- NFTs have become a veritable tool for digital ownership.
- The NFT market is valued at $7 billion. However, experts believe that the market is heading to a trillion-dollar valuation.
- Celebrity collectors continue to acquire blue-chip collections like the Bored Ape Yacht Club, CryptoPunks, etc.
- The Cosmos ecosystem notices NFT projects like Stargaze, OmniFlix Network, Strange Clan, etc.
(NFTs) continue to make waves despite the speculations against them. Rising above the "right click and save" notion, they have proven to be more than a fad, given the number of artists and collectors assailing the space. Today, the NFT market is valued at over $7 billion, yet experts project that it is heading to a trillion-dollar valuation as more use cases emerge. With the arrival of mainstream brands like Adidas, Nike, Pepsi, and others into the sector, there is no gainsaying that the market holds high prospects for creators and collectors alike.
Since gaining traction, NFTs have become an anthem being chorused across media platforms, especially Twitter. The term 'NFT' even made its way to Collins Dictionary as the word of the year 2021. NFT projects like the Bored Ape Yacht Club, the age-old CryptoPunks, Cool Cats, Pudgy Penguins, and Art Blocks have recently resonated with most celebrity collectors
such as Stephen Curry, Snoop Dogg and Shawn Carter (Jay-Z).
The Ethereum blockchain has been the major pivot for many of these projects, hence the ERC–721, the creation standard for almost all NFTs. Even EVM-compatible blockchains provide support for the standard. While the Ethereum blockchain remains a pioneer of this asset class, NFTs expand to other blockchain ecosystems. One of such is Cosmos.
What is Cosmos?
Cosmos prides itself as the internet of blockchains, fielding several interoperable and independent blockchains which can communicate with each other with the help of the Inter Blockchain communication (IBC) protocol.
Older blockchains like Ethereum and Bitcoin have been faulted for being deficient in terms of interoperability. These blockchains were built in silos without recourse to the need for communication with emerging blockchain networks. Due to this, the mass adoption of financial products in decentralized finance (DeFi) and non-fungible tokens has been grossly affected.
The Cosmos network not only addresses the problem of interoperability given the independent yet interconnected blockchains contained within it (some include Terra, Crypto.org, Osmosis); Cosmos aims to solve issues around scalability, usability, and governance, employing state-of-the-art tools which developers can utilize to build independent blockchains.
Each independent blockchain is considered a 'zone' within the ecosystem and powered by a consensus algorithm known as Tendermint proof-of-stake, created by the blockchain engine— Tendermint Core— and designed to be byzantine fault-tolerant. As such, if some nodes in the network fail or begin to act maliciously, the rest can still achieve consensus without breaking down.
How NFTs Benefit from the Cosmos Ecosystem
Apart from capitalizing on the interoperability functionality for use cases such as gaming to expedite mass adoption, NFTs stand to gain several other benefits from the 'internet of blockchains.' One of the core features of Cosmos is its fast finality with respect to transactions.
Transaction Speed and Finality
Older blockchains have been deemed tardy and have low transaction throughput. The Bitcoin blockchain processes seven transactions per second, while Ethereum does 15 within the same timeframe. Yet, both blockchains fail to cater to applications with requirements for higher transaction throughput.
One major impediment to the accessibility and adoption of NFTs is high gas costs, resulting from the inability of most blockchains like Ethereum to process more transactions within a short period. The Ethereum blockchain suffers exorbitant gas costs when the network is congested, and many transactions compete to get added to blocks. This serves as an entry barrier to prospective retail collectors, giving the impression that only collectors with deep pockets can acquire NFTs.
Acquiring NFTs within the Cosmos ecosystem has proven to be shorn of the entry barriers present within other networks. Every blockchain within the Cosmos network utilizes a cost-efficient mechanism to approve mint and purchase, including burn operations. The speed at which transactions are approved on the parent blockchain— Cosmos Hub— and other zones (blockchains) is something NFTs can leverage to enjoy wider acceptance.
Energy Consumption and Environmental Impact
Just like cryptocurrencies, environmental concerns continue to surface with NFTs. The proof-of-work consensus algorithm, which the Ethereum blockchain uses to preserve the state of the network, consumes a significant amount of energy that translates into carbon emissions. While the security of PoW blockchains devolves from the energy used by nodes on the network, the environmental impact is what experts continue to debate.
While we continue to witness the soaring popularity of NFTs and the attendant influx of several projects, every artist, creator, and collector who either makes, buys, or sell NFTs using either Ethereum or other PoW blockchains is responsible for some emissions generated by miners on the network, the Verge
argues in one of its publications. Another argument is that even without NFTs, miners continue to solve puzzles and cause pollution.
Joseph Pallant, founder of the nonprofit Blockchain for Climate Foundation, likened calculating the carbon emissions that NFTs are responsible for to calculating the share of emissions contributed by each person in a commercial plane flight. Pallant argued that an airplane would still emit the same amount of carbon even if some had failed to buy tickets.
Additionally, more NFT projects keep launching daily, increasing the number of transactions miners have to process. As transactions continue to rise, miners expend more energy in a bid to keep up with the work rate. Thus, more mining rigs mean more carbon emissions and more pollution.
However, these concerns about the environmental impact of NFTs are watered down in Cosmos. Cosmos takes a significant shift from the PoW consensus and powers each blockchain within the ecosystem with the Tendermint proof-of-stake consensus — an energy-efficient consensus algorithm. As such, creators and artists can now think of making greener or environment-friendly NFTs.
NFT Projects in Cosmos
In recent times, many projects have emerged on Cosmos, intending to expand the utility of NFTs. Cosmos is the first blockchain to test the interoperability of NFTs following the transfer of NFTs pegged to the famous traditional Chinese paintings by Rongbaozhai
(Studios of Glorious Treasures) across the permission of China's BSN and four public blockchains, namely WenChang Chain and IRITA Hub in BSN, and IRIS Hub (IRISnet) and Ethereum— using Cosmos Terser IBC.
OmniFlix Network, assetMantle, Stargaze, Strange Clan, Passage3D, Pylons, and Secret Network NFTs are some trending projects in the Cosmos ecosystem. The Secret Network NFTs strike more interest in all the projects mentioned above. Artists and collectors will be able to hide the metadata of their collections, ensuring privacy— something that is impossible on public blockchains.