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Non-fungible tokens (NFTs) are one of the most well-known and popular asset types in the crypto industry.
From unique icons that anyone can purchase to VIP tickets to events and more, NFTs are becoming more widely used in various areas of life.
The most popular blockchains are Ethereum, Polygon and BNB Chain. Find out why this is so and which one you should choose.
Learn about popular NFT blockchains and important factors when choosing a blockchain for your NFT project.
NFTs have quickly become one of the most popular asset types in the cryptocurrency world. The uniqueness of each individual NFT sets them apart from fungible tokens such as BNB or Bitcoin (BTC). Common use cases for NFTs include items in metaverses, works of art, and collectibles. However, what all NFTs have in common is the fact that they are created and operate on a blockchain.
Ethereum is often considered as a universal blockchain for NFTs, although there are other blockchains that support this technology. Today, NFTs are offered by more and more blockchains, and connoisseurs of this type of asset have an expanding choice of options for issuing and trading.
In this article, we will talk about the most popular NFT-enabled blockchains and how they differ from each other.
What is blockchain
First, let's define what blockchain is. The Binance Academy article states the following: “Blockchain is a special type of database. You may also have heard the term "distributed ledger technology" (or DLT) - in many cases they mean the same thing. Blockchain has certain unique properties.
There are rules for adding data, and once the data is saved, it is almost impossible to change or delete it. Data is added over time into structures called blocks. Each block builds on top of the previous one and includes a piece of information related to the previous one.”
More information on this issue can be found in the article What is blockchain technology? Complete guide.
What to consider when choosing a blockchain for your NFT project
When choosing a blockchain for issuing tokens, there are many factors to consider, including the popularity of the network, costs to the creator, support for smart contracts, and security.
For example, you need to find out whether a given blockchain uses Proof-of-Work (PoW) or Proof-of-Stake (PoS) technology. PoW typically has lower speeds and higher transaction costs, which is why PoS is growing in popularity due to its greater speed and availability.
However, PoS networks also differ from each other in terms of validation and participation rules. To help you along the way, below we've outlined some of the most important factors to consider when choosing a blockchain for your NFT project.
Transaction speed
The speed of processing and confirming transactions varies among different blockchains. Speed plays a role for users who want to purchase or release their NFTs as quickly as possible. Collections often sell out almost instantly.
For example, a blockchain that is only capable of processing 50 or 60 transactions per second (TPS) could easily slow down a project's NFT issuance and transfer rate. Please be aware that delays may increase during busy hours.
Transaction costs
Transaction costs are one of the most important factors users and projects consider when choosing the best blockchain for their needs. Users pay a fee when submitting their transactions for confirmation, and the amount of these fees is often affected by network traffic. For example, if the blockchain is busy, users sometimes have to charge higher fees, competing with each other to make their transactions go faster.
Some networks have seen fees as high as 50% of the transaction amount. In such situations, the user may lose the desire to buy or issue NFTs.
Safety
Security is an absolute priority in the world of cryptocurrencies. Thanks to the technology underlying the blockchain, many networks are highly reliable, resilient and secure. However, this does not exclude the possibility of hacking.
As a result of blockchain hacks, investors, traders and NFT creators are losing their money and data, and development teams are facing phishing attacks. A good example is the $600 million Ronin protocol hack.
Common standard for smart contracts
EVM (Ethereum Virtual Machine) compatible blockchains use a common language to create smart contracts. If you already have the Solidity language you're familiar with from Ethereum or BNB Chain, you may find it easier to choose a different EVM-compatible network. Many users are more familiar with such networks and often already have compatible wallets.
Consensus mechanism
The blockchain consensus mechanism is a key element of confirmation and validation. Most often, public blockchains use a Proof-of-Work (PoW) or Proof-of-Stake (PoS) mechanism. You will need to select a network with a consensus mechanism that you consider optimal for your situation.
Popular Blockchains Used by NFT Developers
We've looked at some of the factors to consider when choosing a blockchain for your NFT project, and it's time to figure out which blockchain is best for you.
