JJust as they stepped into the limelight, it might seem as if the wind in NFT’s sails had evaporated. With a sharp drop in announcements of record-breaking auction results and high-profile sales, it seems hard to deny that the initial hype is quickly fading. But coming to that conclusion ignores the fact that platforms are still teeming with artists and other creatives.
Sure, the lack of publicity could be taken as a sign that the speculative frenzy is over, but NFT demand hasn’t necessarily stalled. It’s simply migrated to greener platforms, all without fanfare. (See Bitcoin Stock Comparison on TipRanks)
Looking for a more sustainable way
The outsized ecological footprint of proof-of-work blockchains has been repeatedly castigated. Even NFT artists and creators have been vocal about its massive impact.
Elon Musk, the CEO of Tesla (TSLA) (or “Techno-King of Tesla” as Musk prefers) put the energy consumption discussion back in the spotlight with his announcement that Tesla had suspended acceptance of Bitcoin. While it’s difficult to pin his comments as a source of causality, in many ways NFT stakeholders have embraced less power-intensive platforms. A look at the numbers shows that the players are simply moving to other places.
Data compiled by NFT research group NonFungible.com shows that both the number of sales and the number of active wallets for related NFT platforms running on the Ethereum blockchain have plummeted over the past few weeks.
Ethereum-based platforms have tried to fix environmental reality by highlighting their use of carbon credits during auctions. Some, like Ethernity Chain, make social and environmental responsibility part of their appeal. But that wasn’t enough to turn the tide.
Take the Tezos-based NFT platform Hic Et Nunc, for example. In terms of daily active users alone, this platform has supplanted OpenSea, Ethereum’s largest competing NFT platform. The platform has already minted over 100,000 NFTs since launch and had more than 7,000 artists as of mid-May.
Additionally, the fact that Tezos’ proof-of-stake blockchain consumes an astonishingly small fraction of comparable proof-of-work blockchains is helping to change the conversation. Many environmental activist artists recognize this stark difference and migrate their work accordingly.
Simply correlation, not necessarily causation
Whether or not this shift is the function of Musk’s comments is hard to qualify, but given the rise of other NFT platforms on competing blockchains, there may actually be a relationship. Last but not least, it shows that artists committed to reducing their environmental impact are making a difference by voting with their feet. They have joined the platforms that embrace and represent their own principles.
The one facet that remains undisputed is the fact that NFTs are experiencing an adoption boom, particularly in terms of attracting creatives. These developments may only gradually disappear from industry headlines as high-profile auctions fade from the limelight.
Disclosure: At the time of publication, Reuben Jackson held no position at any of the companies mentioned in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be construed as a solicitation to buy or sell cryptocurrency.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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