Blockchains and NFTs

The world’s first NFT dates back to 2014, when New York artist Kevin McCoy’s animation known as Quantum was originally minted on Namecoin, a blockchain forked from Bitcoin. Quantum eventually sold for US$1.47 million at a Sotheby’s auction in June 2021, but its host blockchain is buried deep in the history of NFTs, rarely visited by today’s collectors.

Ethereum is today’s most dominant blockchain for most smart contract applications, and NFTs are no exception. The Ethereum blockchain, fueled by its NFT standard ERC-721, has handled over 72% of all NFT sales to date. A combination of high transaction fees and questions over Ethereum’s carbon footprint has, however, opened the door to a number of newer blockchains offering cheaper and more environmentally-friendly alternatives.

As of end-February 2022, Ethereum had topped a million unique buyers which is second only to Ronin, the blockchain where the US$4 billion play-to-earn powerhouse Axie Infinity lives with its 1.6 million buyers. Ronin, however, is a sidechain of Ethereum. It still uses Ethereum technology while unloading transactions to its own blockchain which runs parallel to the latter.

Axie Infinity developer Sky Mavis built Ronin after seeing Ethereum’s limitations, which became more apparent due to high network congestion as decentralized finance (DeFi) and NFTs surged in popularity. Ronin’s birth was also a signal for competing smart contracts blockchains to take a bite out of Ethereum’s dominance.

Solana is one of those competing blockchains, having risen to prominence in August 2021 when it launched Wormhole – Solana’s bridge to other DeFi ecosystems. Due to its cheaper and faster transactions, Solana has become a popular alternative for NFT collectors and game developers. The number of buyers on Solana is currently less than 25% of Ethereum’s.

With more blockchains entering the conversation, Ethereum’s dominance is no longer uniform across the statistical board. For example, Ethereum ranks third in terms of sellers with 580,000, behind Ronin’s 1.16 million and WAX’s 985,000. Both seller-leaders benefit from high transaction numbers in blockchain games.