Investing in NFTs without owning one

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NFTs named Collins Dictionary’s word of the year, yet most don’t understand what they are, or how to get in on the action.

First off if you haven’t read our article on NFTs you can find that here. But if you understand NFTs and you want to get in on the buzz here’s how. You may be thinking a few different things right now. First, ‘all of the good NFTs are so expensive, how can I afford them?’ or Second ‘there’s so many NFT projects how do I know which ones will blow up?’.

Well, the opportunity we’ll be highlighting today is the more basic and seemingly obvious one, which is actually owning the blockchain networks that these NFTs are traded on. You have probably heard of Ethereum which is currently the most used network with smart contract functionality. However, there are a few other great networks that don’t get as much attention that you may also want to be aware of, and as we know the underlining technology for NFTs is smart contracts so here’s a brief breakdown of the top layer1 smart contract networks based on market cap.

Note: It’s important when analyzing the pros and cons of a blockchain to keep in mind the developer’s perspective considering the developers and creators are ultimately the ones choosing where they want to build and launch their DApps and/or NFTs.

*Data as of 31st Jan

  • Ethereum
  • Numbers
  •  $150Bil TVL (Total Value Locked)
  •  $14.78 Avg transaction fee
    • Pros
      • Standardization
      • Security
    • Cons
      • High Transaction Fees
      • Low relative Transaction Capacity
      •  Lower relative Transaction Speeds
  • Binance
    • Numbers
      • $65B market cap
      •  4.8m daily transaction volume
      • $16B TVL
      • $0.31 Avg transaction fee
    • Pros
      • Fast adoption rate (Binance being a platform with many users means their relatively new smart chain with smart contracts will gain usage fast).
      • Funding (Binance is a large company meaning they have capital).
  • Cons
    • Centralization
    • Complex process to becoming a Node operator  
    • Cardano
  • Numbers
  • $34b market cap
  • 150k daily transaction volume
  •  $82m TVL
  • $0.35 Avg transaction fee
      • Pros
        • Very efficient mining process due to its two-layer core architecture.
        • Intensive research and peer review process before implementing new features and updates
      • Cons
        • lack of popularity and unique differentiating factors to compete with other networks.
        • Slow progress in their developmental process, although intensive research is good, it can also hinder the speed of implementation and keeping up with the market.
    • Solana
  • Numbers
  • $34b market cap
  • 150k daily transaction volume
  • $9b TVL
  • $0.00025 Avg transaction fee
      • Pros
        • Extremely low fees
        • Extremely high transaction processing rate with claims of capabilities higher than that of visa.
      • Cons
        • Lack of decentralization
        • Recent issues with instability and security breaches.
        • Higher inflation rate relative to other networks
    • Polkadot
  • Numbers
  • $21b market cap
  • 140k Daily transaction volume
  • $1.4m TVL
  • $0.00 Avg transaction fee
    • Pros
      • Multichain interoperability (meaning it’s built to allow it to function with other blockchains, such as Ethereum, bitcoin, Binance…acting as a network that connects all other networks together)
      •  Zero transaction fees
      • Immense features and growth potential
      • Very Unique network with little competition
    • Cons 
      • Passed issues with security vulnerabilities being exploited, causing millions of dollars in damages.
      • passed technical issues and lack of development.