Major blockchains compete for the NFT market, but Ethereum still dominates

This month, Cointelegraph Research will release a comprehensive report on NFT, discussing NFT in detail, and provide detailed guidance for entering this market. 

This report will work with multiple partners (including Enjin, NFTBank, The Sandbox, etc.) to evaluate the technology behind NFTs, the regulatory challenges they face, their expected growth and current market position. The report will also outline the obstacles that the market may encounter in the future, and potential ways to overcome these obstacles.

At the beginning of 2021, people’s interest in NFT increased. OpenSea , the largest NFT market , experienced a hundredfold sales growth in half a year. In the first half of 2021, NFT sales totaled US$2.5 billion, which is almost 8 times the total in 2020.

As a market leader, OpenSea primarily use Ethernet Square , although Polygon and Klaytn can also be used. Other NFT markets also allow the use of other blockchains, but in the past few months, Ethereum has dominated this field, accounting for at least 97% of each NFT market every week, including games, collectibles, and markets.

However, despite Ethereum’s current advantages, there are still a series of important competitors in the market. As can be seen from the graphs of total NFT sales and traders below, Worldwide Asset eXchange (WAX), Polygon and Flow represent powerful opposites. So far in 2021, one out of every three traders uses Flow, and one out of every four traders uses WAX, even though nearly 90% of total sales this year occurred on Ethereum.

Major blockchains compete for the NFT market, but Ethereum still dominates

Importantly, the decline in transaction volume on Ethereum at the beginning of the year was mainly caused by NBA Top Shot, which is Dapper Labs’ NFT collectibles project based on the Flow blockchain, which generated approximately $500 million in sales in the first quarter. Well, it has attracted more than 800,000 users. However, in the long run, although Flow’s gas fee is low and the number of transactions per second is large, it has not succeeded in gaining a large amount of market share.

Major blockchains compete for the NFT market, but Ethereum still dominates

Although WAX only accounted for about 100 million U.S. dollars in sales in 2021 (slightly more than 1%), its website claims that it has the support of a number of top companies, including Google, Atari, Funko, Topps, etc. 

Considering that the industry has a large number of unique traders and the growth potential of releasing new NFT collectibles and games through cooperation with well-known companies, activity on the WAX ​​blockchain may increase in the future. In addition, the simplicity of NFT transactions on WAX may attract new traders to increase WAX ​​blockchain sales. However, the peak of its activity ($15 million in sales per week) occurred in mid-April. Since then, the WAX ​​blockchain has processed between 2 million and 3 million US dollars in sales per week, and it is unclear whether these numbers will rise anytime soon.

Unlike Flow and WAX, Polygon has achieved steady and rapid growth for a long period of time, and recently it has achieved sales mainly through markets such as OpenSea and Aavegotchi’s Baazaar. Polygon’s popularity outside the NFT market, coupled with low gas fees ($0.01 for NFT registration on OpenSea, and $230 for Ethereum), may stimulate NFT market activity on the Polygon blockchain in the long term .

Other notable blockchains–such as Waves (famous for the Waves Ducks game), BSC, and Tezos (famous for Hic Et Nuc, a crypto art NFT platform)–have already appeared on the market, but accounted for The proportion of all NFT sales is less than 1%. There are other blockchains that have just entered the field, such as the Devvio blockchain, which focuses on playing and earning games. 

Nevertheless, activities on a certain blockchain are highly dependent on the attractiveness of the collectibles and games launched on it. This factor may be difficult to predict, and it should inevitably be taken into account before making any investment.

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