Nov 24, 2022
Read 3 min.
Looking through dozens of NFT collections on NFT marketplaces, you may have noticed that most of them are Ethereum-based. Why so? Let’s try to figure it out.
How it all started
Ethereum network was the first to support NFTs with its ERC-721 standard, which means the first real NFT artworks were born on its blockchain.
In October 2015, the first NFT project called Etheria was launched at Ethereum’s developer conference in London. Etheria included 457 tradable, non-fungible tiles. They remained unsold for five years until March 2021, when interest in NFTs sparked a buying frenzy. Eventually, Etheria NFTs were sold out for a total of $1.4 million.
Then, more and more Ethereum-based collections started to appear in the NFT world, with Crypto Punks and Bored Apes on the top of the list.
Why do NFT creators choose Ethereum?
Ethereum’s blockchain is currently the most widely used, leading among other blockchain networks. As a result, creators can sell their NFTs for a substantially higher price and find more buyers, compared to other platforms.
The reason is not only Ethereum’s worldwide popularity, but also its highly-secure network and data architecture. Bulk of NFT projects are running on ERC-721 coins, a standard developed by Ethereum.
In addition, by minting your NFTs on Ethereum the blockchain, you get wider access to the market, since virtually all crypto wallets and NFT marketplaces support (or are built on) Ethereum network.
How many NFTs are on Ethereum?
There are more than 80,000 NFT collections on the Ethereum blockchain, and this number is constantly growing. Also, nearly 5% of all Ethereum addresses hold one or more NFTs.
Are there any disadvantages?
Of course, such popularity has its price. High volume of network traffic inside the Ethereum network causes a significant transaction backlog. It leads to a tangible increase in transaction and, sometimes, minting fees. That’s why today Ethereum is not the best blockchain for beginning NFT artists.
For example, to list an NFT on the most renowned Ethereum-based marketplace, OpenSea, will cost you at least 0.2 ETH. You also have to pay fee when someone buys your digital art.
Because of the Ethereum blockchain’s limitations, NFT artists are turning to other solutions. Among them — Solana blockchain and BNB Smart Chain by Binance.
It’s worth noting that Solana-based NFTs are getting more attention and recognition in the industry. The network is often called ‘Ethereum-killer,’ and here we explained it if really is.
All in all, transactions on Solana usually cost less than a dollar, so many NFT projects and collectors have migrated to its blockchain for scalability and cheap fees.
Even with its limitations, there’s no doubt that Ethereum is the largest ecosystem for NFT, and the majority of the investors are looking to buy Ethereum-based digital arts.
Ethereum takes the lead with a much bigger trading volume than Solana or BNB Chain. On the other hand, there’s also a huge supply of low-rated NFTs that no investor would like to buy.
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