The NFTs sector is projected to be a billion-dollar ecosystem.
$69 million for a Beeple collection? That’s right. It’s only getting started.
As this expands, Ethereum will get strained and Gas will inevitably rise.
Gas is presently prohibitive. A single transfer costs around $20. And this means it would offset one at least $20 to move $5 in Ethereum. It’s pretty painful!
Exploding Gas fees is due to the rising popularity of a fundamentally limited Ethereum.
It’s not conclusive—and not a reliable metric to measure the adoption rate of Ethereum—but the number of ETH wallets has increased several folds over the years.
More network users translate to richer Ethereum miners harvesting revenue from transaction fees and block rewards.
It’s the inverse for users who now keep away from the network, opting for alternatives—Layer-2—or migrating to other high throughput networks.
Back to NFTs, collections and art pieces worth over $400 million have so far been sold. Like DeFi, NFT is rapidly expanding considering its value proposition that goes beyond art pieces.
NFTs are unique and non-interchangeable, with each possessing attributes for differentiation, opening up more possibilities.
As NFT takes off, different platforms are developing infrastructure primarily aimed at keeping Gas fees lower.
It makes sense.
Presently, there are marketplaces where users can mint NFTs for free. Of course, there are question marks. There is nothing free in Ethereum.
Every on-chain confirmation, at spot rates, means expending over $50—NFTs are smart contract transactions involving the processing of computational resources and storage requirements, incurring more fees. The more complex, the more Gas needed.
Therefore, these marketplaces don’t actually deploy the NFTs on-chain but allow pieces to have more eyeballs. Once purchased, the NFTs will be minted on-chain and payment made to the artist. This is massive, especially for beginners who are skilled but are put off by high Gas fees.
There is another way of ensuring that the NFT issuer benefits while all data points of the NFT are stored on-chain.
Immutable X is the first Layer-2 for NFTs in Ethereum.
From this portal, minters enjoy near-free minting (Gas fees are negligibly low), confirmation is instant, non-custodial, and carbon neutral.
Together with Gods Unchained, Immutable X had, by May 13, enabled more than 4X NFT trades than on the base layer since the launch of its marketplace on April 8.
Gods Unchained is where NFT fans can trade cards. Through Immutable X, players can purchase just what they need from other players to complete their Dream deck.
To understand how this happens, we must first understand how immutable X does it.
Well, immutable X uses perhaps what you already know, ZK Rollups. This way, it becomes easy to aggregate off-chain transactions inside one smart contract, reducing Gas fees to extremely low levels while concurrently helping scale Ethereum.
Within the first 24 hours of launch, it saved Gods Unchained players over $414k in Gas fees alone. This was based on the 10,362 trades going through Immutable X gas-free at $40.
Analyzing this at a deeper level, Immutable X is already helping relieve the base layer and saving every Ethereum network user in Gas fees.
Ethereum, after all, desperately needs a practical solution for lower Gas.
According to Crypto Fees, Ethereum users paid $29.3 million as transaction fees on the last day and roughly $60.6 million over the last week. This is over 9X the amount of fees billed in Bitcoin and over 6X in Uniswap.
Immutable X is leading the way in taking NFTs to Layer-2 using Rollups. The same effort is underway in DeFi, where Optimism and ZK Rollups are being adopted by projects to reduce Gas fees and make Ethereum more palatable.
Indeed, that users are enduring the high Gas fees hints at their confidence in Ethereum’s long-term survival.
After all, it makes sense; the presence of high throughput, low fee alternatives isn’t dissuading minters from dumping the network, provided that Ethereum remains king in both NFTs and DeFi.
The main value proposition here is that the success of NFTs is directly tied to the success and adoption of Ethereum.
So far, the Ethereum brand trounces those of competing platforms, allowing value to permeate through Ethereum’s ecosystem.
Will Immutable X inspire more shift to Layer-2 options in NFT?
WAX is the way to go friends, don't pay another gas fee.
The Beeple sale is actually one of the main reasons I started considering NFTs at all.