Mass NFT craze is probably how we’ll remember the last crypto year. Even those who won’t know the difference between stake and steak heard the stories about millions of dollars paid for a BAYC or Crypto Punk NFT. I appreciate your time, so I won’t explain what a non-fungible token is. If you are still a little foggy on the concept, read up on it here.
Even though Ethereum currently has the biggest share of the NFT market, there has been a lot of progress in the Solana ecosystem over the last year — from huge investments to renowned NFT marketplaces expanding into Solana.
To give you a little context on the Solana NFT market Solana’s first NFT collection, Kreechures, was launched on March 26, 2021. Just over a year later, Solana surpassed $2 billions in all-time NFT sales, and 600 thousands in unique buyers.
But why not just continue to use Ethereum?
Well, Solana experienced this immense growth for a reason: its ability to process about 1000x more transactions per second than Ethereum does makes extremely low gas fees possible.
If you are interested in the details, it’s about the difference between Proof-of-Work (Ethereum) and Proof-of-Stake (Solana) consensus mechanisms, and we previously published a Medium article about it.
So the blockchain mint fee alone on Ethereum will cost you $70 on average. Because of this, a lot of young artists won’t be able to afford launching a collection. This makes the Ethereum NFT market rather exclusive.
Now compare this to Solana’s average mint fee of around 0.01 SOL (~$0.40 at today’s rate) enabling anyone to launch a huge collection with minimal costs. Also, by minting an NFT on the Solana blockchain you’re not harming the environment as it doesn’t have the huge carbon footprint of a Proof-of-Work blockchain — also something that a lot of people care about today.
For the buyer or collector, it essentially means that the final price of two identical NFTs would be higher on the Ethereum chain, since the author will obviously want their mint costs covered, on top of the price of the actual art.
Solana’s virtually free mint means that you can keep a lot of your dear memories on blockchain as an NFT: not with an intention to sell them later, but just for the fun of it. Mint your child’s painting, or a wedding photo: literally anything you’d like to keep as a souvenir.
There is no point in denying that the Ethereum NFT market is still much larger than that on Solana. However, if you are launching a collection — be it a generative collection or one with your own art of photographs–a big market is not necessarily a good thing. Since the Ethereum market is pretty old, there is a number of popular, expensive projects that can afford to spend a lot of funds on their new launches. This makes it really hard for a newcomer to compete with them: how are you going to outdo a new NFT from the authors of BAYC? It’s nearly impossible to get good exposure without being ready to spend hundreds of ETH.
But when you have a fresh and fast-growing market like Solana, it’s much easier to become a serious player there by finding your niche in a developing ecosystem. It’s just fair competition.
No matter how I might love Solana, it would be silly to claim that it beats Ethereum in every regard when it comes to NFTs.
Ethereum still has the highest number of unique buyers among all NFT markets, and if you’re ready to spend big to launch your own collection, Ethereum is probably the way to go. It’s also important to mention that nothing is free, and the tradeoff for extra low minting fees is Solana’s lower network stability — especially when a popular NFT collection drops, as we’ve seen before. We all know that Solana had a couple of crashes over the last year. In comparison, Ethereum is more stable.
Right now, Solana and Ethereum are just a little better for different purposes and different target audiences. Nevertheless, premium Solana collections are a living proof that it might catch up with Ethereum in the areas where it is still behind — while keeping its advantages in the low-fee high-TPS department!
The future of Solana NFTs looks very bright right now
Solana already has its own top projects that made millions of dollars. According to Solanalysis, Degen Ape Academy is Solana’s most valuable NFT collection: to date, this blue-chip collection has a market valuation of almost $503 million. Another excellent example is Solana Monkey Business: with a market capitalization of $60 million, the current floor price is 59 SOL. Okay Bears, SolPunks… the list can go on and on.
And with technology that makes the NFT scene so much more inclusive, there is no doubt that this market will grow further.
Afterword: Social importance of NFTs
Many believe that the NFTs’ only purpose is “Buy for less, sell for more”. But in fact there is so much more to it than that.
One of the most important uses of NFTs aside from ‘flipping’ and collecting is to secure funding for nonprofits and charities.
NFTs help museums monetize their assets without selling historical artifacts: a lot of worldwide famous museums are selling digital copies of their exhibits. You can buy an NFT of paintings from the Hermitage to support the museum, while the original stays where it belongs.
As for Solana, just a couple of recent examples:
The Leyline platform recently raised $60,000 as artists and developers banded together and sold NFTs to help get medical supplies for the children suffering from cancer.
“SOL for Ukraine” launched a 10,000 NFT collection and raised over $500,000. All of the proceeds were donated to help the people of Ukraine.
A positive reinforcement in the form of an NFT that stays with you, and this is exactly where Solana comes into play as its low fees make it possible to chip in with just a few bucks to crowdfund a good cause.