Even though the history might not rhythm but unequivocally you cannot question the claim that it doesn’t rhyme. Why’d I open up with such philosophical lines because we have failed to learn from the mistakes. For example, the cryptokitty event was the moment of epiphany for everyone that going with the flow/trend is good when you want to capitalize on the winds that help you set sail, but you need to look at the history of the sea as well.
When NFTs inundated the Ethereum chains in 2017, barely the community was prepared to handle such large inflows with just 20 to 25 transactions per second. What did it lead to? The network activity reached such heights that NFT minting started to cost as high as $100 to $200. To put that into perspective, if an NFT marketplace wishes to list 10,000 NFTs, it would cost around 10,000 units * $100. You can do the math. That’s for fees alone. Now, when you include other costs like development, price discoveries and listing, the competitiveness of the project is lost already. So, forget the buzzword, moonshots!
What did it lead to?
Many NFT projects stealthily moved to other cost effective chains like Solana with high TPS. However, there’s a way more facts to deal with and scalability was just the tip of the iceberg. Those projects that chose Solana over Ethereum due to high fees suffered at a different front, the decentralization conundrum. Solana’s ecosystem was majorly backed by VCs with the likes of Alameda Research and FTX and when the FTX scandal unfurled, more than 77% NFT projects migrated to the Polygon chain.
So, the space started to get exposed to another risk, which is the pseudo popularity of high scaling blockchains, which were heavily centralized. The fall was inevitable as a result. So, if you are planning to launch your NFTs, the choice of blockchains will be paramount. Why? Because, it could help you overcome the following obstacles when it comes to making or breaking your NFT project.
The Make or Break Factors While Choosing Blockchains for NFT
A 51% Attack Threat
The reason most of the NFT projects migrated from the Solana to other blockchains was primarily because of the concerns of centralization of the chain. Solana was heavily funded by the VCs, which means it was more prone to a DD-o-S attack. As a result, the NFT projects migrated to a different chain. But one must be mindful of the fact that building an NFT community from scratch takes into account efforts and resources. So, when you are moving your NFTs to a different chain, the effort would start from 0 again in a new community, until and unless there’s interoperability available on such chains. In such a case, you get a significant amount of exposure for your NFTs in a new chain with a different community.
Smart-contract vulnerabilities also remain another segment that requires special mention here. Those blockchains that have provided very high-end auditable smart-contract features could easily avert instances like that of Adidas. In the Adidas NFT sale, attackers were able to bypass the security features and apply for more tokens through a single wallet. In this way, they were able to completely disrupt the launch. When you are applying for any NFT project on a chosen blockchain, always be mindful of how they have dealt with their smart-contract auditing. If it has been duly taken care of, the blockchain could be more secure than its counterparts.
Consensus mechanism could also avert the 51% attack vector if you have chosen the right blockchain. For example, PoW or Proof-of-Work is the best practice but lately on the Bitcoin Blockchain, Ordinals have clogged the network. Now, Bitcoin has introduced SegWit and TapRoot which allows more data to be integrated on the block. As a result, it increases the block size.
However, though the process simplifies transaction processing, in the process, it makes mining much harder. So, small nodes might not be able to join the consensus pool and large nodes with very high computing powers are generally owned by corporations. Hence they can compromise the decentralization; thus, diluting the security. So, when you are launching your NFT project, along with the speed, you have to consider the decentralization part. And once the decentralization is sorted, the security shall follow. So, you ought to have such an approach when it comes to choosing the right network for your NFT project.
NFTs are at its nascent stage of development and one must be mindful of the fact that the compromise of any kind could compromise the image of the technology. Hence, you should always look for the right chains that promise everything: (i) security (ii) community (iii) TPS (iv) decentralization (v) Security. If the network is able to provide all the above aspects, in such a situation, you can easily expect that your NFT project could moon in the near future.
As a leading blockchain advisory and consulting firm, We specialize in guiding projects toward success. With our expertise in blockchain technology, consulting and secured nodes deployment, we can help you navigate the intricate world of NFTs. You can now ensure that your NFT project is built on a foundation of security, innovation, and community involvement, maximizing its chances of thriving in the evolving NFT landscape.