NFTs are entering a new era as Solana closes the gap with Ethereum
NFTs at both the Ethereum and Solana chains have become popular over the past year. Trading jpegs on the blockchain was the new shiny thing that had quickly gained acceptance from investors everywhere. This brought millions of users into both chains. But as time has passed, competition has intensified between Ethereum and Solana, which are still the two largest NFT blockchains in space.
Solana closes the gap
The emergence of Solana NFTs is nothing short of impressive in the last couple of months. It has now warmed up to become the best competitor for Ethereum. What this also means was that supporters of both networks have been locked in a kind of battle when it comes to NFT dominance. The increase in Solana NFTs has led to the network taking more market shares from its larger counterparty.
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Solana remains behind Ethereum in terms of NFT volume, but the gap has narrowed over time. This is evidenced by the periods when the trading volume on Solana has managed to surpass it to Ethereum. One of these cases was the trading day on 24 May. The total SOL NFT volume had surpassed that to ETH under much fanfare. Most of these take place at Magic Eden, Solana’s leading NFT marketplace.
SOL closing in on ETH | Source: Arcane Research
It is also clear in the number of addresses that are active on the addresses. While Ethereum’s value had declined, Solana has moved forward. For the month of June, Solana’s daily active addresses had been 250% more than what was registered on the Ethereum blockchain.
Ethereum has a hard time with NFTs
Ethereum is still the preferred blockchain for most people when it comes to trading NFTs, but there are a number of factors that make this a more difficult choice for every day. At the moment, the transaction fees on Ethereum are down. However, it is still much higher compared to competitor Solana.
While the average transaction fee last month came out to $ 6.5 on Ethereum, Solana users only had to pay a few cents per transaction. This cheaper option has been one of the drivers behind the increased SOL adoption.
ETH recovers above $1,200 | Source: ETHUSD on TradingView.com
Nevertheless, Ethereum continues to dominate the market even though NFT volume has declined. Solana has had a good run these couple of months, but even though it has closed the gap a little more, it is still behind Ethereum by a large margin.
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NFT trading volume on Ethereum for June had been 350% higher than Solana, and this is expected to continue in the foreseeable future. However, the NFT area has followed the trend in the bear market. So lower values are expected overall in terms of volume going forward.
Featured image from Cryptonaute, charts from Arcane Research and TradingView.com
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