NFT platform ranking: brand guide

After years of development and iteration, a multi-faceted encryption ecosystem has finally begun to emerge. Especially for industries such as DeFi and NFT, innovation shows no signs of slowing down. Quite the opposite. Every new application and use case builds on the previous content. Without Ethereum , none of this would have happened, and the value of 1.5 trillion US dollars was settled in the first quarter alone. Ethereum is the place with the most liquidity, tools, and users. This is where the action takes place. For organizations interested in pursuing their own NFT strategy, Ethereum can be said to be the best ecosystem to start it. There is only one big problem, it and your plan to come back from prime time-scalability.

NFT platform ranking: brand guide

The decentralized nature of Ethereum provides major advantages for the network. That is, its security, immutability and transparency. But all of this comes at a price, because the network can only process so many transactions at a given time. When demand exceeds capacity, transaction costs will rise, thereby pricing lower-value applications and smaller users. As a business, the cost you pay and the burden you bring to users are very important. It is easy to understand why this is a cause for concern. But don’t let this stop you. There are scaling solutions for Ethereum and alternative networks that can help you achieve your goals. The purpose of this article is to compare these options based on key criteria so that you can better answer this question-where do you want to build the future of digital brands?

NFT platform ranking: brand guide

Although there is no shortage of comparisons that may be made in some form, our purpose in making such comparisons is to focus rather than be exhaustive. For now, there are relatively few NFT solutions available in the market for production. We will pay special attention to the base layer of Ethereum, Immutable X (Starkware/Volition), Polygon (PoS chain), Flow and WAX (built on EOS L1). Generally speaking, other alternatives are still under development, have not yet gained enough appeal, or are customized solutions. At the end of this article, we will include an honor mention section to clarify some of them. Before we make further progress, we also want to talk about the environmental issues caused by some recent criticisms from the NFT on this point. You can rest assured that all the solutions covered in this article are either already green or are moving towards it (i.e. Ethereum PoS). 

At a high level, we evaluated these solutions against all the key criteria that affect the end user experience. Now, in order to make our classification meaningful, let’s first narrow down and see how all these perform at the network level. 

NFT platform ranking: brand guide

As we mentioned earlier in the post, we spoke highly of the Ethereum network. The figure above illustrates how these different solutions exist relative to it, and some of the properties of each solution. That is security and compatibility. On the left, you will notice the label L1, which refers to “Layer 1” and L2, which refers to “Layer 2”. In short, layer 1 is an independent network with its own set of validators and security guarantees, while layer 2 is an extended solution built on top of the existing layer 1, and its security guarantees are very close to its Of the underlying network located above it. For those who are new to the cryptocurrency field, having strong security in this case means that verifiers running a decentralized network cannot easily manipulate or steal users. 

It should be emphasized that the security of different L1s is very different, and Ethereum is much superior to other L1s. Immutable X is built using StarkWare’s latest cutting-edge scaling technology and is the only true layer 2 (“L2”) technology displayed. This allows it to provide several orders of magnitude higher throughput than the first layer of Ethereum, while having similar security. Polygon PoS, Flow and WAX (built on the first layer of EOS) provide weak security guarantees. We should note that Polygon does have a real-time Plasma implementation, which can be viewed as a layer 2 solution with better security guarantees. However, it currently does not support any NFT (although it will be supported in the future), which is why we ignore it in this article. Instead, we will focus on their PoS chain. Polygon also plans to support other L2 solutions in the future, such as Optimistic and ZK Rollups. Again, since these are not yet online, we choose to ignore them in this analysis. Although the timeline is uncertain, if/when Polygon adds support for aggregation, it will place it in a position similar to Immutable X from a security and throughput point of view, depending on their implementation. If you are interested in learning more about Polygon, we suggest you open the link below:

NFT platform ranking: brand guide

Regardless of whether it is NFT-centric or otherwise, a key consideration for blockchain expansion is the basic interaction between scalability, security, and decentralization. This is known as the scalability trilemma, and it shows that in order to add one, you must weigh in other areas. In order to simplify this report and prioritize the attributes that we believe the target audience of this article cares most about, we basically treat decentralization and security as synonyms, because the latter is usually the result of the former. 

Although the trade-off between security and scalability is correct for each platform shown, the degree of trade-off between them can vary greatly depending on the specific implementation. This dichotomy can best be illustrated by comparing Ethereum and Immutable X. Ethereum’s base layer (“L1”) is largely optimized for decentralization and security, which limits its throughput to 15 transactions per second (“TPS”). In contrast, Immutable X is slightly less secure (may also vary depending on the Volition selection), but importantly, it can promote about 9,000 TPS. This is the promise of L2 solutions and one of the reasons for optimism about the future of Ethereum. 

