How Solana and Cardano pave the way for NFT growth

The term “digital ownership” has only recently become meaningful. Although non-fungible tokens (NFT) have been around for some time, they have attracted the attention of mainstream media in the past year or two. In the third quarter of 2021 alone, cross-blockchain NFT transactions exceeded US$10 billion, a significant increase from the US$1.2 billion in the second quarter.

NFT is a unique digital asset that represents ownership. As proof of ownership, NFT extends from artworks and digital collections to real estate and other physical assets. This has caused structural changes in a wide range of industries, improved the efficiency of ownership transfers, and opened up new horizons in what digital assets can provide.

According to Jonathan Choi, Chief Investment Officer of Metaplex-the Solana protocol establishes an open standard for the issuance and ownership of digital assets on the chain-although NFT is attracting mainstream audience profile pictures, artworks and collectibles, the technology behind NFT more meaningful.

“NFT can serve a wider range of use cases, including representing the ownership of physical assets such as real estate, loans, luxury goods, and other digital assets such as audio, documents, degrees or certificates,” he told Cointelegraph.

Like most platforms in the decentralized finance (DeFi) field, most NFT-based projects are built on the Ethereum blockchain-this is understandable. Ethereum is the world’s longest-running active blockchain with smart contracts. Most importantly, NFT sellers need viewers.

related: Solana surpasses Cardano and Tether to become the fourth largest cryptocurrency, worth $76B

Beyond the dominance of Ethereum

However, the role of Ethereum in the growth of the NFT industry is far greater than that of a pure custody platform. In fact, it can be said that the now iconic ERC-721 token standard first started the NFT revolution. CryptoKitties was launched nearly five years ago. Although the platform was very popular at the time of its launch, it may not have fully considered the limitations of the blockchain at that time.

Network congestion and unpredictable and sometimes absurdly high gas bills have kept many players away from the NFT field, but this is no longer the case. Clothing like Axie Infinity and Decentraland is pushing the development of NFT and GameFi further than ever. However, due to the uncertain roadmap of the Ethereum 2.0 upgrade and its scalability update, not all projects believe that it is the best place to open a shop.

CryptoKitties itself announced the switch to their internal Flow blockchain, citing the limited throughput and high fees of Ethereum. Although the platform is no longer its former NFT giant, it is an iconic brand in the field, and its separation from Ethereum may transfer more projects to other networks.

Choi added: “Ethereum will always be the primary chain for launching NFTs and has one of the most dynamic communities in the crypto space, but due to some of its limitations, a wider audience and developers will still face challenges and concerns. “

In particular, networks like Cardano and Solana are entering the NFT field. Solana even launched a $5 million fund this year to introduce creators and their fans into its ecosystem. Solanart, the most popular NFT platform on the Solana blockchain, is making waves among users in this field, producing series such as Degenerate Ape Academy, SolPunks, and Aurory, with a transaction volume of hundreds of millions of dollars.

Frederik Gregaard, CEO of the Cardano Foundation, told Cointelegraph, “NFT has such great potential, and now we are exploring what may happen, for example, in decentralized finance, NFT can be used to achieve security” to ensure that the only transaction The correctness of each order submitted and the mechanism to prevent preemptive attacks. “

He also mentioned other technology use cases in the blockchain ecosystem, including its use as an access control mechanism for utilities and assets on public blockchains, and the ability to ensure the uniqueness of eUTXO decentralized applications (DApps). “Outside the immediate ecosystem, NFT has the potential for mass adoption when it comes to the property rights of individuals and communities,” he added.

Although Cardano has not ventured into NFT as boldly as Solana, it is making progress. Following the Alonzo hard fork that successfully enabled smart contracts on the network, CardanoKidz was launched this year as the first NFT project on Cardano. Just last month, SpaceBudZ managed to make its first NFT sale on the Internet for more than $1 million.

Before the smart contract goes online, users can still mint and sell NFTs without the contract address, although attributes such as metadata cannot be transmitted through the blockchain. The addition of smart contracts has attracted more users to the platform, which has caused a surge of interest in Cardano NFT. However, after the introduction of Cardano Improvement Proposal 25, the blockchain now defines the NFT metadata standard for its native token.

This will solve various problems related to the identity, authentication and governance of NFTs on the network. Once ownership is transferred, the previous representation of the NFT can also be destroyed, thus adding a whole new level of exclusivity. Since a lot of work has been done on these platforms to compete with Ethereum in the NFT field, the dominant smart contract platform will definitely participate in some competition.​​​

related: NFT music market Royal raises $55 million in Series A financing

Young, stupid, not so broken

First-tier blockchains like Solana and Cardano provide an alternative to the high transaction costs that plague the Ethereum network, while also lowering the barriers to entry for a wider audience. These platforms are also in a very advantageous position among Web3-based developers, because factors such as cost, speed, and community growth are critical in the development phase, especially for newer projects.

In addition, as interoperability becomes the next goal of blockchain, we can start to see projects launched on various platforms, just to build a bridge on Ethereum to take advantage of its huge user base. However, despite the dramatic rise in NFT’s popularity and adoption rate, this technology still has a long way to go before it can be used in various industries around the world.

Tor Bair, founder of the privacy-centric non-profit organization Secret Foundation, told Cointelegraph, “Today’s NFT is more like a stupid receipt than smart ownership, with no local access control or privacy for content or buyers. If we can Solving these problems, we will see NFT expand to represent trillions of dollars in art, content, and physical and financial assets.”

He also stated that whether it is through local data privacy, improved scalability or global interoperability, blockchain needs to provide new use cases and design space created by its unique features in order to succeed in this field with Ethereum. . In the long run, both Solana and Cardano can become more widely used platforms in the NFT ecosystem, launching unique products on their networks to attract users.

Just this month, world-famous DJ Steve Aoki collaborated with legendary cartoonist Todd McFarlane to launch the NFT series on Solana. This is the first time he has authorized the sale of original artwork, digital or physical in more than 30 years.

In addition, Cardano and Solana are not the only first-tier blockchains to enter the NFT. Other well-known platforms such as Polkadot, Flow and Wax are pushing this technology to new audiences.

“Compared with cryptocurrency, NFT is like a golf club membership, and cryptocurrency is more like liquid cash,” Abhitej Singh, co-founder of Persistence, a DeFi platform based on Cosmos, told Cointelegraph. According to him, becoming a member of a golf club is subject to various factors, including early membership, exclusivity, community, and other elements that cannot be provided by liquid cash alone.

“Scarcity and exclusivity lead to high social and economic membership costs for new members,” he added.

With the emergence of new protocols such as Flow, Solana, and Cardano, the complexity of Web 3.0 is being abstracted. In the next few years, NFT may become one of the biggest utilities of blockchain technology, not just On the Ethereum network.