3 Causes Why Solana Might Overtake Ethereum in NFTs: Magic Eden

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  • Magic Eden has grown from 0 to $1.54 billion in platform gross sales in lower than a 12 months.
  • Proper now the platform primarily makes use of solana to mint NFTs, for 3 important causes.
  • The founders imagine that solana supplies higher technical options for NFTs than ethereum.

In lower than a 12 months, Magic Eden has turn into the second largest NFT market on the earth. Simply final month the corporate raised $159.5 million from tech titans like Sequoia and Greylock, giving it a $1.6 billion valuation. 

An enormous a part of the platform’s success may be attributed to its prescient wager on solana, a blockchain that has rapidly gained recognition over the previous few years and eaten into ethereum’s lead within the NFT market.

Insider just lately spoke with Magic Eden co-founders Zhuojie ‘Rex’ Zhou and Sidney Zhang about their ideas on solana, and why they’re so bullish about its future. 

Betting large on solana

Magic Eden was based in September of 2021, proper in the course of final 12 months’s NFT growth.

The platform at present solely permits for solana NFTs — or NFTs which might be minted on the solana blockchain. That’s in stark distinction from its greatest competitor Opensea, which solely accepted ethereum till April 2022. 

However it seems that the selection has labored properly for Magic Eden. Since its inception lower than a 12 months in the past, Magic Eden has scaled as much as over 837,000 customers, has two million extra month-to-month transactions than OpenSea, and has an change quantity of over $1.54 billion.

As we speak, Magic Eden controls just about the whole solana NFT market. Roughly 97% of all solana NFT transactions and 92.4% of solana gaming NFT trades happen on Magic Eden.

Whereas they’re reaping the rewards immediately, it wasn’t the simplest alternative for Magic Eden’s founders to select solana over ethereum when the corporate was based. A lot of the flagship NFT collections, like Cryptopunks and the Bored Ape Yacht Membership, use ethereum, and distinguished NFT artists like Beeple have solely offered their art work on the ethereum community.

Nevertheless, solana has been rapidly catching up with its crypto competitor. 

“On the finish of February ethereum represented 91% of all NFT trades and solana was 6% or so. As we speak ethereum represents 66% of the variety of trades and solana NFTs characterize 14% of the overall adjustable entity market,” Zhang instructed Insider. 

He and Zhou have three particular the reason why they see solana persevering with to chop into ethereum’s dominance within the NFT market. 

3 methods solana is healthier than ethereum

Tremendous quick layer-1 resolution

The primary purpose Zhou and Zhang wager on solana is the velocity at which it conducts transactions.

“The language was like an excellent safe mindset and the proof of historical past consensus algorithms, it helps 400 milliseconds block time, and 3000 TPS (transactions per second), which is type of unreal for some other blockchain, particularly a L-one blockchain,” Zhou mentioned.

To place that in perspective, ethereum has a block time of 10 to 12 seconds — or 2,400% to 2,900% slower than solana’s — and roughly 10 transactions per second. Cardano, one other solana competitor, has a block time of 10 seconds and 250 TPS.

Velocity is important for a blockchain community to scale. To place it in perspective, Visa frequently processes 1,700 transactions per second, and claims to be able to processing as much as 24,000 TPS. The quicker solana can conduct transactions, the stronger the community and the extra interesting it’s to corporations trying to undertake a blockchain technique for his or her enterprise.

Low transaction charges

Zhou mentioned solana’s low fuel charges are one more reason to be optimistic concerning the blockchain’s future. Gasoline charges seek advice from the cost required to conduct a transaction on any given blockchain.

One of many greatest criticisms of ethereum is its excessive fuel charges, which is among the important causes traders started in search of alternate options like solana. 

“I feel it is fairly apparent, individuals perceive, it is actually low price to work together with the chain. Which suggests, if you happen to check out the stats of Magic Eden versus different marketplaces, then when it comes to variety of transactions we have now far more on-chain interactions than some other blockchain NFT marketplaces,” Zhou mentioned.

Not way back, when the Bored Ape Yacht Membership launched its metaverse, Otherside, over $176 million in fuel charges have been burnt. People reported that they spent over $14,000 in fuel charges to mint 4 NFTs. For perspective, the fuel charge to mint an NFT on Magic Eden is lower than a penny.

Polished client expertise

Lastly, Zhou mentioned that the expertise of utilizing solana is extra “snappy and polished” than ethereum. 

Caseem Ward, a solana NFT holder and advisor with Gentle Node Media, concurred with this evaluation.

“It is all the time a easy and frictionless course of buying solana NFTs throughout a sale,” Ward mentioned. “Degenerate Ape Academy was the primary SOL NFT I minted, and it was such a pleasure. I paid lower than a cent to mint and obtained my Degen Ape immediately, escaping an exorbitant fuel charge and lengthy wait time for my transaction to verify on the blockchain.

Ward continued: “Solana does not have fuel wars, a phenomenon the place an anticipated NFT challenge has hundreds of consumers making an attempt to safe their spot on the blockchain with a purpose to mint throughout a public sale leading to fuel charges pushed as much as sky-high ranges. That is in stark distinction to what I’ve skilled minting ethereum NFTs.”

Throughout the Otherside public sale, the ethereum blockchain really skilled an outage on account of how a lot demand there was to buy a metaverse plot. This resulted in lots of potential traders lacking their probability to speculate.

It’s value noting, nonetheless, that solana itself has had a number of outages as properly.

The way forward for solana appears brilliant

One of many hindrances stopping solana from taking on the NFT market is the shortage of artists who’re constructing on the solana blockchain community proper now. 

Many creators select to record their NFTs on the ethereum blockchain just because there may be more cash within the ethereum system than solana’s. In 2021, the overall NFT market was over $41 billion, whereas the solana NFT market was lower than $1 billion. However Zhang says that the established order is rapidly altering.

“There are a number of artists, very well-known artists which might be selecting to drop on solana that most likely would not have chosen to drop on solana in October of final 12 months,” Zhang mentioned. 

He additionally famous that main celebrities like Steve Aoki, Michael Jordan, and Shaquille O’Neil have all just lately experimented with solana. 

Rising curiosity amongst celebrities and artists in using the solana blockchain solely validates Magic Eden’s wager on the community, and each Zhang and Zhou are assured that solana’s recognition will proceed to develop from right here.

“Ethereum is the ecosystem that basically took off final 12 months,” Zhang mentioned. However whereas ethereum might have dominated the NFT market final 12 months, Zhang is targeted on the longer term, not the previous. 

Zhang succinctly summarized his perspective: “Do not simply have a look at the place the puck is immediately, have a look at the place the puck goes.” For Magic Eden, the puck is heading in solana’s route.

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