Although estimates of throughput potential vary widely, Polygon’s PoS chain was able to reach 7,200 TPS with 100 validators on the testnet. At this level of decentralization, this is impressive scalability. On the mainnet, we have seen instances of 300+ TPS during periods of high demand, but more stress tests are needed before we know the true upper limit. We prefer to score based solely on mainnet data, but in order to avoid unfairly penalizing Polygon, we assume that the throughput is closer to the testnet TPS and rank it second after Immutable X. For safety’s sake, Polygon ranks third in the PoS chain with 99 validators, and no permission is required to join. However, we should note that validators are highly concentrated, with Binance accounting for 37% of the total mortgage supply.

EOS is the first layer of WAX, reaching the highest level in history of approximately 4,000 TPS, making it third in terms of throughput. However, here, the scalability trade-off is more obvious, as evidenced by the fact that the network has only 21 block-producing validators. The opinion of our team and others is that EOS is easy to collude, which explains why we rank it last in terms of security. Finally, Flow clocked at ~100 TPS. This throughput level may be lower than the level required for mainstream adoption, but if it is achieved by a truly decentralized network, it will be a considerable number. But the strange thing is that this is not the case. Although Flow has 140 consensus validators, most of them are run directly by the Flow team themselves. In addition, you first need permission to run the node. Therefore, Flow is highly concentrated in its current form. With this in mind, you may wonder why we rank it slightly higher than WAX in terms of security. We believe that in the future, it will be easier to decentralize than EOS. In our opinion, Dapper Labs (the company behind Flow) is less likely to deceive its users than EOS Cartel.

NFT platform ranking: brand guide

Next, we evaluated the asset liquidity and ecosystem support of these platforms. In this case, asset liquidity means that NFTs can be easily transferred from one chain or scaling solution to another chain (for example, withdrawals to Ethereum L1). Ecosystem support focuses on the number of high-quality applications that can easily plug in solutions and leverage the assets created through it (such as OpenSea support). For platforms that provide both at the same time, token holders will benefit from the freedom to transfer assets to any place they like, and experience greater utility from how the assets are used.

First of all, nothing can surpass Ethereum in terms of having a huge application ecosystem and numerous asset bridges. With this in mind, you will understand why solutions that closely interoperate with Ethereum can also benefit from these attributes. In the previous chart, we showed a high-level overview of where the different solutions sit at the network level. Now let’s revisit it with some additional context.

NFT platform ranking: brand guide

Dark purple indicates EVM compatibility. Since Polygon uses Solidity, the same smart contract language as Ethereum, any content deployed on Ethereum can also be easily deployed on Polygon. You may ask how easy is it? Think of “copy+paste”. This is a powerful advantage for Polygon because it has minimal conversion costs for applications that wish to migrate, and allows the developer experience to effectively reflect the experience of Ethereum. To date, this has led to a thriving DeFi ecosystem on Polygon and continues to grow. Polygon’s compatibility with Ethereum makes it second in terms of ecosystem support. 

Flow and WAX are designed differently, so they cannot directly benefit from the resources and tools available to Ethereum developers. These networks also have different token standards, coupled with lower security guarantees, may reduce the pricing premium that the market is willing to allocate to these assets, which we will discuss later. Currently, neither of them has a bridge to Ethereum, but we rank WAX higher than Flow in terms of asset liquidity because the bridge is under development. 

Immutable X is in a unique position here. The L2 built by Starkware, where it is located, implements the newly developed CAIRO programming language, which means that not many developers are familiar with it. In addition, existing code cannot be ported from Ethereum to it as easily as Polygon. That being said, we marked it as “semi-compatible” in the image above because it interoperates with Ethereum and uses the same token standard. No matter where the NFT was originally created, whether it is on Ethereum, Polygon, or Immutable X, assets can flow between them, albeit at different speeds. From a technical point of view, Immutable can facilitate faster withdrawal of NFT to Ethereum without compromising security, making it superior to Polygon in terms of asset liquidity.

Regarding ecosystem support, we should note that, in fact, the current composability of the NFT department is relatively low. There are many reasons for this, such as assets being more unique (after all they are irreplaceable), and because the available pricing is usually less frequent/reliable. When we talk about ecosystem support, we are really focusing on applications like the famous NFT market. If you have ever seen a chart of Yearn vault strategy, then you know that composability plays a bigger role in a field like DeFi. Polygon, which has the same high composability as Ethereum, demonstrates this well. It can quickly form an impressive DeFi ecosystem and has accumulated more than $3.5B of liquidity. This is certainly worth noting on the topic of ecosystem support.

