Ethereum is threatened by Solana to dethrone NFT

The Ethereum network’s dominance in the NFT market is under threat from Solana, according to a new report by JPMorgan Chase.

Analysts at the traditional investment bank note that Solana is gaining a growing share of the NFT market.

More and more users and developers are using this network to create new NFTs.

Ethereum is losing market share

According to a report, Ethereum accounted for about 95% of NFT-related creation and transaction volume in early 2021. Currently, the network holds 80% in this segment.

On the other hand, Solana is seeing strong growth in the number of participants. This is largely due to a more sustainable network that uses a single method to validate transactions.

It should be noted that the environmental impact caused by minting new tokens on PoW platforms like Ethereum is currently one of the most criticized issues that fans and the relevant community suffer from when it comes to mining NFTs . As a result, Solana becomes more attractive to big names looking for alternatives in this segment.

In addition, the Solana blockchain offers cheaper fees for users. Meanwhile, at the peak of traffic, Ethereum is charging more than $50 per transaction.

For JPMorgan, Ethereum’s loss of NFT market share is a cause for concern among network enthusiasts and investors as the segment has seen the strongest growth in crypto lately.

The bank also emphasized that the leading smart contract blockchain has lost its role in the decentralized finance sector. The main reason is probably that Ethereum is slow to develop compared to other competitors in terms of network scalability.

Solana blockchain NFT sales surpass $1 billion in less than a month

NFT sales on the Solana blockchain surpassed $1 billion in total volume in January 2022, according to data from CryptoSlam.

The first NFT Solana reached $1 million on September 11, 2021 for an NFT Degenerate Ape Academy featuring a collection of 10,000 algorithmically generated 3D primates. The most expensive NFT sold on Solana was $2.1 million last October.

According to data from The Block, on August 29, 2021, Solana’s weekly trading volume reached $160.39 million. However, the transaction volume for Solana-based NFTs is still quite small compared to NFT sales on the Ethereum blockchain, mainly due to the lack of high-profile NFT projects like Bored Ape Yacht Club and CryptoPunks.

Source: Cryptoslam

Earlier this year, however, there were some positive signals as new capital poured into the NFT Solana space, as NFT protocol Metaplex recently raised $46 million through a SAFT sale on Jan. 18.

Solana Performance outperforms Ethereum in 2021

Although 2021 ended with a gain of about 400%, ETH price is still far behind Solana’s native token SOL.

SOL was one of the best performers of the year in the crypto market, up over 20,000%. However, the token is now down almost 50% from its all-time high, while ETH is only 35% lower.

SOL/USDT | Source: Trade View

Additionally, according to data from CoinGecko, Solana still has a long way to go if it wants to outperform Ethereum in terms of market cap.

Ethereum is the second most valuable crypto project in the world with a capitalization of $373.7 billion. Solana is ranked 7th with a market value of just over $43 billion.

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