Thinking behind Ethereum and Solana NFTs: Why do collectors choose more expensive chains?

Under the downward trend of the entire Crypto market, market participants are actively looking for other revenue channels, and funds are more inclined to flow to projects with stronger “narratives”.

Original title: “ETH or Solana’s NFT: The Chicken and the Egg Question”

The NFT market has returned to calm after the continuous fluctuations in the past half month. The NFT projects on the ETH chain ushered in the winter of the whole week. In contrast, Opensea, the largest NFT trading platform, supports NFTs on the Solana chain. More unique projects have attracted the attention of most people. YugaLas, the long-term “topping list”, has also been defeated in the transaction volume of the past week. SolanaNFT, led by Okay Bears, has begun to rise, and even Okay Bears The imitation disks of 2019 have begun to climb to the top frequently, and major social media have shown mixed attitudes towards this phenomenon. Mr. Fox, Real Vision’s NFT columnist, summarized the NFT market dynamics in the past week, and conducted in-depth analysis and reflection on the “new trends” brought by Okay Bears.The original translation is as follows:

review

Simply put, over the past 7 days, the NFT market has begun to gradually rebuild from the chaos it suffered last week. For now, progress is slow, but that doesn’t mean everything is starting to stand still. Looking back at the signs of the past week, we disassembled the information for an analysis.

In the past week, we have seen the overall NFT market in a sideways state, but there are still some NFT floor prices that have risen, let’s take a look at the screenshot below.

Thinking behind Ethereum and Solana NFTs: Why do collectors choose more expensive chains?

But things have gotten worse for some NFTs this week, especially as the floor prices of projects like Fidenzas, Ringers, and Azukis have dropped significantly.

For Fidenzas and Ringers, the losses are a pullback from the massive rally that both projects experienced last week, as well as a drop in other NFTs. Many believe that investors are shifting their ETH from speculative avatar NFTs into longer-term NFTs such as digital artwork as fears of a big bear market in the NFT market intensify; hence the uptrend in Fidenzas and Ringers As shown below:

Thinking behind Ethereum and Solana NFTs: Why do collectors choose more expensive chains?

Floor price chart for Fidenza over 30 days, chart taken from flips.finance

Thinking behind Ethereum and Solana NFTs: Why do collectors choose more expensive chains?

Ringers floor price chart over 30 days, chart taken from flips.finance

As far as Azuki is concerned, they are still experiencing the aftermath of Zagabond’s “Rug Pull” incident, one of the project’s founders, even though they have nearly doubled their floor price of almost 8ETH. Here’s their floor price for the last 30 days:

Thinking behind Ethereum and Solana NFTs: Why do collectors choose more expensive chains?

Azuki floor price chart in 30 days, taken from flips.finance

After the negative news, there are still a lot of positive signals. In addition, Bored Ape Yacht Club, PROOF Collective, Moonbirds, Mutant Apes, CloneX, World of Women and Meebits all showed an uptrend, while Doodles, VeeFriends and Gutter Cats saw relatively small declines. Among these projects, there are also many reasons for good news. For example, Yuga finally gave us some clarity on their Metaverse, The Otherside, by releasing a short clip of the Otherside gameplay.Some details about the next steps for The Otherside have been released, although the information is already known. The main point is that Kodas will be able to separate from the land in the future, and the land resources will be dynamic and changeable, and they will be used to build, trade and develop over time.

Moonbirds tweeted a very mysterious Gif. Many see it as a reward for their first nesting in about a week. These were the main developments in the NFT market on the ETH chain last week in terms of the project’s actions.

Okay Bears

Thinking behind Ethereum and Solana NFTs: Why do collectors choose more expensive chains?

Okay Bears is an avatar NFT project on Solana and one of the most eye-catching projects recently.

When we think of NFTs, we rarely think of which chain this NF was issued on, for several reasons:

It doesn’t have much to do with NFTs per se, unless it’s a utility that’s going to be used in many applications or games for a lot of transactions. However, the vast majority of NFTs that the market is accustomed to are avatar types, which do not need to be transferred frequently after purchase.

However, the biggest reason we rarely think about which chain our NFTs are on is that almost all NFTs we know today exist on ETH, so most people will subconsciously think that NFTs should be issued on ETH.

If the above is why we only consider NFTs on Ethereum, then the next question we have to think about is why NFTs on Ethereum can continue to be the most popular, while those built on Solana and Immutable X (Ethereum 2 Layer network) and other projects on the public chain without gas consumption, but it is difficult to obtain the same level of attractiveness?

One thing is for sure, this is not a decision about utility, as Solana and Immutable X offer the same experience as Ethereum, but much cheaper. Again, this is not price-oriented in the full sense, because although the price of SOL is much more volatile than ETH, the fee savings through the former will certainly reduce the impact of this volatility. On Immutable X, if users prefer to use ETH, they don’t even have to use L2’s Token IMX for transactions.