However, the growth of Polygon’s DeFi ecosystem may also prove to be a double-edged sword for NFT projects. Applications that migrate to Polygon will eventually still compete for scarce block space on its PoS chain, and if DeFi activities continue to grow rapidly, they may dominate the chain. This ultimately depends on the true maximum throughput of Polygon’s PoS chain and how DeFi demand grows. This may not be a problem at all, but lower-value NFT activities may be priced as they are on Ethereum L1. Of course, NFT-specific activities can also be transferred to another Polygon scaling solution in the future. Compared with Immutable X’s extended architecture, given its NFT focus and large-scale batch processing efficiency, this is not a problem. Its L1 chain footprint (that is, proof size) grows logarithmically. In layman’s terms, the more batch transactions, the more cost-effective it is. 

Now that we have had the opportunity to discuss each solution and its unique attributes, let’s continue our scorecard. As shown below, we ranked the solutions based on various interrelated key factors. A score of 5 represents the best option in their respective category, and a score of 1 represents the worst option. Unsurprisingly, Ethereum dominates in all categories except throughput, which is the advantage of the alternative. Needless to say, there must be a certain degree of subjectivity here, although we have tried our best to provide reasons. Below, we will introduce each of these categories, their meanings, and the factors that affect our ratings.

NFT platform ranking: brand guide

First, the grading of throughput is relatively simple because it can be easily quantified. Immutable X can achieve 9,000 transactions TPS, Polygon 7,200 TPS, WAX 4,000 TPS, Flow 100 TPS and Ethereum 15 TPS. 

Next, we evaluated safety. A large part of this article has been devoted to this topic, so we will keep it short. The second layer built by Starkware, where Immutable X is located, can provide security guarantees close to Ethereum, although this may be different, which is why it ranks second. Polygon came in third because it has an unlicensed collection of about 100 validators. Flow is close behind, although it is currently highly concentrated. As we mentioned before, Flow may become more decentralized over time. We personally believe that compared to the EOS cartel composed of 21 validators that WAX relies on, the opportunity for the Dapper Labs team to manipulate less.

Wallets, although relatively easy to add support, as we will discuss soon, have an important direct impact on the user experience. Taking into account the multiple options currently supported by Polygon, Polygon ranks second, even if the user needs some additional configuration. Immutable X can support any Ethereum wallet with minimal impact on users. However, since only MetaMask is currently available, we now have to rank it third. We decided to rank WAX ahead of Flow because they have built a very intuitive cloud wallet, and Flow still seems to only provide custodial solutions.

Given that most audiences have not yet used cryptocurrencies for transactions, fiat currency gateways may be the top priority of mainstream brands. The ability to directly use credit cards is a major factor in the success of NBA Top Shot, and it also proves why Flow ranks second. However, we should note that due to refunds, card support may have a negative impact on the user experience. In view of the options offered by Polygon and the ease with which liquidity can flow from Ethereum to it, Polygon ranks third in the statutory gateway. Next, WAX gained the features available in its cloud wallet. We now have to rank Immutable X at the bottom of this category because it currently lacks a legal gateway, but this will soon change. 

We approach the developer experience based on how easy it is to build. Many factors take this into account, such as detailed documentation, available Github repositories, adoption of the programming language used, existing tools, etc. Ethereum (Solidity) dominates, followed by Polygon (Solidity) because of its strong EVM compatibility. Later, the developers we interviewed thought that the order of ranking should be Flow (Cadence), WAX (C++) and Immutable X (CAIRO). It should be noted that CAIRO is a very new language, and its adoption rate should increase over time. 

Ecosystem support refers to how easy it is to use existing building blocks for each solution, and how well the ecosystem is integrated. Polygon’s EVM compatibility is again ranked second. Next we used Immutable X. As mentioned earlier, although it is not as compatible with EVM as Polygon, Immutable X can still benefit from the existing Ethereum ecosystem. Although EOS is far behind the Ethereum ecosystem, there are still benefits that WAX can benefit from. Flow does not yet have the same type of open ecosystem or external market support, which is why we ranked it last. 

We believe that existing brand influence is an important consideration for attracting new IP for a particular platform. Therefore, in view of the great success of NBA Top Shot and other IPs in preparation, Flow ranks second here, second only to Ethereum. Immutable X has attracted several powerful gaming brands. Polygon followed closely because it was able to attract multiple DeFi blue chip stocks and NFT projects, such as Aavegotchi. Finally, apart from the recent Topps MLB NFT, our WAX failed to attract any significant brand influence. WAX’s low purchase amount historical transactions reflect the cheap and poor quality products of the main hosting, which in turn attracts less capital flow and interest.

Finally, we define asset liquidity as the ease with which NFT can be transferred from one chain or scaling solution to another chain (for example, withdrawing funds to Ethereum L1). Technically speaking, Immutable X can facilitate Ethereum withdrawals that occur in the next block without sacrificing security. Next is Polygon, which can take up to 30 minutes to extract NFT from its PoS chain. We ranked WAX in fourth place because they are actively building a bridge to Ethereum, which has been on their roadmap for some time. The plans for the two-way bridge with Flow are still unclear, so they are placed last. 

