Just as quickly as they launched into the spotlight, it might appear as though the wind in NFTs sails has dissipated. Amid a sharp decline in the announcements of record-breaking auction results and high-profile sales, it seems hard to deny that the initial hype is fading fast. Yet, jumping to this conclusion ignores the fact that artists and other creatives are still swarming platforms.
Sure, the absence of publicity might be taken as a sign that the speculation craze is over, but NFT demand hasn’t necessarily stalled. It has simply migrated to more environmentally-friendly platforms, all without the fanfare. (See Bitcoin Stock Comparison on TipRanks)
Seeking A More Sustainable Route
The outsized environmental footprint of proof-of-work blockchains has been castigated time and time again. Even NFT artists and creators have grown more vocal in lamenting its tremendous impact.
Elon Musk, the CEO of Tesla (TSLA) (or “Techno-King of Tesla,” as Musk prefers) thrust the energy consumption conversation back into the spotlight with his announcement that Tesla had suspended the acceptance of Bitcoin. Although it is difficult to call his comments a source of causation, NFT stakeholders have in many ways embraced less energy-intensive platforms. A look at the numbers show that stakeholders are simply shifting to other venues.
Data compiled by NFT research group NonFungible.com indicates that both the number of sales and amount of active wallets for corresponding NFT platforms operating on the Ethereum blockchain have tumbled in recent weeks.
Ethereum-based platforms have attempted to remedy the environmental reality by highlighting their use of carbon offset credits during auctions. Some, like Ethernity Chain, make social and environmental responsibility a part of their appeal. Still, that hasn’t been enough to turn the tides.
Take, for instance, Tezos-based NFT platform Hic Et Nunc. Just by the measure of daily active users, this platform has displaced OpenSea, Ethereum’s largest competing NFT platform. The platform has already minted over 100,000 NFTs since launch and boasted more than 7,000 artists as of mid-May.
Moreover, the fact that Tezos’ proof-of-stake blockchain consumes just a staggeringly tiny fraction of comparable proof-of-work blockchains is helping shift the conversation. Many environmental activist artists are recognizing this serious difference and migrating their work accordingly.
Simply Correlation, Not Necessarily Causation
Whether or not this shift is the function of Musk’s comments is difficult to qualify, but given the rise of other NFT platforms on competing blockchains, there might indeed be a relationship. If nothing else, it shows that the artists committed to reducing their environmental impact are making a change by voting with their feet. They have been joining the platforms that embrace and espouse their own principles.
The one facet that remains unchallenged is the fact that NFTs are experiencing an adoption boom, especially in terms of attracting creatives. These developments just might increasingly be hidden from the industry’s headlines as attention-grabbing auctions fade from the spotlight.
Disclosure: At the time of publication, Reuben Jackson did not have a position in any of the companies mentioned in this article.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell cryptocurrency.