Interestingly, we have seen very similar dynamics in other areas of NFTs, such as platforms in the secondary market.Although LooksRare provides users with a more economical and favorable trading environment, the users it accumulates still only account for a small fraction of OpenSea’s daily active users.

So why is this so? Why do NFT market participants always choose the more expensive method when cheaper alternatives are readily available?

I think there are mainly two reasons:

The chicken-and-egg problem

Yes, Solana, Immutable X, and LooksRare all save users more money than their competitors, but there’s still a lack of product on these platforms. In the case of Solana and Immutable X, most new NFT projects are still ETH-based, making it difficult for these alternative chains to establish a first-mover advantage. Because people only buy NFTs on the ETH chain, it causes no one to issue NFTs on other chains, because no one issues NFTs on other chains, people can only buy NFTs on the ETH chain, and because people only buy on Ethereum, and many more.

While a bit beyond the scope of today’s discussion, the same is true for LooksRare. In theory, it would be more cost-effective for both buyers and sellers to execute the same trade on LooksRare than on OpenSea, but many don’t because OpenSea’s competitors lack real valid pending orders. If you want to sell NFTs, your priority is liquidity (really being able to sell NFTs), so you will always choose OpenSea over LooksRare. Due to the lack of real and valid pending orders, it is difficult for buyers to find more suitable deals. Because no one is placing an order, no one is buying, and because no one is buying, no one is placing an order, and so on.

User’s subjective experience

Even though a lot of news has stated that using other chains can be much cheaper than using the ETH chain, people still prefer the ETH chain which is known for its high gas costs.

Another theory for this is that, at the end of the day, we are human beings, and at our core we desire and enjoy rich experiences. It all goes back to the origin. Obviously, choosing ETH is the more expensive route to invest in NFTs, but it is still a top public chain. It seems that many would rather pay extra gas in exchange for having their assets on the world’s largest public chain. That’s why Rolex watches sell so much more than other watches. Yes, they (watches) function as timekeeping, but when you use a Rolex to tell the time, there is a unique experience. ETH, like other brands, is currently the largest chain of NFTs in the world. This largely matches the example outlined above.

We really like to use the term “ETH network effect” in our coverage of Real Vision because everyone is already on-chain and everyone is continuing to build on top of it, which is why so many people want to Their NFTs also exist with ETH. The gas fee is just the cost that many people are willing to pay to join this network for a richer experience.

This does not mean that NFTs will not explode on other chains or on the Ethereum Layer 2 network in the future. All the opportunities only need a special project or product to bring enough traffic to solve the chicken-and-egg problem. And the flywheel of this network effect is starting to appear on other platforms.

Is this the hottest NFT project we’re seeing right now, Okay Bears?

Okay Bears have been hot in the past 7 days. It has become the most successful Solana avatar NFT project to date.Although other Solana NFT avatar projects have had some success. For example, DeGods, SMB, etc. So far, Okay Bears is the leader in terms of transaction volume and previous projects in Solana, and its project has attracted the attention of all NFT communities.

What Makes Okay Bears Different? Why are they doing so well?

Sadly, the answer is nothing. Okay Bears is just another avatar-like NFT project. Their roadmap, or “blueprint” as they describe it, is not even as nuanced as most projects do today. Their commitment to IRL events, collaborations, future minting, etc. – is the same as any other project. There’s nothing special about Okay Bears.

I don’t mean to criticize this project. Sometimes it may be better to just let the art and atmosphere of the NFT guide the direction of the project without committing to anything. In a way, that seems to be what happened in Okay Bears. Some projects are lucky enough to find a magic way and eventually catch on.

Many critics of the Okay Bears have noticed a concerted effort by holders on Twitter to promote the project, claiming that its growth has been more or less inorganic. Now, I can’t comment on the authenticity of this project on Twitter, but what I can say is that the Okay Bears seem to be the biggest winner in public opinion.

While ETH’s NFT suffered a huge blow, the entire Crypto market also showed a downward trend. Market participants are actively looking for other sources of revenue. Therefore, funds will only flow to projects with a stronger “narrative”. In this case, Okay Bears will be the first top Solana avatar NFT project, so everyone should be exposed to NFTs on different chains, everyone needs to catch a bear before the price goes up.

Of course, none of the 12-person teams listed on their official website are real-name certified. This is not a good sign for the future of a project.

Over the past 24 hours, Okay Bears has seen an astounding amount of volume (more than any other NFT), but fundamentally, there is no sign that the project will succeed. It’s worth noting that NFTs are generally not that rational, so Okay Bears didn’t create stunning picture quality, but that doesn’t mean it won’t keep rising. I’m not saying that Okay Bears is just a short term growth, as they are now a leading project, but it is undeniable that no one wants to find any opportunity to make money while the crypto market continues to sideways. 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/thinking-behind-ethereum-and-solana-nfts-why-do-collectors-choose-more-expensive-chains/
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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