If you’re having a hard time deciding between choosing Solana or Ethereum to mint your non-fungible tokens (NFTs), you’ve come to the right place. In this guide, we will explore the overall strengths, capabilities, weaknesses, and differences of each blockchain so you can make a better decision that suits your goals in the NFT market.
Ethereum: ecosystem, market and security
There is no doubt that Ethereum is the largest ecosystem in the DeFi (decentralized finance) sector, with thousands of projects of all kinds based on it, so it is no surprise that the vast majority of NFTs run on it, such as ERC-721 tokens.
To be exact, roughly 95% of the entire NFT ecosystem uses Ethereum, so it’s no coincidence that when investors look for an NFT marketthe first one they usually go to is OpenSea, Rarible, Nifty Gateway and more.
When it comes to size, Ethereum takes the lead with a much larger pool of buyers and sellers, or in other words, trading volume. So if you mint NFTs on an Ethereum-based marketplace like OpenSea, you could get more exposure and people willing to buy or bid on your NFTs. On the other hand, everyone knows that there are also a lot of NFTs that no one would like to buy or bid on.
Want to mint your first NFT at OpenSea? Check out our step-by-step guide here.
The attributes of Ethereum place it as one of the main ecosystems to start a DeFi project. Its data architecture and security components are why so many developers are building on top of its blockchain.
However, when network activity increases exponentially (which is a common occurrence), the network suffers from a large transaction delay, leading to a huge increase in transaction fees that are typically in the single digits per transaction, something that could be affecting the number of users who can afford to mint NFTs.
This has led NFT creators and collectors to search for alternative blockchains with higher performance, scalability, and lower gas fees. One option that has become a very serious competitor is Solarium —a high-performance blockchain that leverages different cryptographic mechanisms to scale its network (more on this later).
While paying high gas fees can be an overwhelming experience at times, the upside is that there is more money flowing into Ethereum, so the investment ceiling is much higher. Data CryptoSlam shows that Ethereum has had a whopping $1.8 billion trade volume in the last 30 days, compared to $120 million for Solana-based markets.
Based on the current data from CryptoSlam, we can see that the most popular NFT collections on the market exist on the Ethereum blockchain. These include cryptopunksthe Bored Monkeys Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), etc.
Additional data shows that the average selling price of NFTs on Ethereum (as of Q4 2021) was around $3,000 compared to $1,000 for Solana.
Solana: Performance, Low Rates, Growing Ecosystem
In terms of technology, functionality and versatility, Solana takes the lead here.
Solana is a high-performance blockchain that uses a consensus mechanism called Proof-of-History, which leverages a suite of protocols to execute transactions with high throughput: over 60,000 transactions per second (TPS).
At Solana, transaction costs are typically less than a dollar. Many NFT projects and collectors are migrating to Solana to benefit from the scalability and cheap transaction fees. They have more freedom to build their projects without technical limitations, which is why Solana is becoming a hub for general NFTs.
Minting NFTs with a Solana-based marketplace like Solsea is remarkably cheap, quick, and easy to take advantage of once it hits the secondary market. Solana mints usually sell out quickly, and royalties on Solana-based markets are also often higher compared to Ethereum-based ones.
While the Solana ecosystem isn’t as big as Ethereum’s, that doesn’t mean it’s not growing. In fact, Solana’s user base has been growing at a much faster rate since early 2022, and even analysts at investment bank JP Morgan have reclaimed which could outperform Ethereum in the long run.
The NFT market in Solana has gained a lot of momentum during the third quarter of 2022, according to data from CryptoSlam. At the end of January, the sales volume in the ecosystem crossed the billion dollar mark.
One of the most popular collections on the Solana blockchain is the Degenerate Ape Academy, a collection of 10,000 unique NFT Ape.
While they may resemble Ethereum’s Bored Apes, they do have their own set of unique features.
They can also be quite expensive: the highest sale for a Degen Ape was $1.1 million in September 2021. However, in mid-December, an NFT from the Solana Monkey Business collection sold for more than 13,000 SOL, or around of $2 million.
Growing ecosystems are often a great opportunity for early adopters to establish themselves at the top of the list when reaching a larger audience. However, one of its problems is that the risk is usually higher. Since the beginning of 2022, the Solana network has suffered multiple downtimesforcing users to liquidate their positions as they were unable to top up their collateral during the outages.
Another concern that has been addressed lately by developers is the increase in carpets in Solana. This is often the problem with emerging technologies, as scammers will try to spot and take advantage of any weak spots they can find. However, rug pulls and scams can happen on both sides of the story, so it’s not just about security issues, it’s about making sure you do your research before investing in an NFT or any DeFi project. .
Rugpulls are the most common type of scam in the DeFi ecosystem. If you want to know how to detect them, check out our latest guide on the matter.
Each blockchain has its pros and cons, so it all comes down to what you want to do with each one. If you are looking for a high-performance blockchain with scalability and low gas fees, then Solana might be a better fit for you.
- Greater performance and scalability.
- Growing ecosystem.
- Low and environmentally friendly gas rates.
- Minting NFTs is cheap and relatively straightforward.
- Less secure network.
- Less exposure with a smaller market.
- Downtimes are more frequent.
Now, if you want to get exposure to a larger market and benefit from the security aspects, then you might be better off with Ethereum.
- Access to a larger market.
- High network security.
- NFTs sell for a much higher price on average.
- Network congestion can cause transaction delays.
- Lower performance and scalability.
- Transaction fees can become unaffordable for a good percentage of users who want to mint NFTs.