Although the above scores are helpful on their own, they lack nuance and context. Not all categories are equally important, and some categories are more difficult to improve than others. For example, it is much easier for a solution to increase support for wallets than to suddenly provide better security and throughput. The latter may require overhaul and reconstruction of the design architecture. With this in mind, we set out to rank the categories themselves so that we can use weights to adjust the previous scores. The ultimate goal is to make scoring more useful to our readers. The framework we have obtained is shown in the figure below.

NFT platform ranking: brand guide

Based on the above weights, we adjusted the score and final ranking of the problem solution. Again, please note that there is a certain degree of subjectivity in weights, but we have done our best to make wise estimates.

NFT platform ranking: brand guide

As shown above, Immutable X received the best comprehensive score second only to Ethereum, mainly due to its high throughput and strong security guarantees. It performs well in all the most important and hardest categories to improve. Having said that, polygons follow. Although Polygon did not get the highest score in any category, it also did not get the worst score in any category. In all important respects, Polygon is a balanced solution without any major flaws in the field. Flow followed closely, and these two factors contributed to the success of NBA Top Shot-its brand influence and legal currency channels. Finally, we have WAX, which lags behind in other places except for its stable throughput. 

It is important to note how fast this market is changing, and the ground under our feet often changes. As shown in the figure below, Flow hardly recorded any indicators until January 2021, it appeared on the scene in an amazing way. We are encouraged by the mainstream attention that NFT can draw and are eager to follow this fascinating landscape as it develops.

NFT platform ranking: brand guide

In the context of NFT, we often face the question-“To what extent are decentralization and security really important?”. This is an interesting point, especially when the aforementioned NFT relies on IP owned by a centralized company. 

Regarding decentralization, the long-term trend in the past decade is to turn to user-owned communities rather than rent-seeking middlemen who seek value. The desire for true digital ownership on open platforms is increasing. In contrast, walled gardens with lock-in effects are beginning to appear pale. The emergence of a trusted and neutral shared digital infrastructure gave birth to NFT. It is this foundation and the possibility that it can be realized that makes NFT attractive and different from other forms of digital ownership that have appeared before. NFT is an effective atomic unit of the “Internet of Ownership” that can be used to express amazing various digital projects and inject their own history, provenance, and more complex attributes. We believe that the trustworthy neutrality of the networks that publish them is the core driving force that makes them valuable. These networks are attractive because they are owned by everyone, but at the same time no one owns them. Does the market really value this property like we do? The picture below seems to reiterate their views. 

NFT platform ranking: brand guide

The best way to clarify why security is important to your brand and users is to emphasize that there are no consequences for security. Manipulation, theft, and lack of confidence in the future existence of the NFT in question all play a role. For large IP holders considering putting AAA brand assets on the chain, the risk of poor security cannot be ignored. 

Ultimately, if NFTs truly succeed in mainstream adoption, end users may not even realize the underlying technology that makes them possible. Nor should they be expected to do so. A good user experience can abstract many of the complex issues we just discussed. However, these attributes are really important. We hope this article helps explain why. Now that you know the trade-offs to consider, where do you want to build the future of digital brands?

Honor Award 

Although this report focuses primarily on traction production-ready NFT solutions, we want to briefly introduce other options that we did not have the opportunity to cover in depth. It is worth noting that Binance’s NFT market, which will be launched in June, should benefit from Binance’s strong distribution channels. It will mainly run on Binance Smart Chain (L1), but will also support Ethereum.

Solana is another layer 1 that provides high throughput, and we are beginning to see NFT projects working on building. Rollup solutions like zkSync and Arbitrum are also planning NFT support, but the main focus still seems to be building a strong DeFi ecosystem. 

We are very happy to see that projects such as Moonbeam and Unique are committed to providing solutions based on Polkadot that are compatible with Ethereum. Finally, we also want to point out the existence of other ecosystems, such as Forte’s ecosystem, which focuses on building tools for game developers to integrate blockchain mechanisms into their games. Currently, there is relatively little public information about their methods and technology stack. As we all know, they chose to use Ripple’s Interledger fork. Given the focus of the current environment, we are not sure about this approach. 

Crucially, as the network effect of Ethereum continues to deepen, and now there are high-performance solutions that do not affect compatibility, the window of opportunity to replace the NFT platform may be closing. 

The information provided in this article is for general guidance and information purposes only. The content of this article should not be considered investment, business, legal or tax advice under any circumstances. We do not take any responsibility for personal decisions made based on this article, and we strongly recommend that you conduct your own research before taking any action. Although every effort has been made to ensure that all information provided here is accurate and up-to-date, omissions or errors may occur.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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