93 on each side of the trade. That’s in addition to the $30 to $40 it takes to transfer the money from one wallet
This does not mean that low gas prices are good for everyone. High costs make it harder for aspiring artists to break into the space. They benefit established artists that already have a large following. Reduced competition and high fees also increase the perceived value of NFTs.
However, for most buyers and artists, lower gas prices are an advantage.
The quality of a network is not only determined by its cost. It is also determined by what the network can do.
Functionality and Versatility
At the moment, artists have more freedom to create things using NFTs on Solana. This is because Ethereum has technical limitations that Solana does not.
For example, the Ethereum CryptoKitties game allows users to breed their own. However, the game quickly ran into issues due to Ethereum’s slow speed. As a result, users trying to buy CryptoKitties caused a vast congestion issue.
Fast speeds and low costs allow artists to create things that would be too expensive to make on Ethereum. That’s why Solana is becoming a hub for 3D NFTs.
Another question to consider is the transferability of NFTs. Usually, NFTs are specific to certain networks and cannot be transferred to other networks. Artists typically create images that are used on just one website. Most traders consider unlicensed copies to be fakes, which means they usually do not sell for much money.
There is a workaround for this in the form of a Wormhole NFT Bridge. A wormhole port allows users to transfer their digital assets from one network to another.
But there’s a catch: the Wormhole doesn’t transfer assets. Instead, it freezes an NFT on one network. At the same time, it mints an identical NFT on the other network. Aside from obvious copyright issues, traders could ask why not stamp the NFT on the other web.
Solana is likely to benefit from this development. That is because it costs less money to mint NFTs on Solana than Ethereum. There is also the issue that some NFTs are too expensive to create on Ethereum. It is unlikely that many traders would want to transfer their Solana 3D NFTs and NFT games.
Verdict – Solana Ahead
Some people say that Ethereum developers will fix a lot of the problems with Ethereum 2.0. But this doesn’t change the fact that Solana is ahead in terms of technology.