The Binance NFT platform today provides cross-chain compatibility for the Ethereum, Polygon and BSC blockchains. The Polygon integration highlights Binance NFT's status as an open, cross-blockchain marketplace where users can find and trade an even wider range of NFTs across multiple networks.
Here are some of the main differences between the blockchains supported by the Binance NFT platform today.
BNB Chain (BSC и BNB Beacon Chain)
BNB Chain is a blockchain ecosystem that developers and innovators can use to build Web3 decentralized applications (DApps). The BNB Chain team strives to ensure affordable fees and high transaction speeds through the Proof of Staked Authority (PoSA) consensus mechanism, which is a combination of PoS and Proof-of-Authority (PoA).
BNB Chain consists of two blockchains: BNB Beacon Chain is used for governance through staking and voting, and BNB Smart Chain (BSC) is an EVM-compatible network. Compared to its competitors, BSC has shorter block times and lower transaction costs, thanks to which the network attracts thousands of users and projects.
Ethereum
The Ethereum platform, the largest and most famous blockchain after Bitcoin, was the first in the industry to implement the concept of NFTs back in 2014. In 2017, as the NFT ecosystem began to mature and NFTs began to evolve into a smart contract-based tool, the Ethereum team launched the ERC-1155 multi-token standard to support large-scale adoption of NFTs.
Older token standards such as ERC-20 and ERC-721 required a separate smart contract to be created for each type of token. At the same time, the ERC-1155-based smart contract interface allows you to simultaneously transfer tokens of different types, which allows you to save on transaction costs.
It should be noted that the popularity of Ethereum leads to higher transaction costs for issuing and trading NFTs. As a result, other blockchains have been launched as alternative NFT ecosystems.
After the Merge, Ethereum uses the PoS consensus mechanism, which reduces energy consumption compared to the previous PoW algorithm.
Polygon
Polygon is an EVM-compliant blockchain that allows secure and instant transactions with EVM-compliant coins such as Ether (ETH). The Polygon network was created as a blockchain parallel to Ethereum and is one of the first solutions for scaling Ethereum.
Polygon works together with the Ethereum blockchain on a PoS architecture. As a layer 2 solution, this network shares many of the characteristics of the Ethereum protocol, such as high security, smart contract support, and EVM compatibility. Polygon offers greater flexibility and scalability than Ethereum, and is often chosen for its affordability and increased speed.
NFT marketplace Binance is also pleased to announce the addition of the Polygon network to its supported blockchains. To switch between networks on the Binance NFT marketplace, click the filters button and select the appropriate network as shown on this page:
Zero trading fees on Binance NFT marketplace for Ethereum and Polygon-based collections
To celebrate the launch of Polygon on the Binance NFT marketplace, the exchange is launching a promotion offering zero trading fees to our NFT community! The promotion period is from 03/21/2023 14:00 (Moscow time) to 04/11/2023 02:59 (Moscow time).
Users will be able to trade tokens from all Ethereum and Polygon NFT collections available on the Binance NFT marketplace with zero fees.
During this period, users will also receive 100 percent gas rebates in the form of USDT vouchers. This condition only applies to the purchase of the first three third-party platform NFTs from any Ethereum-based NFT collection available on the Binance NFT marketplace! To find out which Polygon NFT contract addresses are supported on Binance, check out these FAQs.
Please note that fees for NFTs on third-party platforms differ from fees for NFTs directly listed on the Binance NFT marketplace. More information can be found in our announcement.
Choosing the optimal blockchain for an NFT project
Now that you are familiar with the basics of NFT blockchains, it will be easier for you to make an informed decision about which network to choose. Of course, you shouldn't do this in a hurry, so be sure to thoroughly research the blockchain you're going to use.
Additional Information
(Blog) Using NFTs in the DeFi World for the Benefit of Participants
(Blog) Creating NFTs with the Binance NFT Platform is Easier Than You Think
(Blog) How NFT is changing the concept of participation in various communities
