Why NFTs Need Cross-Chain Technology and Blockchain Agnostic Marketsโ€‚by@elizabeth-levine

Why NFTs Need Cross-Chain Technology and Blockchain Agnostic Markets

Elizabeth Levine HackerNoon profile picture

Elizabeth Levine

#DeFi #NFT and everything in between

Day by day, NFTs are making the case for cross-chain technology stronger. At the very least, they make a case for blockchain agnostic NFT marketplaces considerably more compelling for those in the know. As the market has grown, it has expanded across multiple chains from Ethereum, Binance Smart Chain, Avalanche, Solana, and layer two solutions such as Polygon and Immutable X.

Putting gas fees aside, while collectors may or may not care which blockchain their NFT is hosted on, those who collect NFTs for their resale value certainly do care how many pairs of eyes can view their collection. It's all about the potential size of the market, and right now, liquidity for NFT collections is highly segmented. It's not hard to imagine that an NFT tied to a single chain might have lower resale potential than one which can capture the interest of the broader industry, especially if the NFT is hosted on a marginally smaller native chain.

While the early NFT market and its growth was tied to the Ethereum network, NFTs, much like DeFi applications before them, are now branching out. One reason for the proliferation of NFTs across multiple chains is the inherent scaling problems of the Ethereum network. Unfortunately, attempts to make Ethereum more scalable have, as yet, seen relatively little success, allowing other chains to make moves on its crown.ย 

This is not the whole story, however. NFTs have become such an essential aspect of the wider crypto environment that it would seem almost careless for any major blockchain in the sector not to have at least a few good NFT projects in its stable.

Cheaper and Faster

While Ethereum remains the king, its grip on the market appears to be weakening. Binance Smart Chain is one of the rivals leading the charge, having now surpassed 100 million unique addresses. The fact that BSC is a fork of Ethereum makes it relatively easy for projects to port from one chain to the other - and with far lower fees, some retail investors feel better cared for on the rival chain. However, BSC is not the only contender with which Ethereum must reckon with.

Avalanche, which focuses on speed and low transaction costs, is another one of the emerging competitors seeking to capture a share of the NFT market. The blockchain is now attempting to eat into the market share of the big players. This need for speed has also helped fuel the growth of the aforementioned Binance Smart Chain, as well as Solana and layer two solutions, including Polygon.ย 

One of the NFT marketplaces that has capitalized on this drive towards faster and cheaper chains has been NFTrade. The cross-chain, blockchain agnostic marketplace has successfully positioned itself to become the #1 destination for Avalanche NFTs both by users and trading volume. Solana will become the fifth blockchain the market will support, joining Ethereum, Polygon, Avalanche, and Binance Smart Chain. A 6th, 7th, and 8th chain is expected to follow shortly afterward.

OpenSea, one of the first-movers in the NFT market, is also extending cross-chain support - albeit at a more leisurely pace. The marketplace which has been at the forefront of the NFT market on Ethereum also supports Polygon and Klatyn.ย 

While a number of marketplaces remain tied to a single chain, there are increasing numbers going multi-chain. This is a solid long-term strategy for those who wish to future-proof themselves, especially as cross-chain bridges make native network assets much more fluid.

What Matters

One of the big questions which market analysts must grapple with is how much users care about decentralization and blockchain fundamentals versus cost, transaction speeds, and other concerns. The top chains have all taken different approaches to address these problems.

Solana is one of the fastest chains on the market with 400 millisecond block times, but it is also highly centralized. In September, the Solana mainnet was overloaded and even needed to be rebooted. The implication of such an action is clear; a network that can be stopped and restarted by a controlling entity is arguably not a distributed blockchain at all.

Despite this, Solana is also growing considerably in popularity, especially in the NFT sector. For years, a prevailing belief in the blockchain sector has been that decentralization is one of the most important factors (if not the most important), but for some users, it seems that this is not the full case. While Ethereum has grappled for years with Eth2 and moving to Proof-of-Stake, other chains are quite happy to take advantage of this gap of capabilities by providing more centralized solutions.

NFT Positive, Blockchain Agnostic

The incredible growth of the NFT market and its propagation on multiple chains shows the impending need for multi-chain integration. Cross-chain technology is one way to deal with the segmentation of NFTs across multiple chains; blockchain agnostic marketplaces are another. With increasing numbers of chains and options for creators, collectors, and users, NFTs need cross-chain and blockchain agnostic marketplaces. In any case, the NFT market appears to have a truly bright future ahead of it - on many different blockchains.ย 

This article is part of The Gaming Metaverse Writing Contest hosted by HackerNoon in partnership with The Sandbox.

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