The majority of nonfungible token (NFT) marketplaces today reside on Ethereum. Yet, there is one major limitation it faces: the issue of scalability. Buying a $30 NFT can end up costing you upwards of $100 with all the gas fees.
Hence, one of the main aims of newer NFT marketplaces is to incorporate multi-chain functionality, providing users with more options. The most commonly seen ecosystems now are Binance Smart Chain (BSC), Polygon, Etheruem and, most recently, Solana.
Ethereum is one of the largest blockchains to date. Introduced in 2015, it instantly attracted users to its network as it contrasted the capabilities of Bitcoin by allowing developers to run programs and code via the Ethereum Virtual Machine and smart contracts. It’s known as one of the most secure ‘marketplaces’ for things ranging from financial services to building apps. However, Ethereums low throughput has made for congestion problems and notoriously high fees which its new 2.0 upgrade is hoping to solve in the near future.
OpenSea is widely regarded as the leading NFT marketplace which happens to be built on Ethereum. Capitalizing on the attention that the launch of CryptoKitties had generated in 2017, OpenSea have over 34M NFTs, 300,000 users, and have traded $4B+ volume according to their website.
Founded in 2017, Solana is currently one of the most promising blockchains in the cryptoverse. Its high performance network boasts transactions per second in the tens of thousands while having some of the lowest fees. This efficiency is highly attractive for project developers who are building projects that are forecasted to have high traffic and need to sustain large transaction volumes. However, a disadvantage of Solana is that its smart contracts use a programming language known as Rust, which many do not know.
Although most Solana NFT marketplaces are still in beta phases, the demand for them is most certainly there. Namely, Solanart, has drawn a substantial amount of collections to its platform and has made around 416,500 total sales valued at a total volume of approximately 4M SOL.
Binance Smart Chain is a relatively new blockchain launched in 2019 by the Binance exchange with the aim of giving users another option to avoid Ethereum’s high gas fees. Binance Smart Chain’s smart contract functionality and the fact that it’s built on Solidity means Ethereum-based dApps can be replicated and interoperable with Ethereum. This makes BSC highly useful for users needing cross-chain support hence why we see marketplaces tend to use BSC in conjunction with Ethereum and not on its own.
Polygon is a layer-2 solution and was made to solve Ethereum’s high gas fees, and low transaction speed problem. Because it’s built directly on top of Ethereum, it’s interoperable with the root chain while being more secure than other blockchain’s like BSC. It’s also especially useful for developers making it a prime place to build projects. Much like BSC, there aren’t any well-known marketplaces that are solely built on Polygon but instead are often used in multi-chain platforms as we’ll see down below.
As mentioned in the introduction, the need for multi-chain platforms has been increasing as existing single network platforms, particularly on Ethereum, struggle to cope with the amount of users, exceeding the capabilities of the technology.
Refinable, which supports BSC, Ethereum, Polygon and soon, Solana, has been rapidly building up its community. It’s multi-chain functionality is advantageous because they have the ability to facilitate and centralize digital assets into a single place, adding more utility to the user experience. Artists now have the choice to mint their NFTs on one blockchain before transferring it to another chain to conduct the sale, all while staying within one platform and minimizing cost.
When you come to the realization that the benefits of low fees, centralization and efficiency are only achievable with a practical multi-chain solution, it’s easy to see why they are such a primary focus of not just NFT platforms, but also other dApps and projects. As long as we continue to bridge the worlds between the different blockchains, we’ll be able to raise the potential and capabilities of these technological wonders.